Why Pay Attention to the Biodiesel Industry Chain?

Biodiesel, as a substitute for fossil diesel, has the same target market as petroleum as a power fuel and chemical material.

In the field of power fuels, it mainly involves 1) ester based biodiesel; 2) Hydrocarbon based biodiesel, also known as "renewable diesel", requires hydrogenation; 3) Bioaviation kerosene is a sustainable aviation fuel (SAF). Internationally, after 2019, with the continuous improvement of EU policies on carbon reduction, biodiesel has entered a long-term trajectory of both quantity and price. At present, the European Union is the main production and consumption region for biodiesel worldwide, and the production capacity in this region is constantly in short supply, requiring imports to supplement the supply and demand gap. The rapid increase in exports to the European Union has brought new opportunities to China's biodiesel industry. From 2016 to 2020, China's biodiesel export volume increased from 76 million liters (approximately 70000 tons) to 1.035 billion liters (approximately 90000 tons), accounting for 71.13% of the total production of 1.455 billion liters (approximately 1.27 million tons) in 2020. The main export destinations are concentrated in various EU countries, including the Netherlands, Spain, Belgium, Italy, and Malaysia, a transit country with the EU as its destination. China's biodiesel industry is expected to benefit from the EU's increasing demand for related fuels to achieve carbon reduction targets in the long term; Domestically, China proposed the goal of carbon neutrality in 2021. Since 2022, relevant policies have been continuously promulgated. We believe that as the value of the biodiesel industry chain in improving resource utilization efficiency continues to be recognized in the international market, biodiesel will also have a corresponding position in China's domestic market.