Failure of European Seed Oils in Food vs Fuel Dilemma
Who should the EU blame on this quandary of food vs fuel?
Update August 29, 2025
The Jakarta Globe reported that Indonesia is bracing for the EU to appeal the WTO's ruling on palm-based biodiesel exports from Indonesia.
The EU has until October 22, 2025 to make a decision on whether to accept the ruling or file an appeal.
At its peak in 2019, Indonesia exported 1.32 million kilolitres of biodiesel to the EU in 2019 which dropped dramatically when countervailing duties were put in place by the EU.
The WTO's ruling is clearly problematic for the EU in its protection of domestic seed oil industries but the bigger problem for the EU is whether it will face up to the fact that it has failed to decarbonize its transport sector as outlined below.
Read Trump's Tailwinds for the palm oil industry
Blame it on the EU Commission’s willingness to suck up to NGOs like Transport & Environment who are doing their darndest best to keep the EU hooked on fossil fuels.
In its latest campaign against palm oil, Transport & Environment zeroed in on biofuels from palm oil wastes and condemned it as fraudulent.
Is this a discussion we should be having when the European Union is failing its climate commitments?
Frenetic posts about food vs fuel shows the poor understanding of groups like Transport & Environment of how Europe should fit in the global trade for food and fuel.
Yes it's true that biofuels from virgin rapeseed and sunflower oils compete with food as Transport & Environment says but they also power European economies like Germany.
So what if Europe burns over 17,000 tonnes of rapeseed and sunflower oils every day? This greases the EU’s workhorse in Germany.
Germany is the largest producer of rapeseed based biodiesel in the EU according to Biofuels International.
2024 statistics from The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has stated that approximately 1.45 million tonnes of rapeseed oil were processed into biodiesel in Germany in 2024, adding that this volume is roughly equivalent to the year's rapeseed harvest.
Take a moment to digest this. Germany’s entire rapeseed harvest was processed into biodiesel. Did this lead to a food vs fuel crisis? It should have but the harvest did lead to the production of rapeseed meal for dairy cattle so it's not all bad.
As the economic juggernaut of the European Union, Germany’s anti-palm oil stance has been used effectively to boost its agri-economy. In 2023, Germany exported $1.47B of Rapeseed Oil, making it the 3rd largest exporter of Rapeseed Oil.
This is super relevant to the EU’s commitments to reduce emissions in the transport sector where German biofuels are supposed to play a key role in the EU’s commitment to defossilize.
Germany's rapeseed output is a linchpin of the EU's renewable energy strategy. With 53.1% of the country's 3.6 million tonnes of biodiesel in 2024 derived from rapeseed oil, the crop is the primary feedstock for the industry. The EU's Renewable Energy Directive II (RED II), which excludes palm oil from greenhouse gas (GHG) reduction targets, has further entrenched rapeseed's dominance. Germany's biodiesel exports hit a record 3.2 million tonnes in 2024, driven by demand for cold-weather-compatible rapeseed methyl ester (RME) in northern EU countries.
The niggly problem here is that European rapeseed as virgin feedstock for biodiesel to meet the EU’s commitments to reduce transport emissions is not exactly clean. According to this report:
Taking into account higher N2O emissions due to fertilizer input as suggested by some researchers, German rapeseed biodiesel clearly fails to fulfil the 35 percent criterion required by the RED. Meanwhile, in no instance Polish or Romanian rapeseed biodiesel meet the RED's 35% GHG savings threshold. The assessment of the sustainability of rapeseed biodiesel heavily depends on the very production conditions and assumptions regarding the N2O field emissions. As a matter of fact, not every liter of rapeseed biodiesel produced in the EU is 'sustainable' in the sense of RED.
The fact that German rapeseed-biofuels does not qualify under RED is only the start of Germany’s failure to meet its commitments towards climate change.
The bigger problem for Europe is that Climate advocates have accused Germany of failing to decarbonize its transport sector and undermining the EU’s commitments to fight climate change.
