European Parliament blocks soy classification that threatened Argentina’s biodiesel exports

The European Parliament voted 388 to 248 on July 8, 2026, to reject delegated act 2026/2680, which would have classified soy oil as high-risk for indirect land use change (ILUC) under Regulation 2019/807. The measure required 361 votes for absolute majority in the 720-seat chamber. The rejection prevents soy oil from being excluded as an eligible feedstock for renewable energy targets, blocking a change that would have progressively closed European markets to Argentine biodiesel by 2030.

Argentina supplied 97 percent of its total biodiesel exports to the European Union between 2018 and 2025, according to the Rosario Board of Trade. In 2025 alone, the EU received 100 percent of Argentine biodiesel exports, totaling approximately 280,000 tonnes valued at $350 million, plus 45,000 tonnes of soy oil for industrial use worth $50 million. The proposed classification would have eliminated soy oil from renewable energy quota calculations used by European petroleum companies.

The European Commission must now redraft the regulation following parliamentary guidelines that align with technical positions presented by Argentina. Foreign Minister Pablo Quirno stated the decision resulted from coordinated work between the Foreign Ministry, Agriculture Secretariat, private sector, and provincial governments that presented technical reports demonstrating soy sustainability. The Argentine Oilseed Industry Chamber (CIARA) president Gustavo Idígoras confirmed a delegation will meet with EU officials in Brussels on July 16 to negotiate new regulatory terms.

Argentina ranks as the world’s largest soy oil exporter, second-largest soymeal exporter, and fifth-largest soybean exporter. The soy complex generated $21.44 billion in exports during 2025, representing the country’s largest agro-export sector. The Rural Society of Argentina described the original proposal as a trade barrier without scientific foundation, stating evidence-based criteria strengthen fair and predictable commerce.

The parliamentary objection does not establish permanent market access but creates conditions for Argentina to negotiate recognition of its soy production as sustainable. CIARA indicated discussions will focus on securing soy’s viability as a biofuel feedstock in Europe for 30 years, though the Commission retains authority to propose revised classifications under modified technical criteria.