Tougher EU biodiesel regulations doom ENI-Pertamina tie-up
PME shipments (blue) to stagnate, UCOME cargos (orange) to rise on the Asia/EU trade lane
PT Pertamina has ended a partnership with ENI to build a biodiesel refinery in Indonesia using crude palm oil as feedstock. The agreement, signed early last year, did not work out as ENI required a sustainability certification for the palm oil used, as required by the European Union (EU) from 2020. (Reuters) Fatty acid methyl ester (FAME) shipments from Asia to Europe jumped 158% YoY to more than 1.4 million mt in 2018, after the EU scrapped anti-dumping duties on Indonesian supplies. But palm methyl ester (PME) shipments are likely to stagnate over the next few years due to the tougher EU regulations (see chart above). Hydrogenated vegetable oil (HVO) and used cooking oil methyl ester (UCOME) shipments are expected to rise as the EU turns to alternative sources of renewable diesel. For more information, please see our Biodiesel 5-Year Shipping Outlook entitled FAME & Fortune: Rising demand for biodiesel tonnage as Asia/Europe cargos continue to grow.