UDSA GAIN reports address Polish, Lithuanian ethanol production

By Ann Bailey | July 14, 2016

Total production of bioethanol in Poland is estimated at 200,000 metric tons, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. The domestic production capacity of both bioethanol and biodiesel is surplus and more investment in them is not anticipated, the recently released GAIN report said.

The National Indicative Target for Poland this year is 7.1 percent and gradually will increase to 10 percent in 2020, the report said. As an EU member state, the country must follow the Renewable Energy Directive, which sets a general target of 20 percent renewables in all energy used by 2020. The RED also creates a sub-target of 10 percent renewables in the transport sector. In 2017 the upper limit for first-generation renewable energy will be set at 7 percent. The remainder of the target must be fulfilled from other biofuels sources. Fuel suppliers are required to reduce the greenhouse gas intensity of the EU fuel mix by 6 percent by 2020 in comparison with 2010, the report said.

Domestic corn mainly is used to produce ethanol in Poland with the commodity making up 80 percent of the country’s feedstock input, the report said. Poland has 11 ethanol plants with total production capacity of 511,000 metric tons. Ethanol capacity has decreased over the years. In 2015 the share of production in total production capacity was less than 30 percent. Low ethanol prices make imported ethanol more competitive so Poland’s domestic capacity for production of ethanol isn’t fully use, the report said.

A recent GAIN report, meanwhile, estimated Lithuanian ethanol production at 12,000 metric tons, about half of the 2011 production of 23,000 metric tons. In 2014 one of two Lithuania plants producing ethanol went bankrupt, the report said. Total ethanol consumption in 2015 is estimated at 11,000 metric tons, 4,000 metric tons less than consumption five years ago.

Lithuanian biofuel production commenced in 2002 and has expanded since then. The share of biofuels as a percentage of total fuels also has been increasing, beginning in 2005 at less than 0.5 percent and increasing to more than 6 percent by 2015, the GAIN report said. However, a price reduction for regular fuels made biofuels less competitive in 2014. There also are still only a small number of Lithuanian vehicles that use biofuels. The harsh winter conditions and low temperatures in Lithuania also make using high ethanol blends dangerous to car engines, the report said. Finally, blending companies in Lithuania can buy bio-components from other EU producers whose prices are more competitive which makes it challenging for local producers to sell their higher cost biofuels, the report said.