Soybean oil will not be classified as a high indirect land-use change (ILUC) risk by the EU, despite pressure from NGOs. Soy’s value as a source of animal feed has saved it from the pariah status of palm oil. At least soy’s position as a raw material for food, feed and biobased chemicals is safe for the present. But the argument over the designation of soybean oil is less relevant now, because a new regulation is being implemented to ensure that only deforestation-free commodities are placed on the European market.
The phenomenon of indirect land-use change, a direct result of Europe’s biofuel policy, was first publicised in 2008. Agricultural land in the tropics that complied with the strict no-deforestation rules in the Renewable Energy Directive, was being repurposed to grow the raw materials for biofuels, to profit from EU incentives. Since then, the quantity of crop-based biofuels was capped, but the absence of any controls on deforestation linked to the same crops used as food and bio-based chemicals remained a problem. Now that situation is set to change.
The EUDR (European Deforestation Regulation), which will be implemented at the end of 2026, will tackle deforestation caused by high-risk crops used for food, chemicals and other applications. It prohibits the use of palm oil, soy, coffee, cocoa, rubber, wood and beef, linked to forest degradation or destruction since the end of 2020. The key point being that the EUDR covers all sectors. Traceability back to the originating agricultural plot of land is required, together with segregation from any non-compliant materials. The EUDR will reduce indirect land use change caused by market switching. It is unfortunate that implementation has been delayed. Also the regulation covers only the seven highest deforestation-risk risk commodities at present. However, it can be extended to other commodities if necessary.
Palm oil was singled out as a high indirect land-use change (ILUC) risk feedstock in 2019. This designation under the Renewable Energy Directive will remain and will continue to tarnish its reputation in other sectors. So, despite being the highest yielding vegetable oil, often the cheapest, and widely available with a sustainability certification, research to substitute palm oil in a whole range of products is well underway.
The EU funds many projects aiming to replace palm oil in chemical products with raw materials made from biogenic wastes. These wastes are more difficult to source and process than virgin feedstocks, so projects will have to adapt or face significant barriers to commercialisation. In the US, Bill Gates is backing a company making a palm oil substitute from yeast, which is targeted at the high-end personal care market.
The EUDR is itself starting to influence market behaviour. Companies are pivoting towards rapeseed oil as a feedstock that is not covered by the EUDR. Verbio is producing bio-based C10 building blocks from European rapeseed oil. And Sasol is doing something similar.
But some would say that this activity, substituting one vegetable oil for another as feedstock for biobased intermediates, is not the best use of resources. Hopefully now that sustainability risks are being brought under control, the stigma of deforestation will not be relevant and the chemicals industry can focus on tackling more important technical challenges to the development of renewable chemicals.
Published: 23 July 26
