Market evolution: Technical palm oil (CN 15111010) — 2015–2025

Introduction

This report examines the evolution of EU trade in crude palm oil destined for technical or industrial uses (CN 15111010) over the period 2015–2025. This product category — which excludes palm oil used in foodstuffs — covers applications such as biodiesel feedstock, oleochemicals, and other industrial processes. Over the decade under review, the EU market for this commodity has undergone a profound transformation. Import volumes have contracted by over 94 %, trade values have collapsed, unit prices have nearly doubled, and the EU's sourcing geography has shifted. At the same time, EU domestic production has grown by 40 %, yet the bloc remains overwhelmingly dependent on external suppliers. Understanding these dynamics is essential for policymakers, traders, and industrial users alike, as they reflect the combined impact of regulatory change, sustainability pressures, and global commodity market shifts.

Scope & Definitions

1. The Dramatic Contraction of EU Industrial Palm Oil Trade

The single most striking feature of the 2015–2025 period is the sheer scale of the decline in EU imports of technical crude palm oil. What was once a multi-billion-euro trade flow has been reduced to a fraction of its former volume.

Import volumes and values have collapsed

Between 2015 and 2025, EU import quantities fell from 2,841,474 tonnes to just 165,730 tonnes — a decline of 94.2 %. In value terms, imports dropped from €1.75 billion to €191 million, a fall of 89.1 %. The trade balance, deeply in deficit throughout the period, narrowed from approximately −€1.75 billion to −€191 million, reflecting the sheer contraction of inward flows rather than any meaningful improvement in the EU's competitive position.

Trade overview

EU Member States have retreated across the board

The decline is not concentrated in a single Member State; it is structural and widespread. The Netherlands, the EU's largest importer (and a major hub for palm oil processing and re-export via Rotterdam), saw its imports fall from €786 million to €125 million (−84.0 %). Spain experienced a drop from €421 million to €49 million (−88.3 %). But the most dramatic collapses occurred in Italy and Denmark, both of which saw their imports virtually eliminated — declining by 99.9 % each. Germany's imports fell by 96.5 %, France's by 80.1 %, and Belgium's by 82.2 %.

EU Member State importers

Regulatory headwinds are the most plausible driver

While the data alone cannot establish causation, the timing and scale of the contraction strongly align with EU policy developments. The recast of the Renewable Energy Directive (RED II, adopted in 2018) introduced a cap on biofuel feedstocks with high indirect land-use change (ILUC) risk — a category that explicitly includes palm oil — with a phase-out target of 2030. Member States began implementing blending limits and national phase-outs well before that date. Combined with growing corporate sustainability pledges and reputational risks around deforestation, these regulatory signals effectively curtailed industrial demand for imported crude palm oil across the EU.

2. Rising Prices, Shifting Suppliers, and Supply-Side Shocks

Against the backdrop of collapsing volumes, the unit price of imported technical crude palm oil nearly doubled over the decade. This price escalation, together with notable shifts in supplier geography and episodes of acute price volatility, paints a picture of a market under structural and cyclical stress.

Unit prices have risen sharply

The average import unit price increased from €616 per tonne in 2015 to €1,153 per tonne in 2025, a rise of 87.1 %. Export prices rose even more dramatically — from €680/t to €2,750/t (+304.7 %) — though EU export volumes are negligible (just 25 tonnes in 2025) and likely reflect small, irregular shipments rather than a meaningful commercial flow. The import price increase likely reflects a combination of global palm oil price inflation (driven by supply disruptions, biofuel mandates in producing countries, and tighter environmental regulation) and a compositional shift toward fewer, potentially higher-cost suppliers.

The supplier base has shifted geographically

Indonesia and Malaysia remain the EU's two largest suppliers by far, but their dominance has evolved in different ways. Indonesia's exports to the EU fell from €1.08 billion to €63 million (−94.2 %), mirroring the overall market contraction. Malaysia's decline was less steep in relative terms (−82.8 %, from €631 million to €109 million), allowing it to gain relative market share. Among secondary suppliers, the most notable change is Colombia, whose exports to the EU surged from €3.4 million to €10.3 million — an increase of 206.7 %. Gabon also increased its share (+40.6 %). Meanwhile, Central American suppliers Honduras (−78.8 %) and Guatemala (−75.3 %) declined significantly, as did Brazil (−90.0 %).

Top import partners

Import concentration has moderated, but remains high

The Herfindahl-Hirschman Index (HHI) for EU imports by value declined from 5,117 to 4,337 (−15.2 %). While this suggests a modest diversification of supply sources, the HHI remains well above the 2,500 threshold typically associated with a highly concentrated market. Indonesia and Malaysia together still account for the vast majority of import value. Export concentration also declined (from 9,051 to 5,201 by value), though this reflects the collapse of already-minimal EU export flows rather than meaningful diversification.

