Biodiesel: revving up the energy transition
Biodiesel is emerging as a crucial player in the quest for eco-friendly, yet effective transportation alternatives, particularly in Europe. Derived from renewable resources such as vegetable oils, animal fats and used cooking oils, biodiesel represents a cleaner and more environmentally friendly option compared to conventional diesel fuel. The need for biodiesel arises from a combination of environmental, economic and energy security concerns. As a renewable energy source, biodiesel offers an opportunity to diversify fuel options, moving away from dependence on finite fossil fuel reserves. This diversification aligns with global efforts to transition towards more sustainable and resilient energy systems. Moreover, biodiesel addresses the challenge of harmful emissions associated with traditional diesel, contributing to improved air quality by drastically reducing the greenhouse gas emissions.
The biodiesel’s production process involves transesterification, a chemical reaction in which triglycerides (fats and oils) are reacted with an alcohol (usually methanol or ethanol) in the presence of a catalyst, resulting in the production of biodiesel and glycerol as a by-product. Common feedstocks for biodiesel production include soybean oil, canola oil, rapeseed oil, all types of used cooking oils and residual fats.
One of the key advantages of biodiesel lies in its potential to significantly reduce harmful emissions throughout the world. Traditional diesel fuel is a major contributor to greenhouse gas emissions, particularly carbon dioxide (CO2), which contributes to global warming. Biodiesel, being derived from renewable feedstocks, is considered carbon-neutral over its lifecycle. In addition to lower CO2 emissions, biodiesel also addresses other harmful pollutants associated with diesel combustion. Sulphur emissions, known to contribute to air pollution and acid rain, are significantly reduced when biodiesel is used. Biodiesel contains minimal sulphur, resulting in cleaner emissions and a positive impact on both air quality and environmental health. Furthermore, particulate matter (PM) emissions, consisting of tiny particles and droplets that can be harmful when inhaled, are also lower with biodiesel combustion. While the impact on nitrogen oxide emissions can vary depending on engine technology and operating conditions, biodiesel contributes significantly to lower NOx levels, further enhancing its environmental benefits.
The demand for biodiesel in Europe has seen an upswing, driven by a combination of regulatory measures, environmental consciousness and a commitment to reducing the carbon footprint of the transportation sector. The European Union (EU), through initiatives like the Renewable Energy Directive (RED), has set targets for the use of renewable energy in the transport sectors (automobile, marine and aviation). With the latest revision in 2023 of the REDIII, the share of renewable energy within the final consumption of energy in the transport sector must be of at least 29 %, of which 3.5% must be second-generation biofuels, or to a greenhouse gas intensity reduction of at least 14.5% by 2030. Biodiesel, being a renewable and sustainable fuel, plays a crucial role in helping EU member states achieve these targets. At the same time, the waste-based and advanced biodiesel production rose by nearly 12% in 2022 compared to a year earlier.
Biodiesel represents a promising solution for cleaner and more sustainable transportation in Europe. The marine sector is using greater quantities of the product in an effort to offset their environmental footprint. The aviation sector is also gradually increasing the usage and Germany has recently decided to include an even greater mix of biodiesel in the fuels sold as gas stations, outperforming the EU regulations. As the demand for biodiesel continues to grow, ongoing research and advancements in production technologies will play a crucial role in maximising its benefits and ensuring its long-term viability as a clean energy alternative in Europe and beyond. In fact, this fairly young industry has led to new industrial opportunities in Europe.
The SEE champion
Astra Bioplant (a subsidiary of Astra Finance AD and part of the Bulmarket Group) established in 2007 in Slivo Pole, in the municipality of Ruse, Bulgaria, stands as one of the premier biodiesel producers in Europe. With its three biodiesel plants in Ruse, Slivo Pole and Provadia, and a member of the European Waste-based and Advanced Biofuels Association (EWABA), Astra leads the charge in sustainable fuel production in the region.
The company is actively engaged in the production of both first and second-generation biodiesel fuels, showcasing its commitment to comprehensive sustainability solutions. The production of second-generation biodiesel fuel is derived primarily from used cooking oils and residual fats. This innovative approach slashes carbon emissions by up to 90%, aligning with the company's commitment to environmental stewardship. In addition to its pioneering work in second-generation biodiesel, the company plays a significant role in the production of first-generation biodiesel. Traditionally Astra Bioplant secures half of its 450,000 tons of oil seed crops from within Bulgaria making them the largest buyer of rapeseed in the country. This dual focus underscores the company's versatility and dedication to addressing diverse energy needs through alternative environmental fuels. A key strategic objective for Astra Bioplant is to elevate second-generation biodiesel to constitute 65% of its total production within four years. Moreover, the company diversifies its offerings by producing refined and unrefined oils, free fatty acid products, meal and glycerine.
Astra Bioplant has cemented its position as one of Europe's foremost biodiesel traders, consistently ranking among the continent's top five. With an impressive annual output exceeding 360,000 tonnes and trading operations surpassing 1,400,000 tonnes, the company plays a pivotal role in shaping the biofuels landscape. Moreover, Astra Bioplant stands as the largest producers of pharmaceutical glycerine in Southeast Europe, boasting a capacity of 20,000 tonnes per year, further solidifying its stature as a leader in the sector.
Operating across Europe with warehouses in multiple strategic locations on the continent the company has expanded its footprint in response to evolving market dynamics. In 2023 the company acquired the storage facility of the German based “Oiltanking” in Bulgaria thus expanding its storage capacity to above 100 000 cubic metres. Furthermore, amidst the conflict in Ukraine, the company emerged as a key importer for the region, leveraging its strategic terminal in Romania to facilitate exports to Ukraine. Astra Bioplant sources waste fats predominantly from Asian markets, particularly Malaysia, Vietnam, China and Thailand. Recognising the insatiable demand for raw materials in the biofuel sector, the company supplements its supply chain with significant imports of sunflower and rapeseed from Ukraine, Moldova and even as far as Australia.
In a bid to bolster its operations, Astra Bioplant ventured into the Chinese market, establishing a subsidiary dedicated to procuring waste raw materials. This forward-looking move has already resulted in more efficient sourcing and quicker operations. Additionally, in 2021, the company invested approximately EUR 17 mln into expanding its second-generation biodiesel production capacities by an additional 100,000 tonnes.
With an eye towards the future, Astra Bioplant aims to not only expand its market presence but also diversify its product portfolio. The company is in the process of implementing a new biofuel product made from cashew husks, something innovative for the company and the market overall. This strategic trajectory underscores the company's commitment to sustained growth and innovation.
Leveraging the robust infrastructure of its partner company Bulmarket, Astra Bioplant relies on railway transport as its primary logistics solution. Benefiting from the expansive network of Bulmarket Rail Cargo (Bulgaria), United Railways and Vest Trans Rail (Romania) as well as Global Neo Logistics (Serbia) the company ensures efficient distribution across regional and international markets. The strategic location of facilities on the bank of the Danube River in Ruse and the development of the infrastructure (port, railway, storage facilities, gas and material pipelines) allow the company to operate efficiently and quickly.
Reflecting its prominence in the industry, Astra Bioplant alone ranked as the second largest Bulgarian company in 2022, boasting a formidable operating revenue of EUR 3.9 bln. This financial milestone underscores the company's resilience and market leadership in the biodiesel sector and demonstrates the opportunities the region provides for new innovative and eco-friendly industrial development on a European level.