S Korea to Make Biodiesel Use Mandatory from 2012; Ahead of Schedule

Platts, Jan 7, 2011
South Korea has decided to make the use of biodiesel mandatory starting 2012, one year earlier than originally scheduled, in an effort to reduce the consumption of fossil fuel, the energy ministry said Thursday.

The Ministry of Knowledge Economy, responsible for energy, industry and commerce, has set the required biodiesel mix rate at 2% from 2012 under a Renewable Portfolio Standard aimed at boosting supplies of renewable energy.

"We will introduce a mandatory biodiesel mix rate system from 2012 as tax benefits on biodiesel will expire by the end of 2011," the ministry said in a statement. "This is expected to help in the recycling of waste resources and raise the country's energy independence," it said.

Biodiesel, a mixture of diesel fuel and biofuel made from grains such as soybean, palm and rapeseed, voluntarily makes up 2% of all diesel consumed in the country. The government has waived taxes for clean-burning biodiesel to boost consumption of the clean-burning fuel.

South Korea, the world's fifth-largest crude importer, became the first Asian country to mix biodiesel with conventional diesel in 2007 when refiners began selling diesel blended with 0.5% rape seed oil to local consumers. The blend has risen by 0.5% every year to 1% in 2008 and 1.5% this year.

In an effort to boost biodiesel consumption, South Korea would commercialize animal biodiesel and actively develop overseas farms, while investing in research and development for the next generation of biodiesel under its long-term plan, the statement said.

South Korean eventually aims to increase the portion of biofuel to 20% in diesel fuel after technology and safety problems are resolved. The engines on some vehicles running on the blend of 20%, or BD20, abruptly cut out during test runs. Biodiesel has a lower freezing temperature than regular diesel.
"More use of biodiesel would help cut South Korea's import of crude and reduce greenhouse gas emissions," the ministry official said. [Full story]

(With no domestic oil reserves, South Korea must import all of its crude oil. Compare South Korea's drive to reduce foreign oil dependency and greenhouse gas emissions with similar U.S. efforts, here.
It is worth adding that South Korea relies also on imports to satisfy nearly all of its natural gas consumption. It does not have any international gas pipeline connections, and must therefore import all gas via liquefied natural gas (LNG) tankers. Consequently, although South Korea is not among the group of top gas-consuming nations, it is the world's second largest importer of LNG after Japan. -- D.R.)