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Germany has significantly increased its consumption of hydrotreated vegetable oil (HVO) for biofuel production, a direct result of updated national greenhouse gas emission reduction mandates. In the first five months of 2026, HVO uptake reached approximately 270.7 thousand tons, a sharp rise compared to the 64.9 thousand tons consumed throughout the entire year of 2025.
This substantial increase is primarily attributed to a rise in the mandatory CO₂ emission reduction quota, which escalated from 10.6% to 12% effective January 1st. Concurrently, Germany implemented policy changes, including the cessation of double counting benefits for certain waste-based biofuels and restrictions on the application of surplus emission reduction credits accumulated in prior years towards 2025–2026 obligations.
Parallel to the HVO surge, consumption of conventional biodiesel also remained robust. In May alone, it hit 263.6 thousand tons, marking an almost 39% increase year-on-year. The combined share of both biodiesel and HVO within total diesel fuel consumption rose to 9.3% from approximately 7.3% a year earlier, peaking at 11.3% in April.
According to projections from Germany's Union for the Promotion of Oil and Protein Plants (UFOP), HVO consumption is anticipated to reach around 650 thousand tons by the end of 2026, while conventional biodiesel usage could total 2.05 million tons. However, UFOP highlights that further expansion in the use of bio-components is currently limited by existing technical specifications for diesel fuel.
Looking ahead, the emission reduction quota is slated for a considerable jump to 17.5% in 2027 and further to 19.5% in 2028. Despite these escalating targets, UFOP does not foresee a proportionate surge in the physical demand for vegetable-based bio-components. This is because fuel companies are expected to leverage previously accumulated unused credits. Consequently, actual consumption levels for HVO and biodiesel are projected to largely stabilize around 2026 figures. Source: UkrAgroConsult