Biofuel consumption in the European Union (EU) is set to fall by 2031 due to road transport moving away from fossil fuels, while tighter environmental regulation will lead to a drop in palm oil imports, according to the European Commission (EC) 2021/2031 Agricultural Outlook.

The EC projected that EU biodiesel use would fall 24% to 14.3bn litres in 2031 after peaking at 18.9bn litres in 2023, Reuters reported on 9 December.

Bioethanol use would be less affected as it also had non-fuel applications, but would still drop 10% to 6.4bn litres in 2031 after rising to 7.1bn litres in 2023, the report said.

The decline in biodiesel would mostly affect palm oil use due to stricter sustainability criteria, while rapeseed oil use was expected to remain stable, representing around half of biodiesel feedstock.

Under the EU's renewable energy directive, palm oil-based fuels would be phased out by 2030, due to deforestation concerns, Reuters wrote.

Palm oil imports in the EU were expected to decline to 4M tonnes by 2031 from 6.5M tonnes in 2021, with most of the decrease due to falling biodiesel demand, the EC said.

While the EU was expected to remain a net importer of biofuels, biodiesel imports were also likely to be limited by countervailing duties on imports from Argentina and Indonesia, according to the report.