Its key benefits include reducing greenhouse gas emissions (35–90% lower than fossil fuels), better lubricity, renewability, safe transport, and support for agriculture and job creation.

EU legislation requires reductions in transport emissions, limits the share of first-generation biofuels to 7%, and promotes advanced biofuels made from waste and agricultural residues. In Croatia, regulation is divided among several ministries, and the National Action Plan sets production incentives and obliges fuel distributors to place biodiesel on the market. However, the current penalty system makes it cheaper for distributors to pay fines than to purchase and blend biodiesel, undermining domestic production.

Germany and Italy provide examples of effective penalty systems that enforce compliance. AmCham recommends aligning Croatia’s penalty formula with best EU practices, strengthening monitoring and collection, to foster agricultural and industrial development, reduce emissions, and improve waste management.