European Snapshot from the Argus Biofuels Analytics July 2025
Biofuels demand
Global biofuels policy is undergoing a major recalibration as governments respond to economic pressures and climate goals by prioritising domestic feedstocks and tightening sustainability standards.
European biofuels demand is forecast to grow by 10pc to 30.6bn l in 2025. The rise in consumption is driven by SAF mandates coming into force and by rising HVO consumption. Without including SAF, road biofuels demand is expected to grow by 5pc in 2025. We forecast biofuels demand to rise another 10pc to 33.7bn l in 2026, driven by countries’ RED III transpositions putting mandates on a trajectory to meet 2030 targets. By 2030, we expect biofuels demand to reach close to 49bn l.
Germany’s proposal to remove double-counting is set to double Renewable Diesel/HVO demand in 2026, while France’s less ambitious targets could dampen growth. Our modelling shows how these legislative shifts will reshape market dynamics across the continent - and what it means for fuel suppliers, traders and refiners.
Biofuels supply
Europe’s combined Renewable Diesel and SAF capacity is projected to reach 6.3mn t in 2025, with 0.7mn t currently under construction and commercial trials. Two recent project start-ups were Preem’s 950,000 t/yr Synsat facility in Lysekil, Sweden, and TotalEnergies’ 25,000 t/yr co-processing plant in Gonfreville, France, both starting operation in June.
We estimate 16,200t of capacity additions may be delayed to next year because of a lack of progress updates. Europe’s SAF capacity is projected to reach 2.4mn t in 2025, marking a 17pc increase over 2024, additions coming from France, Spain, and the Netherlands.
With RED III mandates accelerating demand, the region is heading toward a 10mn t supply deficit by 2030. The latest Argus Biofuels Analytics data reveals which technologies and regions are best positioned to fill the gap.
Biofuels feedstocks
Biofuels markets across the globe are entering a period of structural transformation as expanding mandates and stricter sustainability criteria drive a shift toward domestic and waste-based feedstocks. Europe is phasing out palm oil and soybean oil in favour of rapeseed oil, UCO and other waste feedstocks, with mandates expanding into aviation and maritime sectors.
European Part B feedstock demand is expected to remain flat at 6.7mn t in 2025, with UCO continuing to dominate supply. Although US policy changes have freed up more UCO for Europe, availability is forecast to tighten by 2030 as Asian markets retain more for domestic use and aviation demand begins to rise. Argus Biofuels Analytics tracks feedstock flows, policy impacts and price trends - allowing you to anticipate shifts before they impact margins.
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