Biofuels in Portugal

Considering the national profile of fuel consumption by road transport, which clearly favors diesel, Portugal based its commitment to biofuels on the production of diesel substitutes, in particular biodiesel (FAME).

Biodiesel can be processed from different types of raw materials such as vegetable oils (eg soy, rapeseed, palm or sunflower), animal fats or used cooking oils.

Until mid-2014, the main raw material used in the national production of biofuels was soybean oil. Currently, used cooking oil is the main raw material used, accounting for around 60% in 2018, as can be seen in the following figure. 

                                           Figure 1 - Raw materials used in the national production of biofuels in 2018. Source: LNEG/ECS

Biofuel Producers

The large biodiesel producers benefited, until the end of 2010, from an exemption from ISP, €280/1000 litres, provided for in Ordinance No. 1391-A/2006, of December 12, for the year 2007, and by Ordinance 1554-A/2007, of December 7, for the three-year period 2008 to 2010. Partial ISP exemption quotas were granted, taking into account the following criteria, in hierarchical order: 

 

 

1. Biofuels derived from endogenous agricultural production from regions covered by the Program for the Recovery of Depressed Areas and Sectors of the Economy, in accordance with Council of Ministers Resolution No. 11/2004, of 22 January;
2. Biofuels derived from waste (animal fat or used vegetable oils) and seaweed of national origin;
3. Biofuels produced in national territory from oils also extracted in national territory;
4. Other biofuels produced in the national territoryImported biofuels.

 

 

Thus, in 2010, there were five large biodiesel producers in Portugal with partial ISP exemption quotas. However, with the entry into force of the publication of Decree-Law No. 117/2010, of October 25, the exemptions granted to these producers ended, with only the exemptions granted to companies recognized as small dedicated producers remaining.

 

Dedicated Small Producers

 

The use of used cooking oils and animal fats for the production of biofuels presents itself as an ecological alternative to their disposal, an alternative that is relevant for small dedicated producers, who use biological waste as raw material for the production of biofuels. With the aim of promoting local waste management, namely from the collection and processing of cooking oils and at the same time contributing to the reduction of greenhouse gas emissions in transport, Decree-Law No. came to introduce the figure of small dedicated biofuel producers (PPD), which remains in the current wording of Decree-Law No. 117/2010, of 25 October.

 

These producers benefit from total exemption from taxes on oil and energy products, this recognition being subject to a joint order from the Director General of Energy and Geology and the Director General of the Tax and Customs Authority.

Companies that, cumulatively, meet the following eligibility requirements may be eligible for recognition as a dedicated small producer:

 

1. Maximum annual production of 5000 tons of biofuels or other renewable fuels;
2. Production originating from the use of at least 80% by mass of raw materials listed in Annex IV of Decree-Law No. 117/2010, of October 25, in its current wording, or using processes and technologies advanced or in the demonstration phase, intended for the production of advanced biofuels and other renewable fuels;
3. Place your production in captive fleets and consumers, duly identified;
4. Go the sustainability criteria provided for in Decree-Law No. 117/2010, of October 25, in its current wording,

Goals for incorporating biofuels:

 

As already mentioned, the profile of fuel consumption in road transport in Portugal favors diesel, with Portugal starting its efforts to promote biofuels in the production of diesel substitutes.

Thus, to help promote the use of biofuels, Decree-Law No. 49/2009, of February 26th, established mandatory targets for biofuels for diesel for road use: 6% in volume for 2009 and 10% for 2010.

This obligation, however, was limited by the maximum content of fatty acid methyl esters (FAME) specified in the EN 590 standard (this value being set at 7% by volume in 2010).

With the publication of Decree-Law n.º 117/2010, of October 25th, however amended by Decree-Laws 6/2012 of January 17th, 69/2016, of November 3rd and 152-C/2017 of December, a new model for promoting biofuels is defined, in which sustainability criteria are established for the production and use of biofuels and bioliquids, regardless of their origin, as well as the definition of minimum targets for the mandatory incorporation of biofuels for the years 2011 to 2020. 

 

Thus, the aforementioned decree-law establishes, for entities that introduce fuels for consumption for road use, processing the declarations of introduction for consumption under the terms of the Special Taxes Code on Consumption, mandatory targets for the incorporation of biofuels in these fuels (gasoline and diesel ), with the target for 2020 being 10% in energy content.

 

Compliance with the targets established under Decree-Law No. 117/2010, of October 25, is evidenced by presenting biofuel certificates (TdB), each TdB representing a ton of oil equivalent (toe) of biofuels destined be introduced into national consumption and that meet the sustainability criteria provided for in that legal diploma.

 

The following figure shows the evolution of the national production of diesel substitute biofuels since 2011.

   Figure 2 - Evolution of national production of diesel substitute biofuels between 2011-2018 (in Ktons)