Malaysia's POME exports to EU soar in 2023 on healthy waste feedstocks demand
25/01/2024 (S&P Global) - Malaysia's exports of palm oil mill effluent, or POME, climbed in 2023 from a year ago, fueled by healthy demand for waste-derived feedstocks for biodiesel production in the EU, according to the Malaysian Palm Oil Council.
Export shipments of POME swelled 184% on the year to 415,520 mt in 2023, while other key palm products exported to the EU such as crude palm and palm stearin dropped 41.78% and 5.8%, respectively.
These three palm derivatives accounted for 35% of the total Malaysian palm products exported to Europe last year, and demand for POME saw a staggering increase last year compared with 2022, the MPOC noted.
The MPOC attributed the rise in POME exports to robust demand for POME from Italy, the Netherlands, Spain, and Belgium.
"The appetite toward POME is likely to remain strong, given its waste-derived feedstock status... sales to the EU could grow further this year," a Singapore-based trader said.
POME, a waste from the production of palm oil, is considered a second-generation biodiesel feedstock under the EU Renewable Energy Directive and is eligible for double counting toward biodiesel mandates in Europe. It is much coveted by blenders in the EU because of its higher greenhouse gas savings credentials, which helps them meet ambitious renewable transport fuel targets.
There were already indications in the POME spot market that buyers were keen on ISCC-certified Malaysian POME, and on account of that, tradable values heard in the Asian POME spot market have climbed to more than $700/mt FOB, market sources said.
The FOB Malaysia POME price was assessed at $730/mt at the Jan. 24 market close, up 3.5% compared with $705/mt when Platts first began assessing the price on Jan. 2, S&P Global Commodity Insights data showed.
Malaysia and Indonesia are the world's largest producers and exporters of POME, both being the top two global palm oil producers. Large amounts of POME was known to have been exported to Europe and China to produce hydrotreated vegetable oil or HVO.