The European Commission has suspended Pakistan’s Generalised Scheme of Preferences Plus (GSP+) status for ethanol imports, effective June 20, 2025.
This decision follows a request made in May 2024 by six EU member states—France, Germany, Spain, Italy, Hungary, and Poland—who raised concerns that Pakistan’s ethanol exports had significantly disrupted the European Union’s ethanol market since 2022.
Under Article 30 of the GSP Regulation, which allows the Commission to take such actions, the suspension affects Pakistan’s ethanol exports, though fuel-grade ethanol is not included in the measure.
GSP+ status was initially granted to Pakistan in 2014 and extended until 2027, providing reduced-tariff or tariff-free access to the EU for various products. However, this preferential treatment is now halted for ethanol following complaints from European nations.
Pakistan, which is a major supplier of industrial-grade ethanol to Europe, does not export fuel-grade ethanol due to the lack of sustainability certifications required by the EU’s Renewable Energy Directive (RED). Market participants indicate that this certification issue has hampered ethanol’s eligibility for biofuel inclusion under the EU’s green energy goals.
Last year, ethanol imports from Pakistan accounted for more than a quarter of all non-fuel ethanol imports, making Pakistan the largest source of imports to the EU, the Commission said in its decision published in the EU’s Official Journal on Friday.
The rise in total ethanol imports has been lasting for several years with EU customs data showing imports of non-fuel ethanol into the EU nearly doubling between 2021 and 2024 to reach 726,000 tonnes in 2024, from about 376,000 tons in 2021, it said.
Of this, Pakistani ethanol imports jumped by almost 300 per cent to 393,590 tonnes between 2021 and 2022 and were still 244pc above 2021 imports in 2023.
The suspension is expected to impact Pakistan’s ethanol export market in the EU, with some suppliers already exploring alternative markets like Africa to compensate for the expected reduction in demand. The European renewable ethanol industry has raised concerns over the exclusion of fuel-grade ethanol, suggesting it could lead to loopholes that weaken the effectiveness of the safeguard.
