Palm Oil and the EUDR

An Essential Ingredient Under the Spotlight: The Future of Palm Oil Facing the EUDR Challenge

Europe is considered the world leader in the consumption of sustainable palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO), representing 45% of global CSPO consumption. According to data published by the European Sustainable Palm Oil (ESPO, 2018), 74% of palm oil used by the European food industry is RSPO certified, and more than 90% of the palm oil used in food, feed, and oleochemicals is certified as sustainable. Approximately 56% of the total is directed to energy, mainly biofuels.

Its uses include:
• Food: snacks, baked goods, margarines, chocolates, and ice cream.
• Personal care & cosmetics: soaps, shampoos, creams, lotions.
• Pharmaceuticals: as an excipient or base for many medical and therapeutic products.
• Industry & energy: lubricants, surfactants, and biodiesel.

Thanks to its yield — up to 10 times more oil per hectare than other oilseeds —, low cost, and ease of processing, palm oil has become an essential input in multiple global value chains.

The EUDR: A New Requirement for Sustainable Supply Chains

In 2023, the European Union approved the Regulation on Deforestation-Free Products (EUDR), requiring that palm oil and its derivatives must not come from land deforested after December 31, 2020.

Companies must comply with three key requirements:

1. Full geolocated traceability: from the plot of origin to the point of commercialization in Europe.

2. Due diligence: robust systems to assess, mitigate, and document risks of deforestation and environmental degradation.

3. Transparency: covering all intermediaries, transporters, importers, and traders in the chain.

This regulation represents a profound shift, aiming to protect key ecosystems, prevent biodiversity loss, and reduce emissions from land-use change. It also drives deep transformation in agricultural, industrial, and commercial practices — from plantations to European shelves — fostering more responsible global supply chains.

Substituting Palm Oil? Sounds Good… But Is It Viable?

It’s a valid question, and many are asking it. Yes, palm oil can theoretically be replaced, but the costs are high — economically, socially, and environmentally.

• Economic: Alternatives like soy or coconut require more land, more resources, and can be 10% to 100% more expensive (IUCN, 2018). According to Grease Connections (May 2025 prices), palm oil costs about $907 per ton, while soy, canola, and sunflower oils exceed $1,200. Domestically, palm oil is 30–50% cheaper than other vegetable oils, directly impacting household budgets. Replacing it in margarines or soaps is not simple: it requires reformulation, industrial adjustments, and consumer acceptance.

• Social: Millions of people rely on this crop for their livelihoods, especially in Asia. A poorly managed replacement could leave smallholders without income or support.

• Environmental: Paradoxically, replacing palm oil could increase ecosystem pressure. Between 4 and 10 times more land would be needed to match its yield, potentially leading to deforestation elsewhere. For example, the water footprint of olive oil exceeds 14,500 m³ per ton, compared to 3,800–5,000 m³ for palm oil.

So, What’s the Way Forward?

The key is not eliminating palm oil, but transforming how it is produced and traded. Sustainable, traceable, deforestation-free sourcing — combined with transparency, innovation, and diversification (e.g., recycled oils, emerging technologies) — is the most effective and coherent path.

According to the IUCN (2024), meeting all global demand for vegetable oils with palm alone would require 83 million new hectares of tropical land. Doing so with soy would require 446 million hectares — 311 million more than today’s 125 million. This would lead to excessive chemical use and reduced nutritional diversity for society.

Encouragingly, over 45% of sustainable certified palm oil (CSPO) is already consumed in Europe. This proves that moving toward more responsible supply chains is possible.

The EUDR as a Catalyst for Global Change

The EUDR drives more transparent and fair supply chains. For companies, it represents a real opportunity to lead with purpose, strengthen reputation, and secure access to the European market.

This type of regulation also triggers necessary conversations: between procurement and sustainability, between logistics and compliance, between Europe and producing regions. That is the real change. And it is already happening.