✪ Member briefing

EU-LATAM mega-deal opens vast market for biofuels

What does that mean to the biogas sector?

On 17 January 2026, the European Union and Mercosur trade bloc countries, Argentina, Brazil, Paraguay and Uruguay, signed the EU-Mercosur Partnership Agreement (EMPA) and Interim Trade Agreement (iTA), creating one of the largest intercontinental trade frameworks, serving over 700 million people.

The EU is Mercosur’s second-largest trading partner in goods (€57 billion in 2024) and services (€29 billion in 2023), and its largest foreign investor (€390 billion in 2023), but market barriers have historically constrained trade and investment. Under negotiation for over 25 years, the adoption of EMPA represents the EU’s ‘new, pragmatic foreign and economic policy’.

The agreements aim to boost trade and investment, reduce tariff and non-tariff barriers, and provide stable, predictable rules while promoting sustainability, climate action and responsible business conduct. For the bioenergy sector, they create opportunities to scale up biofuels and biogas production, accelerate technology transfer and integrate low-carbon, residue-based energy systems into trade flows, making renewable energy both a commercial and strategic priority.

Aligned with the EU–Mercosur agreement, an enhanced EU–Mexico trade deal has been negotiated in parallel, creating a coordinated Latin American trade strategy that opens opportunities for biofuels, renewable energy technologies, and sustainable investment across the region.

Here, WBA policy analysts consider what this means for the biogas sector.