Charlene Trading
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What changed in biodiesel rules in 2026 in Europe and the United States

Obligations went up, and at the same time the rules on what counts, where it comes from and who checks it got tighter.

· Charlene Trading

European Union: RED III, one country at a time

The Renewable Energy Directive (RED III) gives each country two options for 2030: cut the greenhouse-gas intensity of transport fuel by 14.5%, or reach a 29% renewable share. Within that, advanced biofuels and renewable fuels of non-biological origin (green hydrogen and e-fuels) must add up to 5.5%. Fuels from Annex IX Part B, which covers used cooking oil and some animal fats, stay capped at 1.7% of transport energy unless the Commission approves more for a country. Crop-based fuels are capped at each country’s 2020 share plus one point, never above 7%. Palm goes to zero by 2030.

The deadline to write the directive into national law passed in May 2025 and few countries met it. In April 2026 the Commission took Greece, Malta and Portugal to the EU Court of Justice, and it sent further warnings to Cyprus in June and Croatia on 1 October. In practice the national rules decide, and several large markets changed theirs this year.

Germany

The Bundestag and Bundesrat passed the new GHG quota law in April and May, in force since 7 June. The quota follows this path:

Year2026202720282029203020312032203320342035
Quota12%17.5%19.5%22.5%26.5%30%33%36%38%41%

It keeps rising to 65% in 2040. Double counting ends from 2026, though contract protection means the full effect arrives in 2027. The cap for waste-based Part B fuels drops from 1.9% to 1.7%. Fuel from palm residues (POME) no longer counts, and UCO and Category 3 animal fat can no longer be co-processed in refineries and counted. A fuel only counts if government inspectors may audit the supply chain on site. Surplus quota from 2025 and 2026 cannot be carried over. The penalty is €0.60 per kg of CO2 equivalent.

Other countries

The Netherlands replaced its HBE certificates with a new system, the ERE, on 1 January 2026. The land-transport target is 14.4% in 2026 and 27.1% in 2030. Double counting is gone, Category 3 animal fat counts at half value, and shipping has its own obligations.

France keeps its TIRUERT tax in 2026 and moved its replacement, IRICC, to January 2027. Spain raised its 2026 target from 12% to 14% and moves to a GHG-intensity system from 2027 under Royal Decree 611/2026. Italy put RED III into force in February, with a 12.6% obligation for 2026. Sweden kept its reduction obligation at 10% and dropped the plan to abolish it in 2027.

Soy stays in, for now

In April the Commission adopted an act classifying soy as a high indirect land-use change (ILUC) crop, the same category as palm. That would have phased soy-based biofuels down to zero by 2030. On 8 July the European Parliament rejected it by 388 votes to 248. USDA does not expect a new, region-by-region proposal before 2027. The EU uses little soybean oil for biofuel (USDA expects about 350,000 t in 2026, half of 2025), but the vote matters to South American exporters planning beyond 2027.

Duties and traceability

Anti-dumping duties of 10% to 35.6% on Chinese biodiesel and HVO have applied since February 2025 for five years, with SAF excluded. Chinese FAME imports fell almost to zero. The EU renewed countervailing duties on Argentine biodiesel (25% to 33.4%) in May 2025 and on Indonesian biodiesel (8% to 18%) in March 2026. Reviews of the measures on US product opened in July 2026. The EU-Mercosur agreement has applied provisionally since 1 May 2026.

The Union Database, which tracks each batch from collection point to pump, has been running since 2024 but is still not mandatory for operators. A new rule requires an importer declaration for UCO containing animal material from 19 November 2027. The deforestation regulation (EUDR) applies to large and medium companies from 30 December 2026 and covers soy and palm. The carbon price on transport fuel (ETS2) moved to 2028. The Commission is due to propose the post-2030 framework before the end of the year; a leaked draft suggests dropping the transport-specific targets, which is not confirmed.

United States

The final RFS rule raised biomass-based diesel volumes. It also postponed to 2028 or later the plan to give imported fuel, and fuel made from foreign feedstock, half a RIN. From 2027 renewable diesel earns 1.5 RINs per gallon instead of 1.7, the same as biodiesel, unless the producer petitions for more. In August EPA exempted 1.76 bn RINs of 2025 obligations for small refineries and promised to propose how to reallocate the gap before the end of October.

Tax policy moved the other way. The One Big Beautiful Bill Act extended the 45Z clean fuel credit to 2029, but from 2026 only fuel made from US, Canadian or Mexican feedstock qualifies. It also removed indirect land-use change from the carbon scores, which helps soybean and canola oil, and cut SAF’s maximum credit from $1.75 to $1.00 a gallon. Treasury published proposed regulations in February 2026, and final rules were still out in early October. The $1-a-gallon blenders credit expired at the end of 2024 and has not been renewed.

California’s Low Carbon Fuel Standard limits credits for crop-based diesel, soybean oil included, to 20% of each company’s volume from 2028, and requires third-party sustainability certification from the same year. Credits traded at about $82 a tonne in early October. Tariffs changed several times: the Supreme Court struck down the emergency tariffs in February, a temporary surcharge expired in July, and a 12.5% Section 301 tariff now applies to 46 countries including China. The combined rate now applied to Chinese UCO is not confirmed.

South America

Argentina cut export duties by Decree 423/2026 in June. Soybean oil goes from 18-22% today to 11-14% by the end of 2028. Press reports say biodiesel exports pay no duty from 2027; we could not find that in the text of the decree. Brazil removed imported biodiesel from its mandate in July. Paraguay’s new law allows blends of 5% to 20%. The country moved to B8-B10 in July, and the farm union announced a return to B7 until year-end that has not been published yet.

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