8/13/2004 - Global Refining & Fuels Report - World production of oilseedsand palm oil is increasing, partly due to increased biodiesel use,according to the U.S. Department of Agriculture (USDA).

Specifically, oilseeds and palm oil production is forecast to expand in2004/05 to 379.1 million metric tons (up 12% from 2003/04) and 29.84million metric tons (up 3% from 2003/04), respectively, according toUSDA's Foreign Agricultural Service.

"Worldwide interest in biodiesel is expanding rapidly," USDA said, notingthe alternative fuel uses both oilseeds and palm oil as its feedstocks,among others.

According to USDA, "the current high world price for crude oil (lightsweet crude for August delivery on the New York Mercantile Exchangesettled at US$40.77 on 15 July) makes biodiesel production moreattractive."

The agency pegged the top hotspot for biodiesel production as Europe,which produces than 1.4 million tons/yr. European biodiesel productioncontinued expanding in 2003, increasing to 1.43 million tons, up 35% from1.07 million in 2002, USDA said.

Further promoting the use of the fuel is the EU Council of Ministers' 2003adoption of rules that allow member states to reduce excise taxes onbiofuels, including biodiesel, the agency noted. Biodiesel production inthe EU's new 10 member states is unclear, according to USDA. However, theCzech Republic has reduced its value-added tax on biodiesel production,Poland is considering a draft law to increase biodiesel consumption and inLithuania, the construction of the country's first biodiesel plant isbeing planned, USDA said.