The EU Deforestation Regulation establishes strict rules for palm oil entering the European market. Companies that fail to comply face severe penalties, up to 4 % of their total EU turnover. With enforcement beginning 30 December 2025, palm oil operators must act quickly to adapt their supply chains.
The cut-off date for deforestation under the EUDR is 31 December 2020. Any palm oil produced on land deforested after this date cannot be imported into EU markets.
The regulation blocks products linked to deforestation or those produced in violation of local laws. Palm oil operators cannot place non-compliant products on EU markets under any circumstances.
This guide provides a straightforward overview of EUDR requirements for palm oil operators. It outlines practical steps to protect your EU market access while maintaining sustainable practices throughout your supply chain.
1. EUDR requirements for compliant palm oil
Palm must be sourced from land that has not undergone deforestation since 31 December 2020.
Under the EUDR, every shipment of palm must be fully traceable back to its exact cultivation site. This can be verified through geographic coordinates or detailed mapping, ensuring that no deforestation has occurred after the official cut-off date. Importantly, this requirement applies to all producers and suppliers, regardless of business size.
The regulation also distinguishes between two categories of companies: operators and traders.
- An operator is the business that first places palm products on the EU market, either as an importer or as the initial seller within the EU.
- A trader refers to any company that purchases or resells these products after their initial entry into the market.
Both categories are legally obliged to conduct due diligence and to submit a due diligence statement through the EU’s centralised information system before proceeding with their activities.
2. Which palm products and derivatives (HS codes) are subject to EUDR
The European Union’s Deforestation Regulation (EUDR) applies to a wide range of palm products, from from crude oil to processed derivatives, ensuring that all palm placed on the EU market meets strict criteria for deforestation-free and legally produced goods. This includes crude palm oil, palm kernel oil, palm kernel expeller and cake, stearin, olein, and refined fractions, as well as food and non-food preparations containing palm ingredients. Operators and traders must demonstrate full traceability and compliance for these specified product categories in order to meet the regulation’s requirements.
The following HS codes apply:
- 1207 10 - Palm nuts and kernels
- 1511 - Palm oil and its fractions, whether or not refined, but not chemically modified
- 1513 21 - Crude palm kernel and babassu oil and fractions thereof, whether or not refined, but not chemically modified
- 1513 29 - Palm kernel and babassu oil and their fractions, whether or not refined, but not chemically modified (excluding crude oil)
- 2306 60 - Oilcake and other solid residues of palm nuts or kernels, whether or not ground or in the form of pellets, resulting from the extraction of palm nut or kernel fats or oils
- ex 2905 45 - Glycerol, with a purity of 95 % or more (calculated on the weight of the dry product)
- 2915 70 - Palmitic acid, stearic acid, their salts and esters
- 2915 90 - Saturated acyclic monocarboxylic acids, their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulphonated, nitrated or nitrosated derivatives (excluding formic acid, acetic acid, mono-, di- or trichloroacetic acids, propionic acid, butanoic acids, pentanoic acids, palmitic acid, stearic acid, their salts and esters, and acetic anhydride)
- 3823 11 - Stearic acid, industrial
- 3823 12 - Oleic acid, industrial
- 3823 19 - Industrial monocarboxylic fatty acids; acid oils from refining (excluding stearic acid, oleic acid and tall oil fatty acids)
- 3823 70 - Industrial fatty alcohols
3. Key challenges in EUDR compliance for palm oil
While the palm oil industry has a head start on EUDR preparedness thanks to standards such as RSPO, ISPO and MSPO, companies still face significant hurdles when demonstrating compliance. As highlighted by the NVWA’s recent EUDR dry run, certifications are not sufficient on their own. They can help support due diligence, but they do not replace the operator’s legal obligation to demonstrate compliance with all requirements of the regulation.
