The Green Mirage: The EU’s Complex Relationship with Palm Oil Biodiesel in the Context of Environmental Narratives and Global Trade Dynamics

Abstract

In the early 2000s, biofuels like biodiesel and bioethanol were seen as renewable alternatives to petroleum, driven by rising crude oil prices and environmental concerns. Palm oil became a key biodiesel raw material, turning the European Union (EU) into a major importer. However, sustainable palm oil concerns emerged in the EU in 2014, leading to trade disputes and import restrictions, with a goal to phase out palm oil biodiesel by 2030. This research explores the EU’s palm oil biodiesel policy impact, focusing on key producers, EU imports (crude and refined palm oil, biodiesel), the EU’s role in the global biodiesel network, and alignment with a green narrative. Analyzing trade data, we find that, despite concerns, the EU has not significantly reduced palm oil-related imports, highlighting the market’s complex relationship to policy. This suggests that the EU’s commitment to environmentally sustainable economic development may not align with market stakeholders’ preferences, emphasizing the complex interdependencies between the global biodiesel market and policy areas like sustainability, economy, energy, and environment.