Polish transport fuel producers can decrease their biofuel-blending requirements by 15% if they buy supplies from approved producers, according to a government source, citing a blending provision effective January 1.
In order to take advantage of the provision, transport fuel suppliers have to demonstrate that at least 70% of the biofuels they blend each year come from "registered producers," both from Poland and other countries, said the source at Poland's Agency of Agricultural Market, or ARR, the agency's Polish-language acronym. The ARR is responsible for registering producers.
"In order to apply for registration, producers have to be set up in accordance with the Polish law or have a Polish branch," the source added.
There were 27 companies involved in the production, storage, preparation or marketing of biofuels in Poland as of December 19, including the country's biggest biodiesel producers Bioagra-Oil and Orlen's Rafineria Trzebinia, according to ARR's website. The biofuel-blending provision is part of a larger Polish biofuels law passed in May 2011 requiring that all companies involved in biofuels production, storage or marketing in the country be registered and provide regular information about the types and quantities of biofuels sold.
While it is not clear what percentage of biofuels Poland currently requires in its transportation fuels, draft legislation considered last year envisioned a 6.65% blend in 2012.
The Ministry of Economy, responsible for the general biofuels policy, was not available for clarification.
The possibility of reducing mandates for individual blenders will mean a lessened overall national blending mandate, sources said. "I heard that Poland has reduced its blending target this year to less than 6%," one market source said Wednesday. IMPLICATIONS FOR REGIONAL BIOFUELS MARKET
Some market participants said the biofuels-blending provision could potentially limit the companies that could register with the ARR, with several German biofuels producers saying it created an unfair advantage for Polish companies.
"We applied for the registration, but from what we heard in the telephone conversations, we are not expecting a positive reply," one German producer said Wednesday. The regulation itself, however, does not prioritize Polish product, said an Economy Ministry source.
"Any EU and EEA-based (European Economic Area) producer can apply to be put on this register," she said. "This is not a question of the origin of raw materials, but rather the question of accountability. These provisions will simply allow us to gather fuller and more accurate information about biofuels trading flows." Several marketsources, however, said they believed that even if the regulations were biased in favor of Polish companies, Poland would not be able to cover its requirements in biofuels domestically. "We heard that Orlen will try to benefit from these provisions, but that would mean that there will not be enough locally-produced volumes for Grupa Lotos and hence they will still continue to import biodiesel," one trader said.
Sources at neither PKN Orlen, nor Grupa Lotos, the biggest fuel suppliers in the country, were immediately available to comment.
However, earlier a source from Grupa Lotos confirmed the company did not take into account a possible reducing of its blending mandate when conducting tenders for biodiesel and ethanol last month.
According to the data published by Polish authorities in May, Poland's ethanol production capacity in 2011 was around 590,000 mt, while its consumption was forecast for the whole year at around 220,000 mt.
Biodiesel production capacity was estimated at 745,000 mt as opposed to 952,000 mt estimate for consumption.
These numbers, however, did not take into account idled Polish capacities and reduced operation rates. For example, in 2010, according to the Eurobserver report published in July 2011, production of biodiesel in Poland was estimated at 370,000 mt, while total capacity was twice as high, at 710,000 mt.
