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GSR 2015

45 02 RENEWABLES 2015 GLOBAL STATUS REPORT i - Biomethane has the same specifications and characteristics as natural gas and can be used in natural gas fleets (either in CNG- or LNG-compatible vehicles). Brazil’s blending mandate, which was raised from B5 to B7 in 2014, helped drive production increases, and output rose 17% to 3.4 billion litres.82 As with ethanol, most biodiesel produced in Brazil is consumed domestically.83 To the south, Argentina’s output increased by about 28% in response to national incentives and to a 10% blend mandate.84 Biodiesel production in Asia was up substantially in 2014. Indonesia led the region, with production up 41% to 3.1 billion litres.85 Malaysia’s production also increased significantly (141%), although from comparatively low levels.86 In India, biodiesel production declined slightly, despite the deregulation of diesel prices, allowances for producers to sell directly to end consumers, and initiatives for blending biodiesel in Indian railways.87 China’s biodiesel production rose 5% to 1.13 billion litres. This increase was due largely to a crackdown on the illegal use of recycled cooking oil for human consumption, which freed substantial cooking oil feedstocks for biodiesel production. Nonetheless, capacity utilisation in China is only 28% due to a lack of large-scale collection of this feedstock.88 By the end of 2014, China had more than 50 biodiesel production plants with a capacity of over 3.5 million tonnes (roughly 4 billion litres), and many more facilities were under construction.89 In Australia, biodiesel FAME production went the same direction as ethanol. Only about 30% of the country’s production capacity was in operation, with a total of 50 million litres produced during the year. However, HVO production in Australia was up 33% to 20 million litres.90 Globally, HVO production increased 23% in 2014, to 4 billion litres.91 Most HVO production is in the Netherlands, the United States, and Singapore.92 The use of biomethanei as a transport fuel is increasing as well. The largest markets are in Europe, where roughly 10% of the biomethane produced is used in the transport sector.93 Market growth has been steady and, by 2014, was expected to exceed 1 TWh in Sweden, 0.55 TWh in Germany, and nearly 0.02 TWh in Finland (up almost 15%).94 Italy supports a strong infrastructure for natural gas-based vehicles (roughly 31% of all natural gas refuelling stations in Europe are in Italy), and most Swedish cities fuel their commuter bus fleets with locally produced biogas.95 Important infrastructure changes to advance the use of bio- methane are occurring in other regions as well. South Korea, for example, supports six biomethane fuelling stations, and 600 buses in the country run on biomethane.96 ■■ BIOENERGY INDUSTRY The bioenergy industry includes feedstock suppliers and processors; firms that deliver biomass to end-users; manu- facturers and distributors of specialist biomass harvesting, handling, and storage equipment; and manufacturers of appliances and hardware components designed to convert biomass to useful energy carriers and energy services. Some parts of the supply chain use technologies that are not exclusive to biomass (such as forage crop and tree harvesters, trucks, and steam boilers). Biomass industries were affected by a number of factors in 2014, including volumes of agricultural harvest (which affected feedstock costs), trade measures, and public concerns related to sustainability, especially in Europe. The most important factors were crude oil prices and policies, which had mixed effects on the industry in 2014. For example, in some countries, biofuel blending mandates helped increase demand for biofuels, whereas in others, policy uncertainty (particularly in Australia and the United States) and discussions indicating a cap to be placed on the percentages of biofuel that could come from food crops in Europe had countering impacts.97 The low crude oil price in the second half of 2014 reduced costs associated with feedstock production and transport. However, it reduced turnover for some actors in the supply chain, with some businesses reporting 30% declines for the second half of the year, and resulted in project suspensions.98 Industry initiatives to address sustainability concerns continued to operate by sector (e.g., for solid biomass in the EU, for power and heat through the Sustainable Biomass Partnership); by feedstock (e.g., the Roundtable for Sustainable Palm Oil); and by fuel (e.g., the Renewable Fuels Association).99 Many bioenergy companies continued to participate voluntarily in sustainability certification schemes, using best management practices (as endorsed by the industry) for feedstock supply and processing, and absorbing associated costs into their operations. Bio-refining practices (producing co-products from biomass feedstocks, such as chemicals and animal feeds) also continued. In 2014, the United States counted some 213 biorefinery facilities that were producing a range of co-products with ethanol; another 100 were expanding or under construction.100 Biorefineries also exist in many other countries. For example, the Netherlands supports 5 commercial biorefineries and 12 demonstration and pilot facilities.101

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