Traceability to the plot level
The EUDR requires geo-location mapping for every farm plot, but many smallholders do not yet have their farms mapped. Traders also often receive only a list of supplying mills, with no details on the underlying farms or Fresh Fruit Bunch (FFB) origins. This makes it difficult for operators and traders to provide the required polygon-level data. It is important to clarify, however, that plot level traceability is not unfeasible simply because smallholders are unmapped, but rather due to the structure of the palm oil supply chain itself. In most cases, supply chains are highly fragmented, creating breaks in the chain of custody. As a result, most mid- and down-stream actors only have access to mill lists. Combined with commercial data protection considerations, this fragmentation means that full traceability back to the plot level is generally not feasible.
Complex and fragmented supply chains
Palm oil often passes through a network of intermediaries (collectors, traders and mills) before reaching processors or exporters. This complexity makes segregation and end-to-end traceability especially challenging.
Smallholder readiness
Smallholders are central to palm oil production, accounting for around 41 % of the planted area in Indonesia, 27 % in Malaysia, and an estimated 35 to 40 % of global output. Yet awareness of the EUDR remains low among both smallholders and local authorities. Without targeted technical and financial support, many risk exclusion from EU supply chains, threatening livelihoods while also weakening overall compliance efforts.
Protecting Indigenous Peoples and Community Land
Indigenous Peoples and Local Communities remain highly vulnerable to land grabs and tenure conflicts in palm oil production areas. These risks underline the importance of due diligence under Article 10 of the EUDR, which requires operators to ensure that commodities are produced in compliance with ‘relevant legislation of the country of production’, including laws on land use rights, environmental protection, labour rights and human rights. Robust checks against these criteria are critical to prevent sourcing from areas where rights violations occur and to build transparent, responsible supply chains.
Limited availability and high cost of segregated material
Another hurdle for palm oil operators is the limited supply of RSPO-segregated material. Even where it is available, the costs are significantly higher than conventional or mass-balance certified palm oil. This creates barriers for companies seeking to align EUDR compliance with more stringent sustainability commitments, particularly when competing in price-sensitive markets.
Step-by-step approach to EUDR-compliant palm supply chains
Step 1: Map your palm supply chain
Identify every actor in your palm network, from cooperatives and buying stations to individual smallholders and larger estates, mills and farms. While mill lists were once enough, the EUDR now requires precise geo-location data at the plot level. Collect precise geo-location data, always using polygon boundaries instead of point coordinates. This ensures you can pinpoint the exact origin of your palm oil and link it back to the land where it was produced.
Step 2: Establish a due diligence system
Gather key documentation such as farm boundaries, satellite-based deforestation checks, and proof of compliance with local land and labour laws. While voluntary certifications like Fairtrade or Rainforest Alliance may support your efforts, they cannot substitute for the mandatory verification requirements under the EUDR.
Step 3: Conduct a comprehensive risk assessment
As the burden of proof rests with operators, it is essential to provide accurate and thoroughly documented evidence to demonstrate compliance. All data collected must be verified and analysed against the requirements of the EUDR. This entails assessing the quality of farm plot data, the risk of deforestation at the farm plot level including deforestation history of the sourcing region and proximity to forest frontiers, the clarity of land tenure and associated legality risks, such as any overlap between the production area and protected areas or Indigenous Peoples and Local Communities (IPLC) and the complexity of the supply chain.
Step 4: Mitigate identified risks
When a risk assessment flags a farm plot or supplier for deforestation risk, legality concerns or data quality issues, Meridia’s Verify provides not only detection, but also resolution. Each test result includes an explanation of the issue, a visual example, and corrective actions. This helps users move quickly from identifying risks to addressing them, without having to hunt through documentation. For example, if a plot overlaps with a protected area or contains implausible GPS data, the platform suggests steps such as remapping or providing evidence of lawful cultivation. This strengthens compliance and helps maintain supply chain continuity while enabling smallholders to meet EUDR requirements.
Step 5: Submit due diligence statements
Once risks have been reduced to a negligible level, a due diligence statement must be submitted for each shipment. This should set out the details of the palm oil product, the geo-location data of the plots of origin, and a declaration of compliance. The statement is uploaded to the EU’s central information system, which issues a unique reference number that must be included in customs declarations.
