Palm fatty acid distillate (PFAD) is a processing residue derived from the refining of food-grade palm oil. Neste buys PFAD only from those suppliers that are committed to sustainable working practices and meeting or exceeding the strict sustainability criteria embedded in the regulation on biofuels. These criteria include a proactive approach to preventing deforestation and mitigating its risk.
All Neste-sourced renewable raw materials, Neste-sourced PFAD volumes included, are traceable to the point of origin as the law requires of biofuels producers (e.g. EU RED in Europe).
Since April 2017, we have been working towards a target of developing traceability for our entire PFAD supply chain to oil palm plantations. Working towards the target has required us to map large parts of previously unmapped food industry palm oil supply chains, but we have made significant progress. Our supply chain is dynamic and slight fluctuations in the share of traceable supply chains are possible over time.
We continue to engage with our suppliers to make progress in mapping our entire PFAD supply chain to plantations. Already 100% of our PFAD supply chain has been independently mapped and validated to the supplying palm oil mills and 93% all the way to plantations. This significantly surpasses the fuel industry's current regulatory requirement for residue raw materials, in PFAD residue's case to the palm oil refinery. When mapping the supply chain to the plantations, publicly available data (i.e. RSPO audits) and supplier reporting have been used. We collaborate with external, locally-operating sustainability experts, e.g. the Consortium of Resource Experts (CORE), who supports us particularly in our continuous efforts to develop the transparency of our raw material supply chains, and in assessing and mitigating the environmental risks of our company’s PFAD supply chain.
We continue engaging with PFAD-supplying palm oil refineries to ensure that their operations and those of their supplying mills are in compliance with our sustainability policies and principles. We have also evaluated each palm oil mill for environmental risks as part of our proactive approach to preventing deforestation.
Supply chain January - June, 2023 in numbers
of the Neste PFAD supply chain mapped to the mill
of the Neste PFAD supply chain mapped to the plantation
Our PFAD supply chain January - June, 2023
During January through June, 2023, Neste sourced PFAD from 21 supplier refineries. Eighteen of these refineries are located in Indonesia, and three in Malaysia. These refineries are displayed in the map below.