A recent report compiled by a group of government advisors found that extensive subsidies are needed to clean up Germany's transport sector. However, clean transport advocates said the "half-hearted" proposals revealed a lack of courage to touch fossil fuel subsidies or limit the use of combustion engine technology
Climate advocates said the report underlined the urgent need to step up climate action. “If the federal government once again admits in its own climate protection report that key climate targets will be missed by a wide margin and yet fails to take effective immediate action, then this is no longer an oversight, but a total failure of climate policy,” said Jürgen Resch, head of environmental advocacy group DUH.
“Germany is not only jeopardising its own goals, but also undermining European commitments,” Resch said. He called on the government to implement an immediate strategy for reducing transport emissions, including introducing a speed limit on autobahns and threatening climate litigation if the government does not take action.
All these arguments over food vs fuel or the European Court of Auditors report on the EU’s failed biofuel policies prove that the European Commission’s policies on biofuels which favor rapeseed have been a green sham.
But abandoning the use of EU rapeseed as a first generation feedstock for biofuels as demanded by Transport & Environment would upend Germany’s rapeseed industry with no clear gains.
According to FEDIOL an NGO representing the interests of Europe’s vegetable oil industries warned that:
Abandoning the use of conventional biofuels will not divert rapeseed oil back to food use and prevent EU from importing oils.
There is no alternative market to the biodiesel outlet that has the same ability to swallow about 6 million tonnes of rapeseed oil, neither within the EU nor on global markets,
If biofuels is the only market to dump rapeseed in, one has to question whether the EU could be using agricultural land to produce food instead of biofuels.
In the overall debate over the use of biofuels and food, the US represents a good example of how food crops like soy and corn for biofuels hurt food supplies.
Based on data from the USDA, 95.2 million acres of corn was planted in the United States for 2025, up 5% from last year, according to the Acreage report released today. Soybean area planted is estimated at 83.4 million acres, down 4% from last year.
Half of the soy production will be used for biofuels according to Reuters.
As for US corn, a study by Cornell University shows U.S. corn growth for fuel – not food occupies 29.7 million acres.
That’s a lot of land that could be used to raise giant herds of grass-fed beef cattle or other food crops to feed the world according to Garth Brown from Cairncrest Farm.
This report from 2008 shows that the consumption of edible oils globally, whether for food or fuel, is so intertwined that a global shortage of soy leads to a short term demand for palm oil and vice versa.
Quoting the Malaysian Palm Oil Council’s findings::
“... extensive replacement of soybean with corn in the United States (US) and government’s policy in Europe to promote rapeseed oil as biofuels feedstock were the main reasons behind the shortage in soybean and rapeseed oil global market.”
Europe’s promotion of rapeseed oil as biofuels feedstock continues to this day where industry reports shows that:
In 2023, the EU cultivated approximately 6.2 million hectares of rapeseed, a 5.2% increase compared to the previous year. This expansion in area contributed to a slightly larger harvested production of 19.6 million tonnes, up from 19.4 million tonnes in 2022, according to Eurostat. France and Germany are leading producers within the EU, with France allocating around 1.27 million hectares and Germany 1.11 million hectares for rapeseed cultivation in 2025
The bottomline here in the food vs fuel argument is that US or EU agricultural lands would be better used sustainably to produce food instead of fuel and leave biofuel feedstock production to imports that use land more efficiently.
Palm oil to the rescue?
The use of palm oil to meet global needs for food and fuel is a no-brainer. Even India, a major force on the consumption of vegetable oils globally is pushing for more oil palm cultivation as it struggles with the food vs fuel problem.
Historical data shows that oil palm uses the least land to produce the most.
Yes, palm oil is widely recognized as the highest-yielding vegetable oil crop per unit of land. Compared to other major oil crops, oil palm plantations yield significantly more oil per hectare per year. For example, Malaysian Palm Oil Council (MPOC) says a hectare of oil palm can produce about 10 times more oil than a hectare of soybean. This high productivity makes palm oil a very efficient source of vegetable oil.
