Hungary’s Biofuel Market

In 2005 the Hungarian Exise Tax Act was amended regarding the sale of biofuels. The amendment stipulated that from July 1, 2007 fuels with a 4.4 volume percentage bioethanol content will be sold in Hungary. It equally stipulated that from January 1, 2008 fuels with a 4.4 volume percentage biodiesel content will also be sold. Hungary’s stated 2010 biofuel objective is 5.75%, which is calculated in relation to energy content. Blending requirements for this transition are 144 thousand tonnes of bioethanol (or 106 thousand tonnes of ETBE, due to its higher energy content) and 183 thousand tonnes of biodiesel. Hungary’s planned biofuel production capacities are approximately 3 million tonnes of bioethanol and 400 thousand tonnes of biodiesel, which seems farfetched both from a raw material and market point of view. Generous long-term estimates predict bioethanol production will utilise 40-50% of Hungary’s maize production, (3-4 million tonnes) and 1.2 million tonnes of wheat. And from this would come 1.4-1.7 million tonnes of bioethanol. Hungarian rape and sunflower seed total approximately 850 thousand tonnes, and from this approximately 255 thousand tonnes of biodiesel could be produced. Hungarian domestic demand does not require this much product, and these quantities would entail major exports, especially for bioethanol (1.2-1.5 M tonnes).