Potential EU Ban on Palm Oil in Biodiesel Could be Windfall for Rapeseed and Soy
The EU is reportedly considering banning palm oil in biodiesel. If passed it could represent a windfall for rapeseed and soybean oils, while leaving Indonesia and Malaysia in the position of needing to find alternative markets for 2.6 million tons of palm oil, according to Rabobank.
On January 17 the EU Parliament voted on a preliminary measure calling for the elimination of palm oil from biodiesel as of January 2021, however, the decision will not be finalized until the completion of negotiations between the EU Parliament, EU Commission, and the EU Council, and the assurance that it is aligned with World Trade Organization regulations.
Currently, palm oil accounts for 27 percent of all feedstocks used in the production of EU biodiesel. If rapeseed is used in place of palm oil, EU crushing would need to increase by 8.2 million tons, resulting in much higher imports. Or in another alternative scenario, higher volumes of soybean oil could be imported from Argentina.