Step 6: Maintain continuous monitoring
Compliance is best understood as an ongoing process rather than a single event. Continuous monitoring may be undertaken through satellite imagery, field audits and periodic supplier reporting. In many cases, smallholders and mills are encouraged to strengthen data management practices, map plot boundaries and make use of traceability tools. Such measures contribute to sustained compliance over time and help to reinforce trust across the supply chain.
Palm-specific strategies and best practices
Palm oil supply chains are complex, often involving fragmented traceability, overlapping land rights, and opaque flows of derivatives. Yet, practical solutions exist that help traders and operators meet the requirements of the EUDR while reducing risks. Meridia’s approach focuses on closing critical data gaps and turning compliance into a source of confidence.
Improving smallholder readiness
A large share of palm oil still comes from smallholders who often lack the tools, knowledge and resources to comply with EUDR requirements. Meridia helps bridge this gap by supporting farmer mapping, building registries, and delivering compliance training. This strengthens the inclusion of smallholders in EU supply chains and reduces the risk of exclusion that could otherwise increase inequality in the sector.
From mill lists to actionable intelligence on derivatives
Palm oil derivatives pose another compliance challenge. Traders often receive lists of mills without insight into the farms or FFB origins. Meridia’s supply shed modelling extends to derivatives by creating probabilistic sourcing maps. These maps show where derivatives likely originate, highlight exposure to deforestation or protected areas, and flag potential land tenure conflicts. This transforms opaque mill lists into actionable intelligence that companies can use for due diligence under the EUDR.
Collaborating across the value chain
No single actor can ensure compliance in isolation. Meridia’s methodology complements existing initiatives such as Roundtable on Sustainable Palm Oil (RSPO), the Indonesian Sustainable Palm Oil (ISPO), and the Malaysian Sustainable Palm Oil (MSPO), helping operators, traders and processors align data and sustainability practices. This collaborative approach reduces duplication, speeds up integration, and ensures that no part of the supply chain is left behind in the shift to EUDR compliance.
Making IPLC land rights visible
In countries like Indonesia, large-scale palm oil development often overlaps with Indigenous Peoples’ and Local Communities’ (IPLC) lands. Violations of these rights (whether legal, customary, or moral) remain widespread.
Meridia’s methodology does not stop at identifying Indigenous territories. It recognises multiple categories of IPLCs:
- Indigenous Peoples in officially recognised territories
- Traditional communities in the sustainable use of protected areas
- Family farmers in agrarian reform areas
- Afro-descendant communities (e.g. quilombola in Latin America)
While different countries use different terms, we standardise this variation to ensure that social groups, especially vulnerable ones, are included in land tenure data and risk analysis.
We are clear-eyed about the limits of FPIC (Free, Prior and Informed Consent) frameworks. As critics rightly argue, many FPIC implementations are superficial, linguistically inaccessible, and conducted under political pressure. Rather than greenwash consent, we focus on mapping, acknowledging and representing IPLC presence and tenure transparently, an essential step toward rights-based sourcing.
6. How Verify can support your palm EUDR compliance
Meeting the requirements of the EUDR demands more than risk detection alone. It requires reliable systems for gathering, validating and acting on data at every stage of the supply chain. Meridia’s Verify has been developed with these needs in mind, providing operators and traders with the tools to move from compliance planning to practical implementation.
Verify enables:
- Plot level traceability through boundary verification, helping to demonstrate that palm oil has not been sourced from deforested areas after the 2020 cut-off date.
- Structured due diligence by consolidating farm data, legality checks and deforestation assessments into a single workflow aligned with EUDR requirements.
- Targeted risk resolution with issue-specific explanations, visual examples and corrective actions, reducing the gap between identifying risks and addressing them.
- Continuous monitoring via satellite data, supplier reporting and field verification, supporting long term compliance and building trust across supply chains.
By addressing the most persistent challenges of palm oil supply chains: fragmented traceability, unclear land tenure and limited smallholder capacity, Verify helps operators, traders and processors not only meet the legal requirements of the EUDR but also build more transparent and resilient supply chains.
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