Spain biodiesel plants running at 9 pct capacity

Fri Apr 24, 2009 11:09am EDT

* Producers say imports still a problem

* 2.3 million tonnes aditional capacity in 2009

* Bioethanol plants at 60 percent capacity

By Martin Roberts

MADRID, April 24 (Reuters) - Spain's biodiesel plants are running at just nine percent of capacity, producers say, although they hope recent duties imposed by the European Union on U.S. imports will help revive production.

"Nonetheless, imports -- also subsidised -- from countries like Argentina, Malaysia and Indonesia, could also become as damaging as from the U.S.," said a report by the biofuels division of renewable energy industry group APPA.

APPA estimates that 71 percent of the 586,000 tonnes of biodiesel sold in Spain in 2008 was imported, and called for the Spanish government to ensure legal requirements to blend motor fuel with plant-based fuel be met with EU-manufactured fuels.

"We are simply asking for measures to ensure the domestic biofuel industry's survival, just as France, Portugal and Italy have been doing," APPA added.

As of January 1 this year, Spain has had a mandatory target of 3.4 percent of automotive fuel used in 2009 to be derived from biofuel -- measured by energy content -- a level that will rise to 5.83 percent in 2010.

Biodiesel plants were producing 18 pct of capacity a year ago, since when capacity has grown quicker than production, the report said.

The EU has encouraged biofuels in order to cut greenhouse gas emissions by motor vehicles and reduce Europe's dependence on imported fossil fuels.

Biodiesel can be made from oilseeds and blended with mineral diesel, while bioethanol can come from cereals and be mixed with petrol.

APPA's latest tally shows that 36 biodiesel plants were operational by the end of 2008 with the capacity to produce about 2 million tonnes per year, but only half were working, and slowly.

Another 19 plants with a capacity of 2.3 million tonnes are due to come on stream this year, as investors have bet on demand being created by mandatory blending laws.

APPA has estimated that demand for biodiesel will be at most 1 million tonnes this year, and has also asked the government to mandate the sale of labelled fuels containing more than the legal minimum.

"In Spain we are really far behind many of our EU partners in making biofuels available in service stations," an APPA spokesman said.

Spain's four bioethanol plants were meanwhile running at 60 percent of their total capacity of 460,000 tonnes, APPA estimated.

Renewable energy firm Abengoa (ABG.MC) restarted Spain's biggest plant last August -- which it jointly owns with food firm Ebro Puleva EVA.MC with a view to meeting a forecast increase in demand due to mandatory blending.

Industry sources have said that the 158,000 tonne-per year Salamanca plant is currently producing for export only, but expects domestic demand to increase when the government raises fuel blending targets again next year.

For a factbox on Spanish biodiesel plants, please click on [ID:nLO125114] (Reporting by Martin Roberts; Editing by Keiron Henderson)

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