A new EU law would limit the use of biodiesel derived from certain feedstocks to current volumes through 2023 but then zero out their use by 2030. Palm oil is one of the affected feedstocks because of its link to deforestation. Reuters reports that Indonesia may challenge the legislation at the World Trade Organization, stating that it unfairly characterizes current palm oil production as environmentally unsustainable and instead favors EU-based oils. The EU takes about 15 percent of Indonesia’s palm oil exports and about 13 percent of Malaysia’s.

EU domestically produced rapeseed oil will benefit from the law in the near term. It is already the EU’s top industrial oil feedstock, at around 7.0 MMT per year compared to 3.5 MMT for palm oil. Rapeseed oil production is around 10.0 MMT per year in the EU, and acreage is expanding again after declining a few years ago.

EU supply vs. industrial use of palm and rapeseed oils

Source: USDA
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