European Waste Feedstock Markets Stabilize as Trade Woes Persist

After some recent ups and downs, waste feedstock prices in Europe have begun to stabilize. This comes on the back of a modest recovery in the UCOME (Used Cooking Oil Methyl Ester) market, which has already started to ease pressure on producer margins.

Despite this rebound, many European feedstock buyers remain cautious about what’s to come. They are consequently holding off on new purchases as they anticipate further price declines in the coming weeks.

A Divided Market Between Fuels and Feedstocks

According to a report from Prima CarbonZero’s Green Diesel Report, this current market environment reflects a deeper disparity between fuel and feedstock fundamentals across Europe.

Green diesel and finished fuels have faced increasingly complex trade barriers in recent months. However, raw feedstock flows remained relatively unimpeded—at least for now.

New tariffs, particularly those targeting finished biofuels like HVO (Hydrotreated Vegetable Oil), are constraining fuel imports. Yet feedstock flows are largely affected only by Indonesia’s export restrictions and the growing scrutiny around the sustainability of European supply chains.

Trade Wars and the Shift in Feedstock Flows

At the center of the shifting feedstock landscape are rising trade tensions between the US and China. This geopolitical standoff is reshaping global trade patterns.

With the US recently imposing significant tariff hikes on Chinese UCO (Used Cooking Oil), Europe is now expected to receive a wave of Chinese feedstock. This could substantially boost European supply in the coming months.

At the same time, aggressive US tariffs across other global partners may incentivize Indonesia to lift its current export ban on waste feedstocks.

The country is facing mounting pressure to secure alternative sources of foreign revenue. Their answer to that pressure is to potentially reopen trade routes.

If the three-month export ban is lifted, it would increase supply-side flexibility for European buyers. The result would place further downward pressure on prices.

Strengthening Biofuel Demand in Europe

While feedstock supply pressures grow, demand fundamentals remain robust. Year-on-year, European biofuel demand is stronger. This uptick comes as bulk imports from China have been largely shut out by anti-dumping measures introduced last year.

Read More: EU Anti-Dumping Ruling on China Marks Serious Shift in Biofuels Market

The UK, for its part, is in the middle of an ongoing investigation into Chinese biodiesel and subsidized US HVO. Both of which have recently dominated the UK waste-based fuel market.

Read More: UK Launches Anti-Dumping Probe on Chinese Biodiesel Exports

This investigation, launched in June 2024, may result in provisional duties that further restrict access for non-European biofuel imports. With this regulatory window likely narrowing, the flow of Chinese biodiesel into the UK could soon slow significantly. The consequence is a potential tightening of supply, pushing up demand for European-sourced alternatives.

Waste-Based Fuels and Marine Decarbonisation

Looking further ahead, the International Maritime Organization (IMO) recently concluded meetings in London with a new framework that will increase the use of waste-based biofuels in marine decarbonization efforts. This shift could further absorb excess supply and drive long-term demand growth, especially for waste-derived fuels that meet strict emissions criteria.

Global Macro Signals: Bearish for Asia, Uncertain for the US

In broader macro markets, signals are mixed. Southeast Asia is seeing falling palm oil exports coupled with rising inventories, sending bearish signals for waste feedstock replacements across the region.

Across the pond in the US, soybean oil prices continue to rise despite weak domestic biofuel margins. Additionally, Chinese import restrictions have all but shut down US soybean exports for the time being.

Now largely cut off from the Chinese market, the US soybean sector is turning inward. Domestic crush rates are falling, but there’s hope on the horizon. Expectations are building around a potential new RFS2 (Renewable Fuel Standard) proposal in late April or early May that could strengthen demand for soy-based biofuels domestically.

Outlook: Markets are Volatile, but Evolving

Overall, Europe’s waste-based feedstock market is entering a period of dynamic tension.

On one side, a surge in supply from Asia and possibly Indonesia threatens to drive prices further down. On the other, rising regulatory barriers and solid biofuel demand—particularly from the marine and UK markets—could tighten availability and support prices.

With macroeconomic uncertainty and global trade tensions acting as wild cards, market participants will need to remain agile. This will require closely monitoring policy decisions and trade developments and developing strategies in-line with any updates.

How Can Market Intelligence Help in Times of Uncertainty?

Current global markets have all rested on one very challenging element: volatility. In short, making strategic decisions in times like this is incredibly difficult.

Trusting in expert market intelligence and analyst insights is key to making informed decisions based aimed at your business success. Count on Prima CarbonZero from ResourceWise to help.

Our market intelligence platform includes everything you need to stay afloat during periods of confusion and global market disruption.

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Simply stated, our market intelligence can help make a considerable difference in your company’s decision-making and success potential. Get in touch with our team to learn more about all the ways we can help.