EU Palm Oil Imports Decline Further as Biofuel Rules Tighten Across Europe

The European Union's (EU) palm oil imports have consistently declined, reflecting a sustained downward trend in intra-community consumption. Between July 2025 and early March 2026, the EU imported 1.9 million tonnes of palm oil, a slight decrease from the nearly 2.0 million tonnes in the same period the previous year. This ongoing reduction is attributed primarily to evolving EU regulations and heightened public scrutiny over palm oil's environmental impact.

A key factor driving the import reduction is the EU Renewable Energy Directive II (RED II), which mandates the gradual phasing out of palm oil-based biofuels by 2030 due to concerns over indirect land-use change (ILUC) and deforestation. Many EU member states, including Germany, France, and the Netherlands, have already excluded palm oil-based biofuels from national quota obligations or removed tax incentives ahead of the 2030 deadline. Additionally, the EU Deforestation Regulation (EUDR), enacted in 2023 and fully effective by the end of 2025, requires companies to perform due diligence to ensure commodities like palm oil are deforestation-free and legally sourced.

As palm oil biofuel eligibility diminishes, there is a notable increase in the import of waste oils and fats for transport fuel production. These alternatives, particularly those used for biodiesel and hydrotreated vegetable oil (HVO), often benefit from double-counting towards national quota obligations, making them more attractive. However, organizations like the Union zur Förderung von Oel- und Proteinpflanzen (UFOP) warn that this system creates incentives for fraud and may generate "virtual" greenhouse gas (GHG) reduction quotas that do not genuinely contribute to climate mitigation targets. There are also concerns about loopholes, such as increased imports of palm oil mill effluent (POME) and other residues, which can be exempt from certain sustainability criteria.

The decline significantly impacts major palm oil producing nations like Indonesia and Malaysia, the world's top two exporters. While Indonesia's deliveries between July 2025 and early March 2026 dropped 8 percent year-on-year, Malaysia, the second-largest supplier, saw its imports rise by about 4 percent in the same period.

Within the EU, import patterns vary. The Netherlands remains the primary hub for European palm oil trading and biofuel production, absorbing a significant volume, some of which is then redirected to other member states. Conversely, countries like Italy, Greece, Sweden, and Denmark have experienced sharp declines in their palm oil imports. However, a few countries, including Belgium, Spain, and Germany, have seen slight increases in imports, largely driven by demand from the food and chemical industries rather than biofuels.

Impact on Prices of Chemical Commodities Tracked by ChemAnalyst

The reduction in EU palm oil imports is likely to exert downward pressure on global crude palm oil (CPO) prices due to weaker European demand, although increased consumption from other regions may partially offset the decline. Prices of palm-derived fatty acids, fatty alcohols, glycerine, stearic acid, and oleochemicals could remain volatile as producers adjust export strategies. Meanwhile, stronger demand for used cooking oil, animal fats, and waste-based feedstocks may support higher prices for these alternative raw materials. Biodiesel and HVO feedstock costs could also increase because of tightening supply, while sustainable certified vegetable oils may continue to command price premiums in European markets.