EU-US Waste Oil Imports Surge Twentyfold as Biofuel Demand Hits Vegoil Supply: IEA

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October 09, 2025

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by Samyak Pandey (S&P Global) Biofuels claiming 27% of vegetable oil production by 2030; Aviation SAF competing for same waste oils as road transport; Advanced feedstocks still niche despite policy support -- EU and US waste oil imports have surged twentyfold since 2020, intensifying pressure on global biofuel feedstock markets as biofuel demand outpaces vegetable oil supply, according to the International Energy Agency's latest Renewables 2025 report released on Oct. 7.

The agency projects biofuel feedstock demand will reach 825 million metric tons annually by 2030, marking a 25% increase from 2024 levels. By the decade's end, biofuels are expected to account for 27% of global vegetable oil production and 80% of estimated waste and residue oil supplies.

Waste oil trade jumps

According to the IEA, nearly 60% of the waste oil imports into Europe and the US originate from China and Indonesia, highlighting the global nature of the supply chain dynamics.

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Indonesia and Brazil maintain strong domestic feedstock availability, with production closely linked to local palm oil and sugarcane supplies.

In contrast, European and US markets are increasingly reliant on imports to meet ambitious renewable fuel targets.

Europe remains the largest demand center for waste and residue oils, though consumption is also rising in Southeast Asia to supply Singapore's growing refining capacity.

The supply pressure is reflected in pricing as EU waste and residue oil prices reached two-year highs in July 2025, according to data from Platts, part of S&P Global Commodity Insights, while US soybean oil futures rose 20% following higher blending obligations and policies prioritizing domestic feedstocks.

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The European Commission launched a Union Database for Biofuels to improve traceability and prevent double-counting, while ISCC, the main international certification scheme, suspended certificates for over 130 companies and tightened audit procedures, the IEA report stated.

In the US, the recent One Big Beautiful Bill Act eliminates tax credits for imported biofuels and those made from imported feedstocks, except for Canadian and Mexican sources.

Proposed Renewable Fuel Standard updates also halve credit values for fuels produced from imported feedstocks.

"These policy shifts are not expected to alter biofuel use significantly from last year's forecast, however, as biodiesel, renewable diesel and SAF were already over-complying with the RFS," the IEA noted.

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While waste and residue oils face supply constraints, advanced feedstock pathways remain limited.

The use of cellulosic ethanol and Fischer-Tropsch fuels is projected to nearly quadruple in the IEA's accelerated scenario but would still reach only 45 million mt/y by 2030.

"Alcohols and lignocellulosic biomass are expected to remain niche feedstocks in the main case, used primarily in the UK and the EU," the report stated, highlighting the continued challenge of scaling next-generation biofuel technologies.

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This competition between road transport biofuels and aviation SAF for the same premium feedstocks is expected to intensify pricing pressures throughout the decade.

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In the IEA's accelerated case, where biofuel demand could be 30% higher than the main forecast, total feedstock demand would grow an additional 125 million mt/y to reach 950 million mt by 2030

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The IEA noted that meeting these targets would require coordinated strategies emphasizing land-efficient practices such as yield optimization, intercropping, sequential cropping, and cultivation of marginal or degraded land, alongside scaling up emerging technologies that rely on more diverse feedstock sources.

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Performance-based standards are expected to underpin one-third of total biofuel demand by 2030, up from just under 20% in 2024, as governments increasingly shift from volumetric mandates to frameworks that reward greenhouse gas reductions, according to the IEA. READ MORE

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