Palm oil, produced mainly in Indonesia and Malaysia, accounts for 35.5 percent of all the vegetable oil produced globally, making it the leader, topping soybean oil at 28.25 percent and rapeseed oil at 14.6 percent.
What makes this set of data remarkable is that palm oil cultivation globally accounts for only 28.96 million hectares compared to soybean oil at 136.89 million hectares or rapeseed at 43.45 million hectares.
Simply put in terms of the sustainability of crops, if soybean oil were to be replaced with palm oil, feeding the world would only need 13 million hectares more of oil palm to replace the 136.89 million hectares of soybean under cultivation.
That is something that reviews of the sustainability of palm oil for biodiesel should weigh heavily where “policies and land-use changes intersect with food and environmental systems in unique ways.”
The only “unique” thing about the study from Indra Purnama et al with its focus on Southeast Asian producers' policies on palm oil biodiesel is that it completely missed the fact that Indonesian and Malaysian palm oil plays a critical role in the global demand for food and sustainable energy.
Food vs fuel is a global crisis which needs expert analysis, not the superficial assessments of Indra Purnama or Transport & Environment. Palm oil wastes can be a source of sustainable biofuels but producing this clean green energy is expensive compared to fossil fuels.
This is why green energy producers like Straits Bio LNG have appealed to the marine transport sector to support the high costs of producing bio-LNG which does not compete with food supplies. This makes more sense than anything folks like Transport & Environment has to say.
It has taken the turmoil of Trump’s tariffs to stir up all the challenges to the global agricultural sectors to provide food and fuel for a sustainable future. Caught in the maelstrom of Trump's tariffs is the oft debated issue of palm oil and health which is rising to the surface under the controversial Make America Healthy Again campaign led by Robert F. Kennedy Jr.
This is creating a new tailwind in favor of palm oil as a healthier cooking oil as ubiquitous cooking oils like soy and canola are blamed for the health crisis in the USA.
Read MAHA Tailwinds for Palm Oil
Published August 2025 CSPO Watch
Update August 29, 2025
The Jakarta Globe reported that Indonesia is bracing for the EU to appeal the WTO's ruling on palm-based biodiesel exports from Indonesia.
The EU has until October 22, 2025 to make a decision on whether to accept the ruling or file an appeal.
At its peak in 2019, Indonesia exported 1.32 million kilolitres of biodiesel to the EU in 2019 which dropped dramatically when countervailing duties were put in place by the EU.
The WTO's ruling is clearly problematic for the EU in its protection of domestic seed oil industries but the bigger problem for the EU is whether it will face up to the fact that it has failed to decarbonize its transport sector as outlined below.
Read Trump's Tailwinds for the palm oil industry
Blame it on the EU Commission’s willingness to suck up to NGOs like Transport & Environment who are doing their darndest best to keep the EU hooked on fossil fuels.
In its latest campaign against palm oil, Transport & Environment zeroed in on biofuels from palm oil wastes and condemned it as fraudulent.
Is this a discussion we should be having when the European Union is failing its climate commitments?
Frenetic posts about food vs fuel shows the poor understanding of groups like Transport & Environment of how Europe should fit in the global trade for food and fuel.
Yes it's true that biofuels from virgin rapeseed and sunflower oils compete with food as Transport & Environment says but they also power European economies like Germany.
So what if Europe burns over 17,000 tonnes of rapeseed and sunflower oils every day? This greases the EU’s workhorse in Germany.
Germany is the largest producer of rapeseed based biodiesel in the EU according to Biofuels International.
2024 statistics from The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has stated that approximately 1.45 million tonnes of rapeseed oil were processed into biodiesel in Germany in 2024, adding that this volume is roughly equivalent to the year's rapeseed harvest.
Take a moment to digest this. Germany’s entire rapeseed harvest was processed into biodiesel. Did this lead to a food vs fuel crisis? It should have but the harvest did lead to the production of rapeseed meal for dairy cattle so it's not all bad.
