EU Tightens Rules on UCO Imports: Implications for the Biofuels Market

The European Union is tightening its grip on the biofuels supply chain.

With the formal adoption of Regulation (EU) 2025/2181, the European Commission is introducing stricter import conditions for used cooking oil (UCO) destined for biofuel production. The move will help to reshape the sector’s sourcing strategies and transparency standards.

The regulation comes following a two-year transition period to give industry stakeholders time to adapt. But even before it takes effect, its implications are already impacting global UCO trade.

A New Era of Traceability

At the heart of the new regulation is a clear message: traceability is non-negotiable.

All imported UCO will now have to originate from approved or registered establishments or plants in the exporting country, backed by a fully documented chain of custody. This includes initial collection and processing all the way to delivery.

The requirements mark a significant evolution from the EU’s earlier 2023 framework, which established import rules but stopped short of embedding them into the EU’s animal by-product legislation.

By aligning the new requirements with Regulation (EU) 2019/1666, importers will need to maintain detailed records that identify:

• The processing or production establishment
• The handling and packaging unit
• The transport route

These layers of documentation form a verifiable audit trail. They enable EU authorities to monitor UCO flows in real time and flag any irregularities more effectively.

Closing the Loopholes

Fraud and mislabeling have long been a challenge within the UCO market. Reports of virgin oils being falsely declared as used cooking oil, particularly from regions such as China and Southeast Asia, have raised questions about the authenticity of imports. Accordingly, this also raises questions about the true climate value of the resulting biofuels.

By tightening its oversight, the Commission aims to safeguard the credibility of UCO-based biofuels within the EU’s broader decarbonization framework. The measure connects with the European Green Deal and the Renewable Energy Directive (RED II), reinforcing the principle that sustainable fuels must deliver verifiable emissions reductions, not just theoretical ones.

A central feature of the regulation is its reaffirmation of the ban on mixing UCO with other oils or fats. The rule was first introduced in 2023 but is now paired with stricter enforcement and centralized reporting mechanisms. Together, these changes are designed to make fraudulent blending and misclassification much more difficult to conceal.

Short-Term Strain, Long-Term Stability

For EU biofuel producers, the immediate outlook is mixed.

On one hand, tighter controls promise a more transparent and equitable biofuels market, where compliant operators are no longer undercut by dubious imports. On the other hand, the adjustment period could be bumpy, especially for smaller producers or traders reliant on spot-market imports.

The new traceability burden may squeeze supply in the near term as overseas suppliers scramble to meet the EU’s documentation standards. Some smaller or less-integrated firms might struggle to verify the origins of their feedstock quickly enough to remain competitive.

In contrast, vertically integrated producers, such as those with long-term sourcing contracts and in-house auditing systems, are likely to emerge stronger. With greater transparency and regulatory clarity, these firms can secure stable supply lines and build trust with both regulators and customers.

Two Years to Prepare with Enforcement in 2027

Recognizing the scale of the change, the European Commission has built in a two-year transition period before enforcement begins in late 2027. This window is designed to allow companies to:

• Upgrade traceability and data systems
• Train staff on new compliance requirements
• Establish verified sourcing partnerships with approved UCO collectors and processors abroad

The transitional phase also signals the EU’s broader commitment to cleaning up renewable energy supply chains. This effort extends beyond UCO to encompass waste-based and advanced biofuels more generally.

A Step Toward Credible Carbon Savings

Ultimately, the regulation underscores a central tenet of the EU’s decarbonization agenda: not all “green” fuels are created equal. Genuine greenhouse gas savings depend on credible sourcing and transparent verification.

By embedding UCO imports within a rigorous traceability framework, Brussels is sending a message to global markets. Sustainability claims must be earned, not assumed. For the biofuels industry, the next two years will be a test of both adaptability and integrity in achieving these aims.

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In the eBook From Feedstocks to Fuel, we dig into the full value chain, from the feedstocks (UCO, animal fats, agricultural residues) to how they become low-carbon fuels for aviation, shipping (bio-bunkering) and heavy transport.

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