Key facts
- Spain's implementation of the EU's RED III directive is expected to boost demand for HVO Class III from 2027.
- The RED III directive will move away from double counting for biofuels.
- Indonesia has allocated 16.7 million kiloliters of production volume targets for 2026.
- 26 Indonesian biodiesel producers will receive production volume targets for 2026.
- Indonesia's B50 mandate requires a 50% fossil diesel-biodiesel blend.
- Australia will cap soil carbon crediting under its methodology.
- The Emissions Reduction Assurance Committee recommended mitigation strategies for soil carbon credits.
- Kazakhstan is discussing investments in coal chemistry projects with Chinese investors.
- Kazakhstan aims to develop six coal-to-chemical projects between 2026 and 2031.
Spain's upcoming implementation of the EU's RED III directive is projected to drive increased demand for Hydrotreated Vegetable Oil (HVO) Class III biofuels from 2027. This directive's shift away from the "double counting" of certain biofuels means that higher absolute volumes of renewable fuels will be required to meet greenhouse gas reduction quotas. The change is expected to significantly impact the market for HVO Class III.
In Southeast Asia, Indonesia's Ministry of Energy and Mineral Resources has established production volume targets for 2026, allocating 16.7 million kiloliters to 26 domestic biodiesel producers. This allocation is in preparation for the nation's continued implementation of its B50 mandate, which requires a 50% blend of fossil diesel with biodiesel.
Australia is introducing a cap on soil carbon crediting under its current methodology. The Department of Climate Change, Energy, the Environment and Water announced this measure due to concerns about the integrity of the credits and the risk of over-crediting. The Emissions Reduction Assurance Committee recommended these mitigation strategies after identifying that some projects reported carbon accumulation rates exceeding those found in scientific literature.
Concurrently, Kazakhstan is in discussions with Chinese investors regarding potential investments in coal chemistry projects. This initiative aligns with Kazakhstan's broader strategy to expand its coal sector. The Central Asian nation has set a goal to develop six coal-to-chemical projects between 2026 and 2031, signaling a significant focus on this area of industrial development.