For the palm and oleochemical industry, November 2025 is not just another month; it is the final window for preparing the Stearic Acid (SA) supply chain for the seismic shift imposed by the European Union Deforestation Regulation (EUDR). Companies must recognize that regulatory compliance is the new frontier for market access. Tradeasia International has long prioritized full transparency in its palm sourcing, understanding that an unbroken chain of custody is non-negotiable for future global trade.

The Traceability Imperative: Plot-Level Verification

The EUDR is uncompromising: it demands 100% traceability of SA, a key palm derivative, all the way back to the original plot of land, verifying that the source is deforestation-free since the December 31, 2020, cut-off date. While this requirement comes into full force for large operators from December 30, 2025, proactive compliance is essential now. Current industry traceability data indicates a worrying reality: while leading producers have verified approximately 83% of their supply as deforestation-free, a crucial 17% remains high-risk, a figure that must be aggressively closed this month.

Mitigating Risk: The Cost of Inaction

The challenge is amplified by the sheer scale of smallholders, who account for an estimated 35% to 40% of global palm production and often lack the necessary geo-location data required by the regulation. If excluded, this massive segment could destabilize supply. The financial stakes are immense: non-compliant companies face fines of up to 4% of their total annual EU turnover. Moreover, the investment required to implement the necessary geo-location and due diligence systems is already projected to increase exporters' operational overhead by 5% to 8%. Prudent palm traders are currently focusing resources on digitizing plot data and enhancing verification accuracy, recognizing that achieving this granular, plot-level data accuracy in November is the only way to safeguard their market share and avoid catastrophic penalties.

 

Sources:

  1. Oleochemicals Asia: "EUDR Readiness: The Oleochemical Sector's Q4 Traceability Benchmark" (https://www.oleochemicalsasia.com/supply-chain-traceability-in-oleochemicals/)

  2. European Commission: "EU Deforestation Regulation (EUDR) Official Text and Guidance" (https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en)

  3. Proforest: "Assessing Smallholder Inclusion and EUDR Compliance Risks in Palm Supply Chains" (https://www.proforest.org/publications/deforestation-regulation-smallholders-palm-oil/)