By Rachel Graham
Jan. 6 (Bloomberg) — Demand for biodiesel made from rapeseed is increasing as temperatures drop in Europe because it can be used at lower temperatures than other fuels.
Biodiesel’s premium to rapeseed oil widened for a second day to 79.70 euros ($114) a ton today, according to brokerage Starsupply Renewables SA. The premium rose to 91.69 euros on Dec. 31, a two-month high.
Biodiesel is added to transport fuel in Europe to reduce carbon emissions. The European Union has approved a law that 10 percent of energy for road and rail transport must come from renewable sources by 2020, potentially boosting biofuels.
“The cold properties of rapeseed make it the only feasible blend component in the winter months,” John Young, director of Sinocor, a trading company, said by phone today.
Biodiesel made from rapeseed has an average so-called cold filter plugging point of minus 13 degrees Celsius (8.6 Fahrenheit), according to Starsupply. This compares to minus 3 Celsius for fuel made from soybean oil and 12 degrees Celsius for palm oil based biodiesel. The CFPP is the lowest temperature at which a vehicle will operate using a specified fuel.
Temperatures were forecast to stay below freezing in most of northwest Europe today, according to the U.K.’s Met Office.
