T&E study: Renewable diesel sold by oil majors ‘most likely contains fraudulent palm oil’

A key ingredient for the renewable diesel sold in Europe is likely fraudulent, according to a new study by the European Federation for Transport and Environment (T&E).

Nearly twice as much palm-oil mill effluent (POME), a residue of palm-oil production, is being used for European biofuels than is available globally.

There needs to be stronger policy restrictions and dedicated incentives for POME biofuels should be removed to avoid “waste” biofuels simply being palm oil in disguise, T&E said.

Oil companies are offering a renewable diesel product dubbed hydrotreated vegetable oil (HVO), which T&E said “on paper” delivers significant emissions savings—in some cases up to 95 percent.

A key component of this is POME, a watery sludge that is produced during palm-oil production.

POME may have accounted for a quarter of all HVO biofuels consumed in the EU in 2023.

Officially, over 2 million metric tons of POME oil were consumed in European biofuels in 2023.

This is way above the 1 million tons that is estimated to be available globally, while T&E’s calculations show that actual collection of POME oil is likely much lower in practice.

Conventional palm-oil use in biofuels peaked at around 3 million tons in 2019 before falling 80 percent by the end of 2023.

This is in large part due to the EU’s decision to phase out palm-oil biofuels from renewable targets by 2030.

Meanwhile, waste-based alternatives like used cooking oil, animal fats and residues such as POME are taking its place, now making up 40 percent of EU biofuels.

There is concern that palm oil is simply entering Europe under a different name, T&E warned.

“It appears a lot of POME could be just palm oil in disguise,” said Cian Delaney with T&E. “This raises serious concerns as to whether this renewable diesel or HVO is as green as oil majors say it is. We need to remove the policy incentives that enable dodgy biofuels feedstocks making their way into Europe as supposedly sustainable fuels.”

Spain, Italy, the U.K. and Germany were Europe’s biggest consumers of POME in 2023.

A third of Spanish biofuels came from POME, while Italy relied on it for nearly 20 percent.

Germany’s POME consumption quadrupled between 2021 and 2022 but stayed steady in 2023, despite rising imports and falling biofuel prices.

The rapid increase in POME-biofuels use in the EU has led to POME prices reaching nearly 90 percent of palm-oil prices by mid-2024, suggesting that a reclassification of POME from residue to byproduct may be needed if its value continues to rise, T&E said.

European oil majors spent 2-billion euros (USD$2.27 billion) on POME in 2023.

In January, the Indonesian government published data showing that exports of POME in 2023 and 2024 far exceeded the Indonesian government’s estimate of total capacity.