Europe leads the world in the use of biodiesel, accounting for more than half of world biodiesel consumption. Biodiesel is commonly used in low concentration blends with petroleum products, such as B5 (5% biodiesel) or B20 (20%), although pure biodiesel (B100) is also widely available in several countries, particularly Germany. Blends of up to 5% are permitted with the EN590 mineral diesel specification across Europe and do not need to be labelled.

The EU is expected to remain the dominant market for biodiesel for many years. A 2003 EU directive stipulating that biofuels were to comprise 2% of all transport fuels on the market in 2005, raised the target to 5.75% in 2010 and there are proposals to increase this mandate to 10% by 2020.

However, the EU’s production capacity is unlikely to be able to expand rapidly enough to meet projected demand over the next few years, implying the need to import a significant portion of its biodiesel from other areas (Chart 4). Currently, the EU imposes a 6.5% duty on imported biodiesel, but developing nations are expected to offer a significant cost advantage over European producers as a result of lower feedstock and conversion costs.