Detected price shocks underscore market fragility

The volatility and shock detection analysis identified three significant events:

1. Indonesia, 2021 (imports): An import price shock with an abnormality score of 8.4 and a price shift of +88.0 %. Given that Indonesia accounted for 52.6 % of import value at the time, this event had systemic significance. It likely reflects the global palm oil price spike of 2021, driven by post-pandemic demand recovery, labour shortages in Malaysian plantations, and Indonesia's domestic biodiesel blending mandates (B30/B40) reducing exportable supply.

2. Costa Rica, 2021 (imports): A price shock with abnormality 10.4 and a +62.7 % shift, though Costa Rica's share of total import value was just 0.1 %, limiting its systemic impact.

3. Switzerland, 2023 (exports): An export price shock with an abnormality of 30.4 — the most extreme event detected — and a +385.8 % price shift. With a 7.3 % share of export value, this likely reflects a one-off or small-volume shipment at an unusually high price rather than a sustainable commercial trend.

Brazil and Papua New Guinea also exhibited the highest coefficient of variation (CV) among import partners (1.24 and 1.01 respectively), indicating persistent price instability from these sources.

Volatility analysis

3. Domestic Production Growth and the Limits of Import Substitution

While the import story is one of decline, the data also reveal a countervailing trend: EU domestic production of technical crude palm oil has increased. Yet this growth has been far from sufficient to offset the collapse in imports, and the EU remains overwhelmingly reliant on external suppliers.

EU production has grown meaningfully

According to production data, EU production of crude palm oil for technical uses rose from 100 million kg (2015) to 140 million kg (2025), an increase of 40 %. In value terms, production grew from €80 million to €120 million (+50 %). This growth, while modest in absolute terms compared to the import decline (the EU imported 2,841,000 tonnes — or 284 million kg — in 2015 alone), suggests some degree of industrial adaptation, possibly through increased domestic oilseed crushing, recycled oils, or alternative feedstocks classified under the same CN code.

The Netherlands remains the EU's dominant hub

Specialisation data for 2025 confirms the Netherlands' unique position in this market. With a Revealed Symmetric Comparative Advantage (RSCA) of 0.74 and an RCA of 6.62, the Netherlands is by far the most specialised EU Member State in technical palm oil. It accounts for 96.1 % of EU production in this category, though this represents only 14.5 % of the Netherlands' total trade in the broader product group. All other Member States show negative RSCA values, indicating no comparative advantage — Belgium (RSCA −0.46) is a distant second. This concentration underscores the Netherlands' role as both a processing hub and the primary entry point for palm oil into the EU.

Net import reliance remains stubbornly high

Despite the collapse in import volumes, the EU's net import reliance has barely budged: from 96.8 % in 2015 to 94.4 % in 2025. This means that even after a 94 % reduction in imports, the EU still sources nearly all of its technical palm oil from abroad. The explanation lies in the simultaneous decline of both imports and domestic production's absolute scale: while production grew by 40 million kg, imports fell by approximately 2,676 million kg. Domestic output, at 140 million kg, covers only a small fraction of residual demand.

Trade intensity remained very high at 95.3 %, confirming that this is a market fundamentally shaped by international trade flows. Interestingly, the EU's export propensity rose from 10.1 % to 15.4 % (+52.9 %), though in absolute terms EU exports remain negligible (25 tonnes in 2025). The increase likely reflects relative scaling effects as the overall market contracted.

Conclusion

The EU market for technical crude palm oil (CN 15111010) has undergone a fundamental transformation between 2015 and 2025. Import volumes have collapsed by 94 %, falling from 2.84 million tonnes to under 166,000 tonnes, and import values have declined by 89 %. This contraction, which accelerated from 2018 onwards, is almost certainly linked to the EU's policy framework — in particular the RED II directive's cap on high-ILUC-risk biofuel feedstocks and broader sustainability mandates.

At the same time, unit import prices have risen by 87 %, reflecting global commodity dynamics and a tightening supply environment. Price shocks — notably from Indonesia in 2021 — have added volatility to a market already under structural pressure. The supplier base has narrowed, with Indonesia and Malaysia retaining dominance but at far lower volumes, while Colombia and Gabon have emerged as relatively more important secondary sources.

EU domestic production has grown by 40 %, concentrated almost entirely in the Netherlands, but remains far too small to meaningfully reduce the bloc's 94.4 % net import reliance. The paradox is clear: the EU has dramatically reduced its consumption of technical palm oil, yet for whatever volume it still uses, it remains almost entirely dependent on imports. Looking ahead, the continued implementation of EU deforestation and sustainability regulations, combined with the 2030 RED II phase-out deadline, is likely to drive further contraction — though the pace and ultimate floor of this decline will depend on the availability of technically viable and economically competitive alternatives.