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With the Covid-19 pandemic and the drop in the value of oil, biofuels had a negative impact on demand
Due to the pandemic and the sharp drop in oil prices in recent months, demand for biofuels has fallen for the first time in 20 years. Expert points out that biofuels are currently not competitive in the market because of oil prices. Among all renewable energy sources, the use of biofuels has seen the biggest decline during the pandemic.
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Olivier Lemeslei, director of research at consultancy Xerfi, says that “The drop in oil prices had a very negative impact on biofuels”.
According to data from the International Energy Agency (IEA), biofuel production will fall by 11,6% compared to 2019, a very expressive result, which is the first time in 20 years.
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The current situation of biofuels and fossil fuels is not the same: although the cost of biodiesel per barrel remains at around 70 dollars, the price of crude oil has plummeted since the beginning of the year due to severe global measures to contain the Covid pandemic. -19.
Alternatives to gasoline or diesel produced from vegetables have advantages, especially for the environment. Compared to fossil fuels, this means that greenhouse gas emissions are reduced by at least 50%.
Jean-Philippe Puig, CEO of the Avril group, says that “Biofuels have room, as part of the environmental solution”. However, in addition to price inequality in relation to oil, the sector also depends on political will, for example, in increasing the level of use of biofuels at gas stations.
