PFAD residue from palm oil refining

While Neste does not use crude or refined palm oil in the production of its renewable products, we purchase waste and residues generated in palm oil production processes for use as raw materials. We remain committed to supporting the industry-wide implementation of No Deforestation, No Peat Expansion, No Exploitation (NDPE) commitments through our membership in the Palm Oil Collaboration Group (POCG).

Palm fatty acid distillate or PFAD is one of the many waste and residue raw materials that we have in our portfolio. Although linked through supply chains, palm oil and PFAD are different renewable raw materials: palm oil is a crop-based vegetable oil whereas PFAD is a processing residue derived from the refining of food-grade palm oil for the food and chemical industry uses.

PFAD fully meets the EU RED definition of residues:

…a substance that is not the end product(s) that a production process directly seeks to produce. It is not a primary aim of the production process and the process has not been deliberately modified to produce it.”

Some have argued that PFAD should not be considered a residue because it has market value and many uses. In the circular economy, however, all residues and wastes should have an avenue to be utilized, and thus have value.

Degraded fats

After the harvesting oil palm and handling of fresh fruit bunches, the fat in the fruit starts degrading.

The longer it takes for the fruit to be transported, processed, and refined into palm oil, the larger part of the fats degrade. When palm oil is being refined into food-grade oil, these degraded fats, free fatty acids, are removed from the oil by distilling. PFAD has to be removed to improve the oil's taste, odor, and color, as well as to increase its shelf life.

The formation of these rancid, degraded fats cannot be completely prevented. PFAD is unsuitable for human consumption and undesired from the food oil production's perspective. Hence, PFAD needs to be removed before the palm oil meets the food industry’s quality standards.

Readily available

Because the demand for palm oil by the food industry continues being high, there is plenty of this PFAD residue available for various uses.

PFAD use does not drive oil palm cultivation

Because PFAD is generally a non-desired output of the palm oil refining process that the producers are trying to minimize, its use does not drive palm oil production or expansion of its cultivation.

Situation is similar with sawdust: nobody cuts down trees to produce sawdust. Instead, trees are harvested for logs that can be processed to planks at a saw mill. Sawdust is generated as an undesired residue, which however has value and can be used for useful purposes.

Therefore, palm oil refining aims to maximize the output of edible palm oil, not PFAD. PFAD is, however, generated despite producers’ continuous efforts to improve their processes to minimize PFAD volumes and maximize the output of more valuable fractions from the refinery.

Because PFAD is a non-desired output of the palm oil refining process that the producers are trying to minimize, its use does not drive palm oil production or expansion of its cultivation, nor does it accelerate deforestation.

PFAD as renewable raw material

Waste and residue raw materials like PFAD provide the biofuels industry, among others, with alternatives to raw materials that can also be used in the food industry.

More about PFAD supply chain

PFAD dashboard

Comprehensive information about our PFAD supply chain can be found on Neste's traceability dashboard.

PFAD supplier workshops

Neste actively engages with its renewable raw material suppliers through workshops to collaboratively develop solutions in the supply chain to continuously improve sustainability.