As of 20 June 2025, the European Commission has suspended Pakistan’s GSP+ trade privileges for non-fuel ethanol imports. The decision introduces new tariffs, between €129 and €243 per tonne, depending on product classification, for ethanol previously entering the EU market duty-free.
This change stems from growing concern within the EU over market disruption caused by rising volumes of low-cost Pakistani ethanol. Between 2021 and 2024, imports from Pakistan nearly tripled, peaking at over 393,000 tonnes. The majority of these imports competed in the non-fuel ethanol sector, including ethanol used in cosmetics, pharmaceuticals, food, and industrial applications.
What triggered the suspension?
According to the European Commission’s formal assessment (Regulation EU 2025/1206), the sharp rise in Pakistani imports:
- Undercut EU producers by ~25% in price,
- Contributed to a 19% drop in EU ethanol production between 2021 and 2023,
- And led to loss of market share for EU-based producers.
The decision was triggered by a formal request from six Member States, including Germany, France, and Spain, citing “serious disturbance” in the non-fuel ethanol market. While other exporters (like the U.S. and Guatemala) were also mentioned, only Pakistan benefited from GSP+ status, giving it tariff-free access and a distinct price advantage.
What’s excluded?
The fuel ethanol market is not affected. Ethanol meeting the EU’s sustainability criteria under the Renewable Energy Directive, typically used for blending in transport, remains outside the scope of this suspension.
What does this mean for the market?
For importers, traders, and buyers across the EU, this move is likely to trigger:
- Price adjustments for Pakistani-origin ethanol,
- A shift in demand toward alternative suppliers, and
- Renewed focus on compliance, cost efficiency, and origin diversification.
Pakistan will remain subject to these new tariffs for two years, after which the EU may revisit the decision depending on how the market evolves.
At Nedstar
As a global sourcing partner in ethanol and bulk spirits, we continue to monitor developments that impact trade flows, sourcing strategy, and compliance requirements.
If you’d like to understand how this update might affect your supply chain, or if you’re looking to diversify suppliers in light of these changes, feel free to get in touch. We’re happy to help.
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23-06-2025
