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Aug 2023

Cut to 6% would erase 1 million mt of HVO demand

Published on May 08, 2023 on our customer app


  • We integrated SCB data for pools’ growth, showing that both diesel (-5%) and gasoline (-0.3%) have reduced further down, well below our previous anticipation
  • We received insider info from the Energy Agency, showing a clear improvement of GHG performance in 2022 for ethanol (5.7 gCO2eq/MJ in average vs 9.9 in 2021), bionaphta (6.7 vs 9.2), Fame (17.4 vs 22.9) and SAF (6.8 vs 7.6)
  • Our model calculated slightly lower needs than previously expected for HVO blended, still 25% up compared to 2021 at 1.29 million mt
  • We have decreased our previsions for ethanol demand, seen at 209 Kcum (optimization of the blend wall) and increased our forecast for bionaphta needs, which become a crucial part of the gasoline GHG mandate compliance
  • Logically, jet fuel sales rebounded by 70%, boosting needs under the 1.7% GHG reduction SAF mandate, now estimated at 13 KT


  • We modified the expected growth rates of diesel (-3%) and gasoline (-1%) pools, both seen as structurally weak in the wake of road electrification
  • Because of the mandate freeze, that implies a slight slowdown in demand for all blended products, which we assumed in line with pools
  • We assumed for now the B100 and HVO100 figures to be stable compared to 2022
  • SAF demand is seen progressing to 21 KT, mostly UCO and AF based


  • The freshly announced cut of diesel and gasoline mandates to 6% will have massive impacts on the diesel segment
  • Our model shows that if the Fame demand would remain the same as 2023 (still below B7), then HVO needs to cover the 6% GHG mandate would be of only 100 KT: a collapse of 92% from 2023 (1.25 million mt)
  • We however assumed the Fame demand would be hit (-20%), putting our HVO forecast at 135 KT (-89% vs 2023)
  • This massive drop in demand will cut about a quarter of the EU HVO consumption
  • It is too early to assess the impact on the HVO100 outlet, which could see a boost thanks to the potential price fall expected soon
  • We cautiously increased our views on HVO100 compared to the latest issue (+ 20%)
  • The gasoline segment will be significantly less impacted, as the 1.8% GHG cut will be small in comparison
  • It will basically hurt HVO producers a second time, as their by-product (bionaptha) will not be needed anymore to fuel GHG reduction ambitions: E10 with performing GHG savings will be enough

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