We have previously written about the palm oil product PFAD, which has exploded in the Swedish transport sector in recent years, while the high demand is contributing to increased pressure on the rainforests of Southeast Asia (read "PFAD in the tank, what should I think?"). Last week, the transitional government, with the support of the Alliance and the Left Party, passed a regulation that means that from July 1, 2019, PFAD will no longer be classified as a residual product. We put three questions to Gröna Bilister fuel manager Per Östborn about what this means in practice.

1) What does the decision mean? 

Formally, this means that the definition of 'residue' is tightened. A substance will only be considered a residue of a production process if its market value is less than 40% of the value of the main product, or the substance has no other use than as an energy carrier.

PFAD (palm fatty acid distillate) consists of inedible fatty acids that are separated from palm oil during refining. The increasing demand for PFAD has caused its price to rise to over 90% of the price of palm oil. In addition to biofuels, PFAD is used for animal feed and soap, among other things. As a result, PFAD will no longer be considered a residual product. This means that PFAD will effectively be excluded from the Swedish market until it becomes traceable and meets the sustainability criteria for soil protection that are applied to other biofuel feedstocks.

2) What are the implications for the biofuels market?

In the short term, there will be a shortage of raw material for biodiesel of the HVO type. For private individuals, it may be difficult to find pure biodiesel HVO100 to refuel, as the companies will prioritize mixing the HVO available in ordinary diesel to meet the reduction obligation. The shortage will lead to an increase in the price of HVO.

These effects mean that it will be more profitable to invest in the production of HVO from slightly more expensive raw materials such as residues from Swedish agriculture and forestry. In a few years' time, the shortage of HVO will thus be remedied.

3) How do Green Motorists view this?

This decision was necessary. The rapidly increasing demand for palm oil products for biofuels in recent years has increased the pressure on the rainforests of South-East Asia. The more money that is pumped into the palm oil industry, the harder it becomes to prevent deforestation through laws and certifications.

There is a risk that palm oil will to some extent replace PFAD as a raw material for our biodiesel. But we consumers will not accept that, and we will be given the chance to opt out of such diesel when the environmental declaration of fuels is introduced in 2020. In addition, residues from Swedish agriculture and forestry have a much easier time competing with palm oil than with PFAD classified as residues.

Finally, we have the chance to make a sustainable transition to fossil-free.

Per Östborn, fuel manager at Gröna Bilister

An in-depth knowledge summary on PFAD is available on the Gröna Bilister website.