European biofuel sector could face feedstock supply shortage – Oils & Fats International

Report on the U.S.-China Trade Dispute and its Implications for Sustainable Development Goals

Introduction: Trade Tensions and Global Sustainability

A proposed restriction on U.S. imports of cooking oil from China, announced on October 15, 2025, has caused significant market volatility, notably boosting the stock of Bunge Global SA (NYSE: BG). This development, part of an escalating trade conflict, carries profound implications beyond market dynamics, directly impacting several United Nations Sustainable Development Goals (SDGs). This report analyzes the event through the lens of the SDGs, focusing on food security, clean energy, responsible production, and global partnerships.

Impact on Food Security and Sustainable Agriculture

Threats to SDG 2 (Zero Hunger)

The trade conflict poses a direct threat to the stability of global food systems and the livelihoods of agricultural producers, undermining progress toward SDG 2.

• Farmer Livelihoods: China’s cessation of U.S. soybean purchases has driven domestic prices below production costs, creating severe economic hardship for American farmers. This instability threatens the viability of farming communities, a key component of sustainable agriculture.
• Global Food Supply Chains: The dispute forces a realignment of global commodity flows. While Brazil and Argentina have increased exports to China, this shift creates market inefficiencies and price volatility that can affect food affordability and access in other nations.
• Food vs. Fuel Debate: Increased domestic demand for soybean oil as a biofuel feedstock, exacerbated by the restriction on imported used cooking oil (UCO), intensifies competition for agricultural outputs. This dynamic can contribute to food price inflation, challenging the goal of ensuring access to safe, nutritious, and sufficient food.

Challenges for Clean Energy and Climate Action

Implications for SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action)

The restriction on UCO imports directly affects the renewable fuels sector, a critical component of strategies to achieve clean energy and climate goals.

1. Feedstock Scarcity: UCO is a low-carbon intensity feedstock for biofuels like renewable diesel. Limiting its import tightens supply, increases costs for biofuel producers, and potentially slows the transition to cleaner transportation fuels, hindering progress on SDG 7 and SDG 13.
2. Supply Chain Disruption: The U.S. became a net importer of UCO to meet demand from its burgeoning biofuel industry. The policy disrupts an established supply chain for a key circular economy product, forcing a scramble for alternative, potentially less sustainable, feedstocks.
3. Policy Coherence: The trade action creates a conflict between nationalistic trade policy and environmental objectives. While policies like the Inflation Reduction Act support clean fuel production, protectionist measures that limit access to sustainable feedstocks can undermine their effectiveness.

Corporate Responsibility and Industrial Innovation

Navigating SDG 9 (Industry, Innovation, and Infrastructure) and SDG 12 (Responsible Consumption and Production)

The trade policy shift creates distinct winners and losers in the corporate sector, forcing strategic re-evaluation focused on domestic infrastructure and supply chain resilience.

Corporate Beneficiaries

• Bunge Global SA (BG) and Archer Daniels Midland (ADM): These agribusinesses are positioned to benefit from increased demand for domestically crushed soybean oil. This may spur investment in U.S. processing infrastructure, aligning with SDG 9 by promoting inclusive and sustainable industrialization.

Industry-Wide Challenges

• Responsible Production (SDG 12): The disruption in the trade of UCO—a recycled waste product—highlights the fragility of global circular economies. Hindering the flow of waste-based feedstocks challenges the principles of responsible consumption and production.
• Resilient Infrastructure: The event underscores the need for greater investment in domestic UCO collection and processing infrastructure to build a more resilient and self-sufficient supply chain for the renewable fuels industry.

Erosion of Global Partnerships

Setbacks for SDG 17 (Partnerships for the Goals)

The escalating “tit-for-tat” nature of the U.S.-China trade conflict represents a significant departure from the collaborative spirit required to achieve the Sustainable Development Goals.

