Market and Trade Data
Belgium and the
Netherlands Gearing Up for Biofuel Production June
By Bob Flach
also . . .
FAS Report NL6005
Until recently, production and consumption of biofuels
in Belgium and the Netherlands were not top government
priorities. In fact, only about 20,000 metric tons of
biodiesel was produced in the region in 2005; no ethanol
for use as fuel was produced. But as the Netherlands and
Belgium begin to follow the rules and standards set for
members by the European Commission, they are setting
ambitious country goals for the use of biofuels.
To meet the
new consumption standards, the Benelux region will be
producing and importing more finished biofuels and
feedstocks (products used in production of biofuels).
Tax Cuts Support Biofuels
2006, subsidies by the Benelux governments to promote
use of biodiesel and ethanol as transportation fuel were
negligible compared to other EU (European Union) states,
such as Germany and France. But the Belgian and Dutch
governments recently legislated subsidies and are
lifting the excise duty on ethanol, when it is
blended with gasoline at a minimum 7-percent volume, and
on biodiesel, when it is blended with diesel at a
minimum 2.45-percent volume.
What Are Biofuels?
biofuels make up most of commercial production.
is produced from vegetable oils and can be mixed
with or replace diesel fuel.
is produced from agricultural feedstocks (mostly
sugarcane, corn, and wheat) and starchy
agricultural industry byproducts. It usually
supplements rather than replace gasoline.
Principal biofuel producers include Brazil and the
United States. The EU, Brazil, and the United
States all have government biofuel mandates to
government is also reducing its excise duty on gasoline
and diesel if these fuels contain at least 2-percent
biofuel by volume. The Dutch government plans to make
the 2-percent blending compulsory by January 2007.
government support, production of renewable biofuels is
expected to increase dramatically by 2007. Based on
industry intentions to build plants, production capacity
will increase up to 450,000 metric tons of biodiesel and
375,000 tons of ethanol.
Due to a
shortage of arable land, the Netherlands will depend
largely on imports to fill production and consumption
goals for renewable energy sources. There will be
opportunities for U.S. exports of wood products, soybean
oil, other vegetable oils, and grains. To reduce
production costs, biofuel plants will be located at
seaports, such as Rotterdam and Eemshaven.
will offer fewer U.S. export opportunities as the
country will secure most grain and oilseed inputs from
other EU countries.
Production Due for Jump Start
Rapeseed is the input of choice for the 20,000 tons of
biodiesel now produced each year in Belgium and the
Netherlands. Two new plants opening in 2006 in the
Netherlands will up production capacity by about 100,000
tons, most of which will be sold in Germany. By 2007,
when three other companies begin production, Belgium
will have a 350,000-ton biodiesel capacity per year. As
production increases, palm oil and soybean oil are
expected to be increasingly used for manufacturing
Online in 2007
Though ethanol for use as fuel is not yet produced in
these countries, that will change in 2007. In Belgium,
two companies plan to start production, with initial
capacities of 165,000 tons; production is slated to
increase dramatically by 2010. Raw materials for these
plants will include wheat, and byproducts such as
molasses and potato waste. As favorable government
policies become effective, other plants will use
feedstocks as well.
Netherlands, the capacity for ethanol production is
expected to expand to at least 210,000 tons. The
profitability of domestic ethanol production hinges on
the as-yet-undetermined government policy for ethanol
imports, which could be in direct competition with
of Green Electricity?
In contrast to the limited use of biofuels as transport
fuel, their use in making electricity has increased
considerably. In 2005, about 1.4 million tons of palm
derivatives and about 2 million tons of wood materials
were used to generate electricity in Belgium and the
use of palm products in making electricity is
questionable, however. Domestic sunflower and rapeseed
oil producers are pressuring their governments to end
subsidies provided for producing electricity when palm
derivatives are used. Consequently, their use is
expected to decline in 2006, along with Dutch production
of renewable energy. This drop will make it difficult to
reach the government’s ambitious targets for renewable
energy production: 6 percent of output in 2005, 9
percent in 2020 and 17 percent in 2012.
Door for U.S. Products
To achieve their ambitious goals, Dutch biofuel
companies will need to import about 80 percent of the
feedstock to be used in production. Most will come from
outside the EU. Potential increased imports for this
production include fuel wood (pelletized sawdust),
soybean and other vegetable oils, wheat, and corn.
Due to the
increased use of domestic crops for biofuel production,
the Dutch processing sector also anticipates increased
third-country imports of grains, such as wheat and corn.
Rapeseed planting for biofuel production is expected to
expand in the EU, displacing wheat and corn crops.
Bob Flach is an
agricultural specialist with the FAS Office of
Agricultural Affairs at the U.S. Embassy in The Hague,