Ethanol Blog

LINCOLN, Neb. (DTN) -- A decision by the European Commission on April 10, 2026, to phase out soybeans as a feedstock for biofuels by 2030 could have broader implications for U.S. agriculture, according to a new report from USDA's Foreign Agricultural Service this week.

The commission's proposed regulation to update its methodology for determining what it says is high indirect land use change (ILUC) risks associated with biofuels hasn't been finalized.

U.S. soybean exports to the European Union in 2025 were valued at $2.2 billion, according to USDA.

Since the EU imports about 90% of its soy for biodiesel from the U.S., Brazil and Argentina, if the update is adopted by the European Parliament and the European Council, it could affect U.S. soybean export demand.

With current rules, the European Commission defines high ILUC-risk feedstocks as feedstocks for which the share of expansion of the production into land with high-carbon feedstock is higher than 10% since 2008, with an annual expansion of more than 1%.

"Given the calculations of the commission in 2019, only palm oil fell under this definition," USDA-FAS said in its report.

"The use of high-risk ILUC biofuels, that can count toward the REDII renewable energy targets, were capped at the 2019 level through 2023 and are phased out until 2030."

USDA said with the new proposed rule, the commission is considering 2014 data instead of 2008.

"Under the new calculations both palm oil and soybeans fall under the definition of a high ILUC-risk feedstock for biofuel use and therefore will not be able to count toward the EU's targets for biofuel use by 2030," USDA said.

"This takes away incentives for using U.S. bean oil in biodiesel in Europe."

The EU's share of high-ILUC biofuels allowed in consumption of renewable energy would not be allowed to exceed 85.7% in 2024; 1.4% in 2025; 57.1% in 2026; 42.8% in 2027; 28.6% in 2028; 14.3% in 2029, and zero by 2030.

"The commission will assess whether it is appropriate to further specify the certification framework of low indirect land-use-change biofuels as regards the coverage of agricultural practices such as sequential cropping and intercropping, while preserving environmental safeguards," USDA-FAS said.

"The commission may also further examine the suitability of regional approaches in the scope of this regulation."

The regulation still must pass scrutiny from the parliament and the council, which typically takes two to four months.

Todd Neeley can be reached at todd.neeley@dtn.com

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