The Palm Oil Black Box

EU trade loopholes

Tracking the overall trade in oil palm is complex due to its many derivatives, products and uses. Many of the trade codes used at an international level are not specific to oil palm and multiple codes can be used for similar products, making trade opaque.

EIA analysed some of the key trade codes relating to oil palm. Imports into the EU have seen a shift away from raw palm oil to other oil palm-related products.

Notably, there has been an increase in the imports of so-called oil palm waste and residue products used to make biofuels, including palm oil mill effluent (POME), palm fatty acid distillate (PFAD) and used cooking oil (UCO).
Such products are incentivised by the EU Renewable Energy Directive (RED) as they can be exempt from its sustainability criteria and can be double-counted towards renewable energy targets.

The EU Deforestation Regulation (EUDR) comes into effect at the end of 2025 and will require companies to conduct due diligence to ensure six commodities (cattle, cocoa, coffee, oil palm, soy and timber) are legal and deforestationfree. However, it only regulates certain products made from these commodities by their international trade codes – known as Harmonised System (HS) codes.

There has been a decline in EU imports of the oil palm HS codes regulated under the EUDR. This decrease is partially mitigated by the increase in imports of oil palm products utilised for biofuels. The EUDR does not currently regulate biodiesel made from oil palm placed on the EU market, nor all of the other oil palm products that can be used to make biofuels.