South Korea to Introduce Biodiesel for Private Vehicles to Reduce Oil Imports and Air Pollution

Strategic Insights -

South Korea will start selling biodiesel, a mixture of diesel and rapeseed oil, for private vehicles from July, aiming to cut back on oil imports and reduce air pollution. The government aims to reduce crude imports and carbon dioxide emissions, and has agreed with local refiners to supply more eco-friendly fuel. The biodiesel will be a regular diesel mixed with 5% rapeseed oil, and consumers will not notice any difference in their vehicle's performance.

Key Takeaways:

  • The South Korean government plans to introduce biodiesel for private vehicles from July, as part of an effort to cut back on oil imports and reduce air pollution.
  • The biodiesel will be a mixture of 95% regular diesel and 5% rapeseed oil, with no noticeable difference in performance.
  • The cost of producing biodiesel is higher than refining crude oil, but the government expects to reduce crude imports and contribute to a reduction in carbon dioxide emissions.
  • The government plans to take measures to increase the use of eco-friendly fuel, aiming to have 5% of all energy used come from reusable, ecologically friendly sources by 2011.
  • Policymakers noted that while South Korea is introducing biodiesel relatively late, the country aims to catch up with the United States and European countries, which have been offering cleaner fuel since the 1990s.
  • The introduction of biodiesel is part of a voluntary pact among local refiners to supply more eco-friendly fuel.
  • Tax waivers for clean fuel will reduce the price of biodiesel by about 7 won per liter compared to regular diesel.
  • Officials are considering introducing biodiesel with a higher rapeseed oil content, up to 20%, in the future.

Statistics:

  • 5% rapeseed oil content in biodiesel, to be sold starting from July.
  • 7 won per liter price reduction due to tax waivers, compared to regular diesel.
  • 2011 target date for 5% of all energy used to come from reusable, ecologically friendly sources.
  • 20% rapeseed oil content under consideration for future introduction.

Sources:

  • Korea Ministry of Commerce, Industry and Energy (no date provided)
  • Yonhap (published March 2, 2006)