By Ryu Jin
Staff Reporter
South Korea aims to raise the level of biomaterial content used in diesel fuel from the current 0.5 percent to 3 percent in 2012, while extending tax breaks for biodiesel fuel until 2010, according to the government Friday.
According to the Ministry of Commerce, Industry and Energy (MOCIE), the government plans to call for an annual 0.5-percentage point increase in the mixture level of biological content used in diesel fuel, over the next five years.
Deputy Prime Minister and Minister of Finance and Economy Kwon O-kyu convened a meeting of economy-related ministers and approved the ``Mid- to Long-Term Plans for Spread of Biodiesel.''
MOCIE officials said that the government would also extend tax benefits offered to biodiesel for three more years until 2010 since the actual product cost exceeds that of regular fuel.
Biodiesel refers to diesel-equivalent, processed fuel derived from biological sources such as vegetable oils, which can be used in unmodified diesel-engine vehicles. It is thus distinguished from the straight vegetable oils (SVO) or waste vegetable oils (WVO).
Largely made from rice grains, and soybean and rapeseed oils, biodiesel fuel constitutes the two main pillars of bio-fuel along with bio-ethanol, made from feedstock with a relatively larger amount of starch and sugar content such as corn or sugar cane.
Biodiesel has emerged as one of the major alternative energy sources to fossil fuels such as oil and coal in recent years because it emits less carbon dioxides, sulfur oxides and minute particulate materials that pollute the atmosphere and contribute to global warming.
South Korea began to supply biodiesel fuel in all of its gas stations starting from July last year. It has also provided BD20 fuel, which contains about 20 percent of biomaterial contents, to commercial vehicle operators specializing in maintenance facilities.
South Korea is the first country in Asia to mass produce biodiesel, although critics have said that bio material content levels are not high enough to have any significant positive effect, compared with advanced countries such as those in the European Union (EU).
As the government is poised to help promote in stages the spread of biodiesel locally, the market is expected to experience significant change in the coming years.
Currently, a total of 16 domestic firms, including SK Chemicals and Aekyung Petrochemical, are registered with the government to produce biodiesel, according to MOCIE.