As the economic juggernaut of the European Union, Germany’s anti-palm oil stance has been used effectively to boost its agri-economy. In 2023, Germany exported $1.47B of Rapeseed Oil, making it the 3rd largest exporter of Rapeseed Oil.
This is super relevant to the EU’s commitments to reduce emissions in the transport sector where German biofuels are supposed to play a key role in the EU’s commitment to defossilize.
Germany's rapeseed output is a linchpin of the EU's renewable energy strategy. With 53.1% of the country's 3.6 million tonnes of biodiesel in 2024 derived from rapeseed oil, the crop is the primary feedstock for the industry. The EU's Renewable Energy Directive II (RED II), which excludes palm oil from greenhouse gas (GHG) reduction targets, has further entrenched rapeseed's dominance. Germany's biodiesel exports hit a record 3.2 million tonnes in 2024, driven by demand for cold-weather-compatible rapeseed methyl ester (RME) in northern EU countries.
The niggly problem here is that European rapeseed as virgin feedstock for biodiesel to meet the EU’s commitments to reduce transport emissions is not exactly clean. According to this report:
Taking into account higher N2O emissions due to fertilizer input as suggested by some researchers, German rapeseed biodiesel clearly fails to fulfil the 35 percent criterion required by the RED. Meanwhile, in no instance Polish or Romanian rapeseed biodiesel meet the RED's 35% GHG savings threshold. The assessment of the sustainability of rapeseed biodiesel heavily depends on the very production conditions and assumptions regarding the N2O field emissions. As a matter of fact, not every liter of rapeseed biodiesel produced in the EU is 'sustainable' in the sense of RED.
The fact that German rapeseed-biofuels does not qualify under RED is only the start of Germany’s failure to meet its commitments towards climate change.
The bigger problem for Europe is that Climate advocates have accused Germany of failing to decarbonize its transport sector and undermining the EU’s commitments to fight climate change.
A recent report compiled by a group of government advisors found that extensive subsidies are needed to clean up Germany's transport sector. However, clean transport advocates said the "half-hearted" proposals revealed a lack of courage to touch fossil fuel subsidies or limit the use of combustion engine technology
Climate advocates said the report underlined the urgent need to step up climate action. “If the federal government once again admits in its own climate protection report that key climate targets will be missed by a wide margin and yet fails to take effective immediate action, then this is no longer an oversight, but a total failure of climate policy,” said Jürgen Resch, head of environmental advocacy group DUH.
“Germany is not only jeopardising its own goals, but also undermining European commitments,” Resch said. He called on the government to implement an immediate strategy for reducing transport emissions, including introducing a speed limit on autobahns and threatening climate litigation if the government does not take action.
All these arguments over food vs fuel or the European Court of Auditors report on the EU’s failed biofuel policies prove that the European Commission’s policies on biofuels which favor rapeseed have been a green sham.
But abandoning the use of EU rapeseed as a first generation feedstock for biofuels as demanded by Transport & Environment would upend Germany’s rapeseed industry with no clear gains.
According to FEDIOL an NGO representing the interests of Europe’s vegetable oil industries warned that:
Abandoning the use of conventional biofuels will not divert rapeseed oil back to food use and prevent EU from importing oils.
There is no alternative market to the biodiesel outlet that has the same ability to swallow about 6 million tonnes of rapeseed oil, neither within the EU nor on global markets,
If biofuels is the only market to dump rapeseed in, one has to question whether the EU could be using agricultural land to produce food instead of biofuels.
In the overall debate over the use of biofuels and food, the US represents a good example of how food crops like soy and corn for biofuels hurt food supplies.
Based on data from the USDA, 95.2 million acres of corn was planted in the United States for 2025, up 5% from last year, according to the Acreage report released today. Soybean area planted is estimated at 83.4 million acres, down 4% from last year.
Half of the soy production will be used for biofuels according to Reuters.
As for US corn, a study by Cornell University shows U.S. corn growth for fuel – not food occupies 29.7 million acres.
