"This will put us in a situation whereby we can meet demand from 2008 through 2012, and supply our target markets with vehicle fuel that contains the required bio-fuel component," MOL's downstream technology director Artur Thernesz told reporters.
In a tender issued in January this year, MOL sought suppliers that could deliver at least a combined 150,000 tonnes of bio-diesel components per year, as the company is preparing to meet EU directives in the coming years on the bio-components of vehicle fuel.
Eventually, 23 applicants came up with offers, of which 11 met all necessary validity criteria. MOL eventually decided to contract seven suppliers, six of them Hungarian and one Slovakian, for a total amount of 220,000 tonnes per year.
MOL is attempting to meet EU and domestic requirements on the bio-components of vehicle fuel, an endeavor that is spurred by excise tax breaks not only in Hungary but also in MOL's export markets in neighboring countries. The bio-fuel portion of both gasoline and diesel fuel must reach 5.75% by 2010, up from around 0.5% in Hungary today and around 2% in Austria, the Czech Republic and Slovakia. In the interim, MOL plans to raise the bio-fuel content of vehicle fuels of all types to 4.4% by 2008.