Readying for the EUDR: A Hot Topic in the Oleochemicals Industry

The hot topic – seemingly, the only topic – at the recent Palm & Lauric Oils Price Outlook Conference (POC) in Kuala Lumpur was the upcoming introduction of the EUDR. The EUDR is the European Union Deforestation Regulation. What was apparent from the discussions with many customers and suppliers of oleochemical products was that there was a wide range of awareness and also interpretation of what EUDR-specific implementation actually means.

Here’s a simple summary of the conditions that the EUDR requires a product to fulfill to be compliant:

• Deforestation free – The geolocation data of the origin feedstock has to be provided for every transaction and no mixing with noncompliant products is allowed at any step of the supply chain.

• Legally produced – Produced in compliance with laws of the origin country including, for example, rights to use the area as palm plantations.

• Covered by a due-diligence confirmation – A formal statement submitted in the EU Information System.
  
  

From the current industry dialogue, there appears to be the need for producers to source and use segregated lauric oil, actions that have significant implications for supply and operations. One of the main logistical considerations is how to manage and segregate the old material and the new, EUDR-compliant material in manufacturing plants and intermediate and finished product tanks.

While we welcome the drive toward greater traceability to plantation for both palm and palm kernel oil, we recognise that additional clarity on interpretation of the rules will be helpful. Our P&G Chemicals experts are focused on complying with the EUDR as written and understood today, while continuing to monitor diligently for any related developments. Our primary objective is to ensure all of our customers have compliant materials, when and where needed. While the specifics of some of the executional details are being finalized, we have a solid plan to comply and deliver.

Customers ask why we are so confident in our ability to meet the requirements of the regulation. My answer is simple – we have no choice. P&G has a multibillion-dollar business that is relying upon our ability to be fully compliant on time. This means all other customers for our high-quality oleochemical solutions have the potential to benefit as we put the full power of P&G behind addressing this important initiative and law.

Ongoing debates on the implementation, timing and rules can make life more uncertain and challenging for industry professionals. This makes focus and intentionality even more important and therefore, unless EU regulators provide a different direction, we will continue to centre on the goal to be 100% EUDR compliant by 30 December 2024. We look forward to engaging further with our customers as necessary to understand how best to meet their evolving needs in light of this new law.