European Union Concludes Palm and Soy Biofuels Are Not Environmentally Sustainable Alternatives

The European Commission has reaffirmed that biofuels derived from palm oil and soy do not provide genuine environmental benefits when the impacts of indirect land use change are taken into account. According to a recent report published by the EU executive, the greenhouse gas emissions linked to the agricultural expansion of these crops on high-carbon stock lands negate the potential CO2 savings from their use as fuel substitutes.

Published on 20 January 2026, the report updates the scientific basis underpinning the European Union s delegated regulation on indirect land use change (ILUC). It bolsters the technical foundation supporting the EU policy on biofuels by incorporating new global statistical data alongside advanced cartographic analysis. The findings confirm that both palm oil and soy meet the criteria for being high-risk feedstocks regarding ILUC. Their expansion is closely associated with the conversion of forests, rainforests, and peatlands, reflecting a direct linkage to deforestation and ecosystem degradation.

The report highlights that a considerable proportion of recent palm oil expansion, particularly in Southeast Asia, has occurred over tropical peatlands. This expansion generates high levels of persistent emissions due to the significant carbon stored in these ecosystems. In the case of soy, scientific evidence points to an indirect expansion pattern primarily in South America, where pasture and other agricultural uses displace native forests, leading to further deforestation.

Consequently, the European Commission concludes that the emissions from land use change associated with these crops offset, or even surpass, the greenhouse gas savings achievable through their substitution for fossil fuels. This climate balance is ultimately negative, which challenges their effectiveness as tools for decarbonisation within the EU. The findings strengthen the EU s strategy to progressively reduce, until their abolition in 2030, the contribution of high-risk ILUC biofuels to renewable energy targets in transport.

Moreover, the report confirms the EU regulatory framework s direction towards adopting lower-impact technologies. These include advanced biofuels, fuels produced from waste, and renewable non-biological fuels. The European Commission views this evidence as validation of its approach, with only limited technical adjustments needed to ensure environmental integrity and policy coherence in achieving Europe s decarbonisation goals.