Viewpoint: HVO Capacity Growth to Test Feedstock Supply
by Lauren Moffitt (Argus Media) Decarbonisation pledges have increased during a landmark year for global climate diplomacy with the UN’s Cop 26 climate conference, with investment in biofuels positioned centre stage of many transition plans. Asia-Pacific in 2022 will see an intensifying scramble to buttress feedstock supply chains ahead of several hydrotreated vegetable oil (HVO) capacity additions the following year, although shifting regulations may constrict supplies.
Shell has announced plans for a 550,000 t/yr HVO and sustainable aviation fuel (SAF) plant as part of its rebranded Pulau Bukom site in Singapore.
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South Korean biodiesel producer Dansuk is seeking a partner to invest in a second 300,000 t/yr domestic HVO and SAF plant in Gusan, on top of a similar 300,000 t/yr Daesan project already under way for a 2025 start-up.
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ECO Environmental planned to add 100,000 t/yr of HVO and SAF capacity to its existing 250,000 t/yr plant in Jiangsu province in the fourth quarter of 2021. Beijing Sanju in 2022 expects to open its fourth HVO plant with 200,000 t/yr in Baoshun, Shandong province, while Zhongdiyou New Energy aims to increase its Shandong capacity up to its nameplate 400,000 t/yr.
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While many large-scale producers are eager to secure limited feedstock supply lines through acquiring upstream collection companies in China, no known acquisitions have emerged. Local government policies promoting “closed loop” systems might make this increasingly difficult.
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Expansion in Southeast Asian UCO sourcing will possibly continue after exports from Malaysia, Indonesia, Thailand and Vietnam all reached new highs in 2021.
But it might only be a matter of time before more insular policies emerge in some of these countries as well, especially Indonesia as it pursues ever more ambitious domestic biodiesel policies of its own. READ MORE
