By: Manuel Benito, Senior Commodity Trader at Viroque Energy Switzerland
With more than twelve years in commodity trading, spanning fossil fuels, agricultural products, and more recently biofuels and waste-based feedstocks, I now trade from Geneva at the intersection of regulation, supply chain reality, and market structure. From the desk of Viroque Energy Switzerland —a company of the Viroque Energy group, led by our CEO and founder, Joaquín Valcarce Lledó— the view is one of a market
in structural transition: regulation accelerating, supply chains under pressure, and an operational complexity that models are still catching up to.
“This is where I work every day. Here’s what that looks like up close”.
THE REGULATORY FRAMEWORK: WHERE WE ARE
In November 2023, the EU formally adopted Directive RED III (2023/2413/EU), mandating that by 2030 at least 5.5% of all energy consumed in European transport come from advanced biofuels, specifically Annex IX-A feedstocks: waste and residue-based streams such as agricultural residues, algae, and certain industrial by-products. This sub-mandate is ring-fenced: conventional biofuels and Annex IX-B feedstocks cannot be used to meet it.
At the same time, FuelEU Maritime Regulation (2023/1805/EU), in force since 1 January 2025, requires large vessels calling at EU ports to cut GHG intensity by 6% by 2030 and 80% by 2050 against a 2020 baseline. In the 2025–2034 window, before electro-fuels can scale, drop-in biofuels such as HVO and advanced biodiesel remain the most accessible compliance pathway for the maritime sector. DNV’s Energy Transition Outlook projects a significant rise in biofuel demand from European shipping by 2030 as a direct consequence.
“These are binding legal obligations, with defined timelines and real regulatory consequences for non-compliance”.
WHAT THE MARKET CAN DELIVER AND WHAT ACTUALLY COUNTS
This is where real-world trading diverges from the regulatory narrative. European HVO production has grown significantly in recent years, with Europe now the world’s largest HVO producer, according to the IEA Renewables 2024 report. Yet to meet RED III’s 5.5% advanced biofuels sub-mandate, industry and European Commission impact assessments estimate that EU production volumes will need to grow four to five times over current levels by 2030.
“That is the scale of the challenge, and the scale of the opportunity for those who move with the right foundations”.
The feedstock side is where the market gets more complex, and where a key regulatory shift is often misunderstood. Used Cooking Oil (UCO) was the dominant feedstock for HVO production under RED II, where a double-counting mechanism made it especially attractive toward renewable energy targets. Under RED III, that framework has changed materially: double counting has been replaced by a tiered system in which only Annex IX-A feedstocks count toward the binding 5.5% advanced biofuels sub-mandate. UCO, classified under Annex IX-B, no longer qualifies as an advanced biofuel under this definition. It remains a significant feedstock for conventional renewable fuel obligations, but its regulatory premium has been substantially reduced.
This reclassification has intensified competition for certified Annex IX-A supply and added a new layer of complexity to feedstock sourcing strategies across the industry. Meanwhile, Europe’s domestic supply of qualifying feedstocks remains structurally constrained, reinforcing import dependency and the traceability challenges that come with it.
THE COMPLIANCE LAYER MOST ANALYSTS OVERLOOK
As the regulatory framework has tightened, so has scrutiny on the feedstocks that underpin it.
The European Commission has progressively strengthened chain-of-custody and traceability requirements across the biofuels supply chain, a direct response to rapid market growth and the increasing complexity of international feedstock sourcing.
In practical terms, a biofuel cargo only counts toward a member state’s mandatory targets under RED III if it carries full, auditable certification under an EU-recognised scheme. ISCC EU is the dominant framework in Europe, requiring documented proof of origin, sustainability compliance, and an unbroken chain of custody from feedstock to final delivery. A single gap in that documentation renders the cargo legally equivalent to fossil fuel for compliance purposes.
Accessing certified feedstock supply chains, and sustaining the documentation standards they require, is not straightforward. It demands established supplier relationships, certified traceability systems, and the operational depth to hold those standards under audit, year after year. That combination of certified access and operational expertise is what separates companies that can reliably deliver compliant volumes from those that cannot, and it isn’t something that can be replicated quickly.
“That is the standard Viroque Energy Switzerland is built to meet, and the standard we bring to every relationship we build in this market”.
WHAT I SEE FROM THE TRADING DESK
From my position at Viroque Energy Switzerland, I trade at the intersection of regulation and the real market: negotiating volumes, managing certification chains, evaluating feedstock origins across Latin America, Europe and beyond, and tracking the price signals Argus and ICIS report each week.
At Viroque Energy, ISCC EU certification and traceability protocols are embedded in every operation, from origin documentation through to delivery. In a market where documentation standards are increasingly tied to regulatory value, that operational discipline shapes the relationships we build with counterparties and partners.
The companies and institutions that will define this market won’t simply be the fastest to move. They’ll be the ones with the most reliable operational foundation: full chain-of-custody traceability, certified feedstock sourcing, and the accumulated expertise to navigate an increasingly demanding compliance environment.
