Bio-mandates cuts to worsen oil supply security: IEA

Bio-mandates cuts to worsen oil supply security: IEA

London, 13 April (Argus) — Oil demand and security of supply issues could be exacerbated by any reduction in biofuels mandates, according to the IEA, with biofuels making up around 2pc by volume of world oil demand.

Several countries have reconsidered or adjusted biofuel-blending mandates to reduce end-user energy price tensions following sharp gains to fuel prices at the pumps and increases in biofuels prices amid higher food, fertiliser and feedstocks values due to the conflict in Ukraine.

Last week Finland said it will reduce its biofuel mandate, calculated as the percentage of road fuel by energy content coming from renewable sources, for this year and 2023 by 7.5 percentage points to 12pc and 13.5pc respectively. Sweden has also proposed to freeze its mandate for 2023 at 2022 levels and Croatia has withdrawn penalties given to blenders that miss mandate targets.

Biofuels market participants told Argus that Austria is considering changes to its blending mandates, but this has yet to be confirmed by the country's ministry of climate action, environment and energy.

But while the IEA expects mandate reductions to biofuel mandates to increase challenges for the oil sector, the European Commission said cutting consumption of crop-based biofuels, mineral fertilizers, natural gas and reducing