New analysis from global growth consulting company, Frost & Sullivan (www.chemicals.frost.com), Strategic Analysis of the Asia Pacific Biodiesel Industry, reveals that total biodiesel consumption in the counties of the Asia Pacific region was 415,000 tonnes in 2006 and is expected to increase by 50 per cent CAGR to reach almost 8 million tonnes in 2013.

Whilst the initial focus of the industry was on export opportunities, especially to the EU, domestic demand is emerging as an important driver for the industry in the Asia Pacific region. Many governments in the region have set formal targets for biofuels usage, imposed mandates on oil companies to blend biofuels, given taxation benefits to biofuels, or introduced other measures to stimulate the industry.

Said Mark Dougan, managing director at Frost & Sullivan Australia, “governments throughout the Asia Pacific region have made significant progress in introducing legislative or fiscal measures to support the industry and boost demand.

“These measures are creating an increasingly viable domestic market within the region.”

Whilst the high feedstock costs that have been a feature since late 2006 have damaged the commercial viability of biodiesel production, the long-term fundamentals remain unchanged. Hence the industry will continue to grow in the region.

The rapid increase in the costs of feedstocks, and particularly of palm oil, since Q3 2006 have provided a major challenge to the commercial viability of the industry, as this has not been accompanied by an increase in biodiesel selling prices. Consequently alternative feedstocks such as waste cooking oil and jatropha are being actively explored by producers in the region.

“Alternative feedstocks which are available at a lower cost than the main vegetable oils will enable the biodiesel sector to regain commercial viability”, adds Mr. Dougan. “However the potential volumes of these feedstocks that is likely to be available remains unclear at this stage.”

Asia Pacific biodiesel producers need to address the likelihood of continued pressure on feedstock costs and ensure that they can produce as cost-effectively as possible, whilst exploring alternative lower-cost feedstock supplies.

Strategic Analysis of the Asia Pacific Biodiesel Industry is part of the Chemicals & Materials Growth Partnership Service, which includes research services in the following: European Biofuels Market, European Glycerin Market and the US Biodiesel Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the Asia Pacific Biodiesel industry then send an e-mail to Sharmin Jassal, Corporate Communications, at sharmin.jassal@frost.com with your full name, company name, title, telephone number, fax number, and e-mail address. We will send you the information through e-mail upon receipt of the above information.

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