• Decline in Multilateralism: The use of tariffs and import restrictions as economic weapons undermines global trade rules and partnerships, fostering an environment of instability and distrust.
• Fragmented Global Markets: The conflict encourages economic decoupling and the formation of regional trade blocs. This fragmentation can impede the global cooperation necessary to address complex challenges like climate change, food security, and sustainable energy.
• Supply Chain Reorientation: The long-term impact will be a fundamental restructuring of global supply chains, prioritizing national security over efficiency. This shift could increase costs and reduce access to essential goods, disproportionately affecting developing nations and undermining the global partnership envisioned in SDG 17.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 2: Zero Hunger
   • The article highlights the financial strain on U.S. farmers due to China ceasing purchases of American soybeans. It explicitly states that “U.S. soybean prices were reportedly below production costs” and that farmers were experiencing “hardship,” which directly relates to the economic viability of food producers and the stability of food production systems. The “food vs. fuel” debate mentioned also connects to food security.
2. SDG 7: Affordable and Clean Energy
   • A central theme is the U.S. renewable fuels industry and its “insatiable demand” for feedstocks like used cooking oil (UCO) and soybean oil. The article discusses the role of biofuels in the energy mix, government incentives like the Renewable Fuel Standard (RFS), and how trade policies impact the supply chain for producing cleaner energy.
3. SDG 8: Decent Work and Economic Growth
   • The article details significant economic impacts, including market volatility where “U.S. market capitalization reportedly shedding $450 billion within minutes.” It discusses the fortunes of major corporations, the financial distress of the agricultural sector, and the potential for “job creation and economic growth in rural areas” through the expansion of the domestic oilseed sector. This all relates to economic stability, productivity, and growth.
4. SDG 12: Responsible Consumption and Production
   • The focus on Used Cooking Oil (UCO) as a key commodity directly relates to this goal. UCO is a waste product being repurposed as a valuable feedstock for biofuel, which is a clear example of recycling and reuse to create a more circular economy and reduce waste. The article discusses the global supply chains for this recycled product.
5. SDG 17: Partnerships for the Goals
   • The entire article is a case study of the breakdown of international trade partnerships. It describes the “protracted U.S.-China trade dispute,” the use of tariffs as an “economic weapon,” the imposition of trade barriers, and the resulting “fragmented future for global commodities.” This is the antithesis of the stable, rules-based global trading system promoted by SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 2 (Zero Hunger):
   • Target 2.3: Double the agricultural productivity and incomes of small-scale food producers. The article addresses this target negatively, showing how the trade war harms the income of U.S. farmers, with soybean prices falling “below production costs.”
   • Target 2.c: Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and help limit extreme food price volatility. The article directly discusses the failure to meet this target, citing “intensified price fluctuations,” “sustained volatility,” and an “unpredictable market environment” for global edible oils.
2. Under SDG 7 (Affordable and Clean Energy):
   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix. The article’s focus on the “burgeoning U.S. biofuel industry” and its robust demand for feedstocks to produce renewable diesel and biodiesel directly relates to efforts to achieve this target.
3. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article points to the need for the U.S. to “bolster its domestic oilseed crushing and UCO collection infrastructure” and “invest in new processing facilities and innovation in feedstock development” as a response to the trade disruption.
4. Under SDG 12 (Responsible Consumption and Production):
   • Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse. The entire discussion around UCO as a feedstock for the biofuel industry is an example of this target in action, where a waste product is recycled and reused on a massive scale.
5. Under SDG 17 (Partnerships for the Goals):
   • Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system. The article describes actions that directly undermine this target, such as the threat to impose “100% tariffs on all Chinese imports” and the “tit-for-tat” nature of the trade conflict.
   • Target 17.13: Enhance global macroeconomic stability, including through policy coordination and policy coherence. The article illustrates a lack of policy coordination, leading to “heightened market volatility” and a significant “reshaping of global supply chains,” which destabilizes the macroeconomic environment.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For SDG 2 (Zero Hunger):
   • Indicator 2.c.1 (Indicator of food price anomalies): The article explicitly mentions “intensified price fluctuations” and “exacerbate price volatility in global edible oil markets,” which are direct qualitative measures of this indicator. The statement that “U.S. soybean prices were reportedly below production costs” is a clear sign of a market anomaly.
2. For SDG 7 (Affordable and Clean Energy):
   • Indicator 7.2.1 (Renewable energy share in the total final energy consumption): This is implied by the discussion of the “robust demand from the biofuel sector” and government policies like the Renewable Fuel Standard (RFS), which sets targets for biofuel consumption, directly impacting this share.
3. For SDG 8 (Decent Work and Economic Growth):
   • Indicator 8.1.1 (Annual growth rate of real GDP per capita): The article provides a short-term, negative indicator related to economic health by stating that “U.S. market capitalization reportedly shedding $450 billion within minutes, and the S&P 500 briefly turning negative” following the trade threat.
4. For SDG 12 (Responsible Consumption and Production):
   • Indicator 12.5.1 (National recycling rate, tons of material recycled): A specific data point is provided that relates to the volume of recycled material (UCO) being traded: “Chinese UCO exports to the U.S. had already sharply declined by 65% in the first eight months of 2025.”
5. For SDG 17 (Partnerships for the Goals):
   • Indicator 17.10.1 (Worldwide weighted tariff-average): The article is replete with examples of tariffs, which are the primary measure for this indicator. It mentions the “critical 25% tariff on U.S. soybeans” and the threat of “100% tariffs on all Chinese imports.”
   • Indicator 17.11.1 (Developing countries’ and least developed countries’ share of global exports): The article provides a direct measure of a shift in global export shares, stating that “the U.S. share of China’s soybean imports had plummeted from 40% to a mere 18%, with Brazil and Argentina emerging as primary beneficiaries.”

4. Summary Table of Findings

Source: markets.financialcontent.com