April 2, 2007

Hungary's bio-ethanol output to reach 1.3 million tonnes annually by 2009

Production of bio-ethanol in Hungary is expected to reach about 1.3 million tonnes yearly starting 2009, according to a research study conducted by the Hungarian Bio- ethanol Alliance (MBSz).

Laszlo Zsemberi, MBSz chairman said in order to fulfil EU requirements of a 5.75 percent ratio by 2010 and 10 percent by 2020 (ratio of bio-ethanol within the total), the country needs to reach an output of more than a million tonnes within two years.

The study also revealed that Hungary's export revenues from bio-ethanol are seen to increase from zero to about EUR 500 million by 2010 if ongoing bio-ethanol manufacturing investments have been effectively carried out.

In addition to bio-ethanol as a core product, companies in the sector are also expected to produce about 263 GWh electricity annually, as well as 828,000 tonnes of DDGS (Dried Distillers Grains with Solids, a bio- ethanol byproduct used as livestock feed) and 890,000 tonnes of liquid carbon dioxide in 2009.

The study is based on assumptions that the Hungarian bio-ethanol market will use about 4 million tonnes of crops (both wheat and corn) annually for production, which is considered achievable in the medium term.

Zsemberi said Hungarian farmers will realize long-term contracts with bioethanol producers are better than selling their product at unpredictable prices abroad.

However, delays in anticipated government measures such as domestic market subsidies, lower registration fees for bio-ethanol fuelled cars and lower taxes on the E85 fuel (which includes 85 percent bio-ethanol and 15 percent gasoline), will also endanger the rapid development of the bio-ethanol market in Hungary.

Deputy Chairman Demeter Hejj said their projections will only work if Hungary takes its duties seriously and takes concrete steps to promote the spread of bioethanol in line with the undertaking to reach a 5.75 percent ratio in gasoline by 2020.