Biofuel demand in the European Union is set to fall by 2031 as the transport sector shifts from fossil fuel.
Palm oil imports are also set to fall following tighter environment regulation, the European Commission revealed.
In its 2021-2031 Agricultural Outlook, the Commission projected that EU biodiesel use will fall 24% to 14.3 billion litres in 2031 after a peak at 18.9 billion litres in 2023, Reuters reported.
Bioethanol use would be less affected as it also has non-fuel applications, but it would still shed 10% to 6.4 billion litres in 2031 after rising to 7.1 billion litres in 2023.
The decline in biodiesel would mostly affect palm oil use due to stricter sustainability criteria, while rapeseed oil use is expected to remain stable, representing around half of biodiesel feedstock, the report revealed.
Under the EU's renewable energy directive, palm oil-based fuels are to be phased out by 2030, since palm oil has been classified by the bloc as resulting in excessive deforestation, a move that raised outcry from the world's two largest palm oil producers Malaysia and Indonesia.
Palm oil imports in the EU are expected to decline to 4 million tonnes by 2031 from 6.5 million tonnes in 2021, with most of the decrease attributed to falling demand for biodiesel, the Commission said.
The EU is expected to remain a net importer of biofuels but biodiesel imports are also likely to be limited by countervailing duties on imports from Argentina and Indonesia.
In ethanol production, the Commission expects maize to remain the principal feedstock, with a share of around 44% while use of wheat is set to fall and other cereals and sugar beet would remain relatively stable.
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