Hungary’s Biofuel Market

In 2005 the Hungarian Exise Tax Act was amended regarding the sale of biofuels. The amendment stipulated that from July 1, 2007 fuels with a 4.4 volume percentage bioethanol content will be sold in Hungary. It equally stipulated that from January 1, 2008 fuels with a 4.4 volume percentage biodiesel content will also be sold. Hungary’s stated 2010 biofuel objective is 5.75%, which is calculated in relation to energy content. Blending requirements for this transition are 144 thousand tonnes of bioethanol (or 106 thousand tonnes of ETBE, due to its higher energy content) and 183 thousand tonnes of biodiesel. Hungary’s planned biofuel production capacities are approximately 3 million tonnes of bioethanol and 400 thousand tonnes of biodiesel, which seems farfetched both from a raw material and market point of view. Generous long-term estimates predict bioethanol production will utilise 40-50% of Hungary’s maize production, (3-4 million tonnes) and 1.2 million tonnes of wheat. And from this would come 1.4-1.7 million tonnes of bioethanol. Hungarian rape and sunflower seed total approximately 850 thousand tonnes, and from this approximately 255 thousand tonnes of biodiesel could be produced. Hungarian domestic demand does not require this much product, and these quantities would entail major exports, especially for bioethanol (1.2-1.5 M tonnes).Production, consumption and export of bioethanol and biodiesel, raw material supply and handling of by-products, Resource /Energy Economics and Policy, Marketing,

Hungary’s Biofuel Market

In 2005 the Hungarian Exise Tax Act was amended regarding the sale of biofuels. The amendment stipulated that from July 1, 2007 fuels with a 4.4 volume percentage bioethanol content will be sold in Hungary. It equally stipulated that from January 1, 2008 fuels with a 4.4 volume percentage biodiesel content will also be sold. Hungary’s stated 2010 biofuel objective is 5.75%, which is calculated in relation to energy content. Blending requirements for this transition are 144 thousand tonnes of bioethanol (or 106 thousand tonnes of ETBE, due to its higher energy content) and 183 thousand tonnes of biodiesel. Hungary’s planned biofuel production capacities are approximately 3 million tonnes of bioethanol and 400 thousand tonnes of biodiesel, which seems farfetched both from a raw material and market point of view. Generous long-term estimates predict bioethanol production will utilise 40-50% of Hungary’s maize production, (3-4 million tonnes) and 1.2 million tonnes of wheat. And from this would come 1.4-1.7 million tonnes of bioethanol. Hungarian rape and sunflower seed total approximately 850 thousand tonnes, and from this approximately 255 thousand tonnes of biodiesel could be produced. Hungarian domestic demand does not require this much product, and these quantities would entail major exports, especially for bioethanol (1.2-1.5 M tonnes)

The potential for the production and use of biomass-based energy sources in Hungary

Directive 2009/28/EC established a common framework for the use, production and promotion of energy from renewable sources. Subsequently, each European Union Member State was required to prepare a national Renewable Energy Action Plan (REAP) which specifies the share of energy from renewable sources to be consumed in transport, as well as in the production of electricity and heating, in 2020. The Hungarian REAP was published in December 2010. In order to identify what further steps are required to meet the targets set by the REAP, in this article we review the current situation and the potential in Hungary for the production and use of biomass, biogas and biofuel. We conclude that the annual quantity of required biomass is already available and it should be possible to meet the demand for solid biomass for direct combustion without the need for significant areas dedicated to energy crops. The establishment of biogas power plants is determined both by electricity generation and by waste management considerations. Targeted financial support and new regulations are required to promote the injection of upgraded biogas into the natural gas grid. Hungary has great potential to produce first generation biofuels, particularly ethanol, not only for domestic needs but also for export