Renewable diesel consumption in Germany increases sharply

Hydrotreated vegetable oil (HVO), also known as renewable diesel, defines the sales trend for incorporation in diesel blends in Germany.

At approximately 205,000 metric tons, HVO use increased significantly compared with the same period the previous year.

According to the Union zur Förderung von Oel- und Proteinpflanzen e. V. (UFOP), the reasons are the raising of the greenhouse-gas (GHG) quota obligation from 10.6 percent in 2025 to 12 percent in 2026, the retrospective elimination as of Jan. 1, 2026, of the double counting of biofuels derived from certain waste-based feedstock, and the provision that quota obligations from the obligation-years 2025 and 2026 may not be met by using over-fulfilments from the respective previous year.

The main reason given by UFOP, however, is the statutory blending-rate limit of 7 percent under the diesel standard.

According to information from Germany’s Federal Office for Economic Affairs and Export Control (BAFA), the amount of biodiesel consumed in May remained virtually unchanged from the previous month at 263,600 tons, while rising almost 39 percent year-on-year.

At the same time, the use of HVO rose sharply, amounting to 270,700 tons in the first five months of the running year and significantly exceeding the previous year’s 64,900 tons.

Consumption of diesel totaled approximately 2.4 million tons, representing a 16 percent increase on the previous month.

The blending quota of biodiesel including HVO was 9.3 percent, up 2 percent from the year-earlier period.

At 11.3 percent, it had reached a two-digit figure for the first time in April.

Under the diesel-fuel standard, the biodiesel quota is limited to a maximum of 7 percent.

UFOP has estimated that, extrapolated linearly over the calendar year, HVO consumption would reach approximately 650,000 tons and biodiesel consumption 2.05 million tons.

Looking ahead to the 2027 quota year, however, UFOP has pointed out that the trend in consumption may not continue in the same way.

The quota obligation will rise sharply, by 5.5 percent to 17.5 percent, under the revised GHG-reduction quota legislation.

However, the petroleum companies that are subject to quota obligations can use any unused GHG-reduction quotas for offsetting purposes.

UFOP expects the increased quotas to offset these quota volumes, meaning that physical demand will remain at its 2026 level.

This had been the political aim of bringing forward the raise of quota obligations for 2027 (to 17.5 percent) and 2028 (to 19.5 percent) as called for by the biofuels associations and approved by the Bundestag.