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Biodiesel from rapeseed (brassic napus) oil in Czech Republic

Daniel Provaznik

Edit: Axel Dargein

Description of the product or technology.

Biodiesel is a methyl ester of fatty acids from rapeseed, but also from many others energy crops. Biodiesel and ethanol are the two main biofuels/bio-components used in the EU (Souček, Ocić 2011).

The main advantage of biodiesel is that it can be blended with petrodiesel in any proportion or can serve as a replacement of it. Biodiesel is a diesel mixed with more than 30% of methyl ester of fatty acids (Bažata 2013). So, it plays an increasingly important role in the motor fuel market thanks the economic and ecological advantages it induce (Souček, Ocić 2011).

Description of the market.

The market for biofuel was established in the beginning of 1990s and the share of biofuel has already reached several percent of the total diesel fuel consumption in the Czech Republic (Souček, Ocić 2011). The reasons for creation of this programme was to provide an alternative to classic diesel and to increase the utilization of agricultural land for non-food products. In the early 2000s biodiesel was a popular option, but its popularity decreased significantly because of two events which tarnished its notoriety (Enviweb 2005).  

The first time, when the Czech Republic joined the EU in 2004 (Bažata 2013). And the second time, in 2015 when the European commission increased significantly the consumer’s tax for biofuels. That caused an increase in prices and a decrease in demand for biodiesel. Because of this the government saved a lot of money on subsidies. Some gas stations even replaced biodiesel with other fuels and not even continued to sell them. The consumption of classic diesel increased. Some gas stations owners blended biodiesel with classic diesel in the maximum allowed ratio so they could sell their supplies. Today, companies are still making the same amount of methyl ester from rapeseed oil, but they are earning less money (Vlková 2017).

Description of the policy measures.

From the year 1991 to 1998 the production of methyl ester from rapeseed oil was indirectly supported by having no consumption tax. The government also provided 721,5 million of CZK for constructions of technologies designed for processing rapeseed.

In 1999 the production of methyl ester from rapeseed oil was subsidised directly - for each produced kilogram, the government subsidized by 3 CZK. In the year 2000, in direct reaction to it, there was a significant increase in production of methyl ester from rapeseed oil and therefore all the existing support had to be changed.

The mixed fuel with the amount of 31% of methyl ester from rapeseed oil and 69% of diesel started to be the most common version of biofuel in the Czech market. Indeed the previous benefits were cancelled, and the new price of biodiesel was set, based on the development of the price of the regular diesel, but it was subsidised so it would be cheaper for 12,5%.  Then they began to reduce the benefits of the subsidies in order to reach the final price. In the year 2001 the support of biodiesel was decreased to being cheaper only for 10% and the consumer tax for the mixed diesel was also decreased. Later the subsidy for biodiesel was decreased again, until it represented only 5%. So without the difference of value added tax (22% for diesel, 5 % for biodiesel) the biodiesel was sold for higher price, so the subsidy was changed back to biodiesel being cheaper by 10% again in 2002. In 2004 the difference in value added tax between mixed biodiesel and normal one was cancelled. Due to Czech Republic joining the European Union in 2004 and respecting it’s rules the existing support needed to be cancelled. The consumer tax for mixed diesel was proposed to be by 3,03 CZK/l lower and the production of methyl ester of rapeseed oil was subsidised by 7,85 CZK/kg (Enviweb 2005). But because the current support was cancelled, and it took several years for the new system to work there was a significant drop in consumption of biodiesel (Bažata 2013).

The consumption of biodiesel B30 (30% of methyl ester from rapeseed oil) from 1992 to 2011.

(BAŽATA, Miroslav: Bionafta a směsná motorová nafta. Biom.cz [online]. 2013-05-06 [cit. 2019-01-23]. Dostupné z WWW: <https://biom.cz/cz/odborne-clanky/bionafta-a-smesna-motorova-nafta>. ISSN: 1801-2655.)

 

In 2013 the consumption tax was set on 7,665 CZK/l for biodiesel and 10,95CZK/l for diesel, so the difference was 3,285 CZK/l (Bažata 2013). In 2015 the European commission increased the consumer tax on biodiesel significantly, which has led to a significant decrease in its popularity (Vlková 2017).

Evaluation of the effect of this measures

In my opinion the support for biofuels was done poorly. The system in long term is obviously not working and consumes a lot of money which could be used elsewhere. But the main problem is concerning the support of biodiesel and methyl ester from rapeseed, the massive production of rapeseed damaged the Czech landscape and agriculture itself.

The production of rapeseed in the Czech Republic is the highest in the EU, with an european average of 6,3% of agricultural land. The average of the Czech Republic is 16%. In the past years the production of rapeseed in the Czech Republic was significantly lower and almost all of it was intended to be used for food industry, now 50% of it is produced for energy purpose. The production of rapeseed is also intensive and concern a big portion of land. So it has also ecological risks like soil degradation. Even the ratio of produced crops have significantly changed, because of rapeseed, during the past few decades (Golis 2018).

The development of area used for growing selected agricultural crops from 1960 to 2016.

GOLIS, Ondřej: Evropské žluté prvenství Česka. Otázky a odpovědi k pěstování řepky olejky. irozhlas.cz [online]. 2018-05-10 [cit. 2019-01-23]. Dostupné z WWW: <https://www.irozhlas.cz/zpravy-domov/repka-dotace-zlute-pole_1805100610_pek>.

 

The last downside of rapeseed is that it creates an unpleasant smell which can annoy people living nearby and it is also harmful to roe-deer (capreolus capreolus). The animals can become blind after eating the rapeseed and suffer from other unpleasant affects.

References:

SOUČEK, Ivan; OCIĆ, Ozren J.: Long-term sustainability of bio-components production Hemijska industrija [online]. 2011-07-18 [cit. 2019-01-23]. Dostupné z WWW: <http://www.doiserbia.nb.rs/Article.aspx?ID=0367-598X1100078S>. ISSN: 0367-598X
BAŽATA, Miroslav: Bionafta a směsná motorová nafta. Biom.cz [online]. 2013-05-06 [cit. 2019-01-23]. Dostupné z WWW: <https://biom.cz/cz/odborne-clanky/bionafta-a-smesna-motorova-nafta>. ISSN: 1801-2655.
VLKOVÁ, Jitka: O biopaliva není na pumpách zájem, stát ušetřil stovky milionů na dotacích. Idnes.cz [online]. 2017-01-30 [cit. 2019-01-23]. Dostupné z WWW: <https://www.idnes.cz/ekonomika/domaci/biopaliva-se-neprodavaji-stat-usetril-na-dotacich.A170129_201703_ekonomika_jol>.
ENVIWEB: Vývoj programu podpory zpracování semene řepky olejné na výrobu metylesteru řepkového oleje (MEŘO) a jeho uplatnění ve směsném palivu v ČR. enviweb.cz [online]. 2005-03-07 [cit. 2019-01-23]. Dostupné z WWW: <http://www.enviweb.cz/52389>.
GOLIS, Ondřej: Evropské žluté prvenství Česka. Otázky a odpovědi k pěstování řepky olejky. irozhlas.cz [online]. 2018-05-10 [cit. 2019-01-23]. Dostupné z WWW: <https://www.irozhlas.cz/zpravy-domov/repka-dotace-zlute-pole_1805100610_pek>.