Indonesia firms in palm oil fraud probe supplied fuel majors

The Role of Indonesia Firms in Palm Oil Fraud Probe Supplied Fuel Majors

Indonesian companies targeted in a palm oil fraud probe supplied European firms, including Italian energy giant Eni and Finnish sustainable aviation fuel leader Neste, an investigation by Agence France-Presse (AFP) and SourceMaterial has found. The links raise fresh questions about supply chains in the biofuel sector, experts said, and follow persistent allegations of fraud involving palm oil products used as fuel feedstocks.

There is no suggestion that Eni, Neste, or other companies supplied by Indonesian firms implicated in the probe had knowledge of or involvement in fraud. The Indonesian probe alleges local companies and government officials conspired to pass off palm oil as a waste byproduct called palm oil mill effluent (POME), including by offering bribes.

For the Indonesian government, this is a financial issue — the higher tax on palm oil means labeling the product as POME allegedly defrauded authorities of millions of dollars in revenue. For customers, the allegations threaten sustainability pledges. Palm oil has long been associated with deforestation, and both Eni and Neste have officially removed it from their supply chains.

The European Union will ban its use in biofuel from 2030. Both Eni and Neste received multiple shipments described as POME from Indonesian companies accused of mislabeling palm oil as the waste byproduct.

Edward Lance Arellano Lorilla

CEO / Co-Founder

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