Market evolution: Degras (CN 1522) — 2015–2025

Introduction

This report analyzes the trade flows of the European Union in products classified under customs code 1522 (Degras; residues resulting from the treatment of fatty substances or animal or vegetable waxes) between 2015 and 2025. The period witnessed a profound transformation in the EU's trade position. Starting from a state of near self-sufficiency with a small net trade deficit, the EU evolved into a major net importer with a trade deficit exceeding €650 million by 2025. This structural shift was driven by a massive surge in import volumes and values, primarily from Southeast Asia, coupled with a significant decline in the EU's export capacity. The analysis delves into the geographic reorientation of suppliers, the collapse of traditional export markets, and the resulting increase in the EU's external dependence and supply chain vulnerability for this niche product.

1. The Great Import Surge: Geographic Reorientation and Supplier Concentration

The most dramatic feature of the 2015–2025 period is the explosive growth in EU imports of degras. The total value of imports increased from €12.3 million in 2015 to €660.6 million in 2025, a staggering rise of over 5,265%. This section examines the drivers and geographic sources of this import boom.

Import volumes and values experienced an unprecedented increase

EU import quantities grew from 40,491 tonnes in 2015 to 634,939 tonnes in 2025. This 15-fold increase in volume, combined with a more than tripling of the unit price (from €304/t to €1,022/t), fueled the enormous value growth. The price escalation suggests a combination of increased global demand, possibly tighter supply from traditional sources, and a shift in the product mix towards higher-value grades or alternative feedstocks classified under this code. The general trade overview details this transformation.

The source of imports shifted decisively to Southeast Asia

The import boom was not evenly distributed globally. Traditional European suppliers were eclipsed by new, dominant players from Indonesia and Malaysia. The table below illustrates the radical change in the EU's top import partners.

Source: Top import partners by value

Indonesia became the paramount supplier, capturing over half of the EU's import value by 2025. Malaysia's growth from virtually zero to a €238 million trade flow is even more striking in percentage terms. This dramatic pivot strongly suggests the EU's industry is now reliant on palm oil-derived residues or similar tropical vegetable oil processing outputs from Southeast Asia, potentially replacing traditional European animal-fat based degras.

Import concentration moderated despite the dominance of key suppliers

The Herfindahl-Hirschman Index (HHI) for imports by value decreased by 19.1% from 5,807 to 4,699 between 2015 and 2025. While still indicating a highly concentrated market, the slight reduction points to some diversification beyond the top two suppliers, with countries like Argentina, Russia, and Tunisia increasing their shares. However, the concentration index remains elevated, confirming the market's structural dependence on a few key origins.

2. The Parallel Decline of EU Exports and Loss of Market Presence

While imports surged, EU exports of degras underwent a severe contraction, reversing the bloc's historical role in this market. This section explores the collapse in export volumes, the retreat from key markets, and the changing nature of the EU's production.

Export values and volumes fell by nearly 70%

EU export value fell from €2.4 million in 2015 to just €742,000 in 2025, a decline of 68.9%. The quantity exported fell even more sharply by 69.9%, from 8,156 tonnes to 2,451 tonnes. Notably, the average export price remained relatively stable (€293/t to €302/t), indicating the decline was not due to pricing but a fundamental reduction in the EU's competitive position or production of exportable degras. The general trade overview captures this trend.

Traditional export markets in Europe and Asia were largely abandoned

The decline was widespread across the EU's traditional export destinations. Markets in the UK, Türkiye, and Korea shrank dramatically. The table below shows the fate of the top export partners.

Source: Top export partners by value

The only major market to hold steady was Switzerland. The extreme volatility of exports to partners like Moldova and Norway highlights a fragmented, niche export trade that could not offset the loss of core markets.

EU production grew but did not support exports

Despite the collapse in exports, EU domestic production of degras increased. Production volume grew by 36.7% from 131.7 million kg in 2015 to 180 million kg in 2025, while production value grew by 151.5% to €55 million (Production Volumes). This indicates that the growing domestic output was entirely absorbed by the EU's internal market, which was simultaneously expanding its demand for imported material. The production growth was likely insufficient to meet this rising domestic demand, leading to the import surge.

3. Strategic Implications: Rising Vulnerability and Market Restructuring

The combined effect of soaring imports and falling exports has fundamentally altered the EU's strategic position in the global degras market. This section assesses the implications for supply security, market structure, and intra-EU specialization.

The EU has become critically dependent on net imports

The most significant strategic outcome is the EU's extreme and rapidly growing import dependency. The net import reliance (as a percentage of apparent consumption) skyrocketed from 2.0% in 2015 to 92.7% in 2025. Simultaneously, the trade intensity (the ratio of trade to production) jumped to 92.8%, confirming the market is now almost entirely shaped by international flows. The EU's export propensity collapsed to just 1.0%, cementing its status as a net consumer rather than a net producer in the global market.

Intra-EU specialization concentrates production in key member states

Analysis of 2025 specialization reveals a concentrated internal production structure. Romania, Spain, Portugal, Latvia, and the Netherlands show the highest Revealed Symmetric Comparative Advantage (RSCA) in degras production, with the Netherlands alone accounting for over 30% of EU output. Conversely, countries like Hungary, Finland, and Czechia have minimal or no specialization. This suggests production is clustered around specific industrial or agricultural processing hubs within the EU, making the bloc's overall supply chain reliant on both these internal clusters and the massive import inflows.

Supply chain risks are amplified by supplier volatility

The concentration of imports from Indonesia and Malaysia, combined with the high volatility observed in trade with some partners (e.g., coefficient of variation of 1.45 for Indonesia, 1.14 for Malaysia), presents a significant supply risk. Furthermore, the analysis detected price shock events, such as a major price abnormality for imports from Norway in 2021 and for exports to Switzerland in 2020. This volatility underscores the potential for sudden price spikes or supply disruptions in a market now heavily dependent on a narrow geographic base.

Conclusion

The decade from 2015 to 2025 saw the EU undergo a complete structural transformation in its degras (CN 1522) market. The EU evolved from a region with balanced trade to one suffering from a massive, €660 million net import deficit. This was driven by a 15-fold increase in import volumes, sourced overwhelmingly from Indonesia and Malaysia, which appears linked to a fundamental shift in feedstock sourcing towards Southeast Asian palm oil derivatives. Concurrently, EU exports collapsed as the bloc lost competitiveness in traditional markets.

While EU domestic production grew, it was overwhelmed by surging internal demand. The result is a market characterized by extreme external dependency (92.7% net import reliance), high supplier concentration, and latent supply chain vulnerabilities. The EU's degras market is no longer defined by its own production and export capacity, but by its demand and its ability to secure flows from a limited set of international suppliers. This shift carries significant implications for industrial planning and supply chain resilience in the sectors that consume this product.