Global HVO production to quadruple by 2025: Greenea

Quantum Commodity Intelligence - The world will see an explosion in hydrotreated vegetable oil (HVO) projects to make road or aviation fuel over the next few years,  according to an analysis by Greenea Analysis.

The number of pure and co-processing projects will triple in the European Union, rise six-fold in the US, and three-fold in east Asia by 2025 compared to 2020, said the report.

Globally, HVO production will rise from just over 7 million mt last year to more than 29.5 million mt by 2025.

The US will become the single largest HVO producer, with annual production increasing from 1.9 million mt in 2020 to 12.6 million mt in 2025.

Capacity in the EU will also increase from 3.5 million mt last year to 11.3 million mt by 2025.

The EU Commission has proposed setting sustainable aviation targets for European Union-based airlines in 2025, starting with a 2% fuel burn using either synthetic fuels or biofuels that year.

One analyst told Quantum that it equates to around 24,000 bpd and said there would be sufficient volumes in the market.

The sustainable aviation target then rises to 5% in 2030, when the minimum share of synthetic fuels is set at 0.7%.

Meanwhile, growth for the Asian market is split between two regions in the Greenea analysis.

In south-east Asia, production will grow to 3.9 million mt by 2025 from 1.3 million mt in 2020, largely due to Neste's expansion in Singapore.

In east Asia, including China, Japan and South Korea, there will be smaller growth to 1.1 million mt in four years' time, up from 0.34 million mt last year.

Production in Latin America will rise from nothing last year to 770,000 mt by 2025, said Greenea.