China's exports of "gutter oil" (UCOME and UCO) to the EU have shown a compound growth rate of 33 in the past few years4% trend, by the end of 2022, a total of about 268260,000 tons, accounting for 30% of the EU import market. However, there are two main reasons why the recent high-speed export trend may be unsustainable.
First, the EU's total energy consumption is shrinking, and the demand for biofuels is likely to decline due to competition from other clean energy sources. With the rapid development and application of clean energy technology, clean energy such as solar energy, wind energy, and tidal energy has become an important choice for EU countries to promote energy transition. In contrast, the market competitiveness of biofuels may be affected to some extent, which also leads to uncertainty about the demand for biofuels. Therefore, it is expected that the growth trend of China's UCOME and UCO exports to the EU may be difficult to maintain in the future, and the rapid growth trend may be affected to a certain extent.
Second, China adheres to the principle of "not competing with the people for food, not competing with the land for food", and does not advocate the direct use of corn, soybeans and other grains to make biofuels. As one of the most populous countries in the world, food security is of paramount importance to China. Due to the relative lack of arable land, China does not want to cause conflicts over food ** due to biofuel development. Therefore, China is more inclined to use non-food raw materials such as firewood, straw, and gutter oil to develop biofuels. This is different from some other countries with sufficient grain production, which use a large number of grains such as corn and soybeans as raw materials, and have greater development potential. This restriction of this principle has led to a competitive dilemma in China's biofuel export market, which may further make it difficult for China's biofuel and "gutter oil" exports to the EU to grow.
As a low-carbon, environmentally friendly and efficient renewable fuel, biofuels are favored by countries around the world under the pressure of energy security, environmental protection and climate change. According to Statista, a comprehensive global data repository, the global biofuels market was valued at approximately $116.4 billion in 2022 and is expected to at least double in the future. Many markets such as China, the United States, and Europe have introduced incentives to stimulate new momentum for the development of biofuels.
In China, the biofuels industry is also showing a good development trend. In 2020, China's biomass fuel power generation reached 132.6 billion kWh, a year-on-year increase of 194%。At the same time, China is also using non-food raw materials such as firewood, straw and gutter oil to promote the development of biofuels. According to the plan, by 2060, China's annual biomass fuel resources will exceed 1.5 billion tons of standard coal. It is foreseeable that the scale of China's biofuel industry will continue to expand, and the proportion of biofuels in China's total oil consumption will also increase year by year.
However, due to the above reasons, the growth of China's exports of "gutter oil" to the EU may be difficult to sustain. Even if China is able to capture a certain share of the European import market for biofuels and "gutter oil", by 2030, China's UCO and UCOME exports to the EU will be capped at around 2 million tons. In addition, other countries may seize China's biofuel export market, further affecting the growth of China's exports of biofuels and "gutter oil" to the EU.
From the above analysis, it can be seen that the growth trend of China's "gutter oil" exports to the EU may be difficult to sustain mainly due to the adjustment of the EU's energy structure and China's food security principle. With the promotion and competition of clean energy, as well as the cautious consideration of food**, the growth trend of China's exports of biofuels and "gutter oil" to the EU may be affected to a certain extent.
However, the prospects for the development of the biofuels industry are still promising. Countries around the world are increasing their support for biofuels, and the biofuels market is expected to continue to grow in the future. For China, the biofuels industry is important for achieving energy substitution, reducing dependence on imported energy, and promoting sustainable development. On the premise of protecting food security, China can further increase the development and utilization of non-food raw materials and promote the development of the biofuel industry.
To sum up, the reason why China's "gutter oil" exports to the EU may be difficult to maintain is mainly affected by the adjustment of the EU's energy structure and China's food security principles. However, the biofuels industry still has broad development prospects, and China can promote the development of the biofuels industry by increasing the use of non-food raw materials. For China, the development of the biofuel industry can not only promote the energy transition and ecological civilization construction, but also achieve the goal of sustainable development, and achieve a balance between multiple economic, environmental and social interests.