That’s a lot of land that could be used to raise giant herds of grass-fed beef cattle or other food crops to feed the world according to Garth Brown from Cairncrest Farm.
This report from 2008 shows that the consumption of edible oils globally, whether for food or fuel, is so intertwined that a global shortage of soy leads to a short term demand for palm oil and vice versa.
Quoting the Malaysian Palm Oil Council’s findings::
“... extensive replacement of soybean with corn in the United States (US) and government’s policy in Europe to promote rapeseed oil as biofuels feedstock were the main reasons behind the shortage in soybean and rapeseed oil global market.”
Europe’s promotion of rapeseed oil as biofuels feedstock continues to this day where industry reports shows that:
In 2023, the EU cultivated approximately 6.2 million hectares of rapeseed, a 5.2% increase compared to the previous year. This expansion in area contributed to a slightly larger harvested production of 19.6 million tonnes, up from 19.4 million tonnes in 2022, according to Eurostat. France and Germany are leading producers within the EU, with France allocating around 1.27 million hectares and Germany 1.11 million hectares for rapeseed cultivation in 2025
The bottomline here in the food vs fuel argument is that US or EU agricultural lands would be better used sustainably to produce food instead of fuel and leave biofuel feedstock production to imports that use land more efficiently.
Palm oil to the rescue?
The use of palm oil to meet global needs for food and fuel is a no-brainer. Even India, a major force on the consumption of vegetable oils globally is pushing for more oil palm cultivation as it struggles with the food vs fuel problem.
Historical data shows that oil palm uses the least land to produce the most.
Yes, palm oil is widely recognized as the highest-yielding vegetable oil crop per unit of land. Compared to other major oil crops, oil palm plantations yield significantly more oil per hectare per year. For example, Malaysian Palm Oil Council (MPOC) says a hectare of oil palm can produce about 10 times more oil than a hectare of soybean. This high productivity makes palm oil a very efficient source of vegetable oil.
Palm oil, produced mainly in Indonesia and Malaysia, accounts for 35.5 percent of all the vegetable oil produced globally, making it the leader, topping soybean oil at 28.25 percent and rapeseed oil at 14.6 percent.
What makes this set of data remarkable is that palm oil cultivation globally accounts for only 28.96 million hectares compared to soybean oil at 136.89 million hectares or rapeseed at 43.45 million hectares.
Simply put in terms of the sustainability of crops, if soybean oil were to be replaced with palm oil, feeding the world would only need 13 million hectares more of oil palm to replace the 136.89 million hectares of soybean under cultivation.
That is something that reviews of the sustainability of palm oil for biodiesel should weigh heavily where “policies and land-use changes intersect with food and environmental systems in unique ways.”
The only “unique” thing about the study from Indra Purnama et al with its focus on Southeast Asian producers' policies on palm oil biodiesel is that it completely missed the fact that Indonesian and Malaysian palm oil plays a critical role in the global demand for food and sustainable energy.
Food vs fuel is a global crisis which needs expert analysis, not the superficial assessments of Indra Purnama or Transport & Environment. Palm oil wastes can be a source of sustainable biofuels but producing this clean green energy is expensive compared to fossil fuels.
This is why green energy producers like Straits Bio LNG have appealed to the marine transport sector to support the high costs of producing bio-LNG which does not compete with food supplies. This makes more sense than anything folks like Transport & Environment has to say.
It has taken the turmoil of Trump’s tariffs to stir up all the challenges to the global agricultural sectors to provide food and fuel for a sustainable future. Caught in the maelstrom of Trump's tariffs is the oft debated issue of palm oil and health which is rising to the surface under the controversial Make America Healthy Again campaign led by Robert F. Kennedy Jr.
This is creating a new tailwind in favor of palm oil as a healthier cooking oil as ubiquitous cooking oils like soy and canola are blamed for the health crisis in the USA.
Read MAHA Tailwinds for Palm Oil
Published August 2025 CSPO Watch