Representatives from Europe’s oleochemicals industry are urging lawmakers in Brussels to close oversight gaps in the European Union Deforestation Regulation (EUDR) that threaten European esters producers by allowing untraceable materials into the market.
A cross-industry alliance of the European Oleochemicals and Allied Products Group (APAG) and the European Committee of Organic Surfactants and their Intermediates (CESIO) is concerned that palm and palm kernel oil derivatives have been omitted from the regulation. This creates an uneven playing field for European oleochemical and surfactant companies.
In stakeholder feedback to the commission in mid-May, the alliance reiterated its position that certain fatty acids, alcohols, glycerol, esters, biodiesel and surfactants be added to Annex 1 – a list of goods attached to the EUDR that should be traceable to their origin.
Unless Annex 1 is amended, it would be possible “to import the same chemistry under a similar HS Code, with one listed under Annex 1 and the other one not. This allows market players to change the HS code and gain a competitive advantage over companies following the EUDR process,” Sofia Serafim, APAG’s sector group manager, told Lube Report.
HS codes, or Harmonized Commodity Description and Coding System, identify internationally traded goods. Ester makers could manufacture materials outside of the EU’s jurisdiction and import them into the EU market potentially using cheaper materials that are not compliant with the EUDR .
“Anything that adds bureaucracy adds cost, consequently. Because nobody is doing this for free,” Matthia Hof, global business manager of bio-lubes for oleochemical company Emery, told Lube Report.
The cost of a fatty acid certified under the Roundtable on Sustainable Palm Oil can be as much as €200 per metric ton more than one that is uncertified, Hof explained. The EUDR could place a similar cost burden on other materials.
Currently, the EUDR is in a transitional implementation stage. Having already been delayed, current global economic uncertainty may push the timeline back further, at the expense of sustainability, he said.