SWOT analysis of the biodiesel market in Greece

SWOT analysis of the biodiesel market in Greece

Strengths: Beside a quite high and encouraging awareness about biodiesel among Greek citizens, Greece can count on diverse feedstock options: e.g. sunflower, rapeseed, soy and especially cotton (because of the flourishing Greek cotton industry). Biodiesel production capacities are very high. Uncertain policy framework (CAP reform) leads farmers to seek new cropping options. Another asset is represented by the establishment of some regional support for the first Biofuels Platform (in central Greece).

Weaknesses:

Semi-arid climate conditions restrict yield potentials and lack of available cultivable land: average yields for rape and sunflower seed are about 1,75 tonnes/ hectare which is nearly half of the EU average. Oil yields of cotton seeds are low (about 325 litres of oil/ ha). Dry arid conditions prevailing in the country restrict yielding potential without irrigation.  

Small farming size and low yields prevent cost effectiveness; therefore most of the biodiesel plants rely on imports. It is estimated that only about 1/3 of the feedstock for biodiesel production may be supplied domestically. The current quota system does not create secure market conditions for investors. There is also an ongoing quality debate on biodiesel versus pure plant oil.

Opportunities:

There is a need to identify low input supply options as part of land use strategies to cope with more stringent future restrictions (e.g. water restrictions, etc.). Optimization of the use of residues and processing of by-products could also be crucial to improve biodiesel economics.

Increase biodiesel uses for heating applications may also provide more market opportunities. The introduction of a ‘policy mix’ with tax exemptions & mandatory targets will enable to create more certain market conditions.

Threats:

Quality: Variety of feedstocks with different physical and chemical properties. 9Market: not well established, limited end uses (only transport sector in certain areas for certain end users) and inflexible production quotas.

Policy: uncertainty deriving from the annual quota system and annual allocation of detaxation. Sustainability: careful selection of crops to minimise risks of erosion, water scarcity, etc. in the future supply chains.

International trade: low cost supply from neighboring Balkan countries although this is also an opportunity for cheap raw materials use.

Awareness: Create communication channels & synergies with the farming community.