Italy 2011 biodiesel output seen down 18 percent: industry

MILAN Fri Oct 7, 2011 1:38pm EDT

MILAN (Reuters) - Biodiesel output in Italy, a major producer in the European Union, is expected to fall some 18 percent to about 600,000 tonnes this year hit by surging inflows of cheaper imports, a senior industry official said on Friday.

Italian biodiesel makers, who use mostly imported raw materials including palm oil and rapeseed, have been hit hard in the past couple of years by cheap imports which sometimes cost less than the raw materials, industry experts have said.

"Production is expected at 600,000 tonnes in 2011," said Maria Rosaria Di Somma, director general of the industry body Assocostieri-Unione Produttori Biocarburanti.

Import of biodiesel to Italy is expected to cover 70 percent of this year's demand -- which is determined by Italy's obligatory targets for biofuels use in car fuel, Di Somma told Reuters.

Italy's obligatory share of biofuels in the car fuel mix, part of the EU fight against climate change, is set at 4.0 percent for 2011 and is due to rise to 4.5 percent in 2012 and to 5.0 percent by 2014. Biodiesel accounts for lion's share of biofuels use in Italy.

Biodiesel imports to Italy covered about 50 percent of the target-driven biofuels sales in 2010, up from 29 percent in 2008, according to Assocostieri estimates provided by organisers of a biofuels conference in Verona next week.

Italy produced 731,844 tonnes of biodiesel last year when it imported 639,684 tonnes of the fuel to meet a demand of about 1.3 million tonnes, Assocostieri data on its website shows (www.assocostieri.it).

(Reporting by Svetlana Kovalyova; editing by Keiron Henderson; editing by Keiron Henderson)