APPEC: Diversified supply chains key to easing biofuel constraints: experts

A more diversified and flexible supply chain will be critical to overcoming constraints on biofuels growth, industry participants said during a panel discussion at APPEC 2026 in Singapore on Sept. 9.

Panelists said the key bottleneck is not an outright physical shortage of feedstock, but a lack of predictability, both in available volumes and in the regulatory frameworks that determine what material can be used and where.

Andrea Martelli, global head of biofeedstocks/biofuels trading, supply and sustainability at Eni Trade & Biofuels, said the industry needs to move away from reliance on a narrow pool of "stable" feedstocks such as palm oil and instead build the technology and logistics to handle a broader range of inputs.

Refineries should invest in greater processing flexibility — through pretreatment capability and commercial networks — to manage a wider variety of feedstocks, potentially up to 10 different types with varying qualities, so that disruptions in any single channel do not translate into lower utilization or supply dislocation, Martelli said.

Vinesh Sinha, CEO of Fathopes Energy, said a key constraint is "the descriptive nature" of what can be used, adding that greater geographic and feedstock diversification would help relieve market stress as competition intensifies for waste-based materials.

"When we get a new rule or certification, we need to sit down and discuss which certificate we will get," Tatsuhiro Alexander Mikami, team leader, origination, renewables/oil & fats at Sojitz, said. "Running multiple certificates is too much work for collectors and rendering facilities. In reality, we end up choosing one market before we even get the certificate."

Uncertainty can function like a shortage, Mikami added, noting that without consistent measurement and data transparency on feedstock flows, banks and financiers can be reluctant to lend against procurement strategies, even when market participants believe volumes exist.

Mikami cited difficulties tracking used cooking oil volumes in Japan as an example of how data gaps can undermine confidence and, in turn, curb investment, particularly for newer, more fragmented feedstocks where collection networks are dispersed and reporting standards vary by jurisdiction.

Regulatory stability was described as another key factor. Martelli and Sinha said frequent policy shifts, such as abrupt bans, eligibility changes or uneven enforcement, can make supply chains fragile. This can force repeated pivots between compliance regimes and discouraging long-term commitments across the value chain.