PALMOILMAGAZINE, JAKARTA — An international investigation has uncovered links between an Indonesian palm oil company under scrutiny for alleged fraud and major European energy firms, including Eni and Neste, raising fresh concerns over the integrity of global biofuel supply chains.
The findings stem from a joint probe by AFP and SourceMaterial, focusing on the global biofuel market and the use of palm-derived feedstocks in renewable energy production.
At the center of the case is an alleged scheme in Indonesia where companies, along with certain officials, are suspected of misclassifying palm oil as palm oil mill effluent (POME)—a waste byproduct—to bypass higher export taxes.
For the Indonesian government, such practices could result in millions of dollars in lost revenue. For European buyers, the issue casts doubt on sustainability claims within their supply chains. However, there is no indication that companies such as Eni or Neste were aware of or involved in the alleged misconduct.
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Supply Chain Under Scrutiny
The investigation found that both companies had received shipments labeled as POME from Indonesian firms currently under investigation.
This comes as the European Union moves to phase out palm oil-based biofuels by 2030 due to concerns over deforestation. Analysts say the case highlights vulnerabilities in the verification systems underpinning the global biofuel industry.
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“The European Union has decided to phase out palm oil-based biofuels due to their link to deforestation. However, it is all too easy to disguise palm oil as waste, such as POME. The verification system is clearly still weak,” said Cian Delaney of Transport & Environment (T&E), as quoted by Palmoilmagazine.com from the MalayMail on Wednesday, March 19, 2026.
Corporate Response and Ongoing Investigation
In response, Eni stated it had no direct contractual relationship with the companies involved and sourced materials through certified suppliers, which have since terminated ties following the investigation.
Neste, meanwhile, said it had instructed its suppliers to exclude the implicated firms from its supply chain. The company also reported that laboratory tests on shipments from 2023 to 2025 indicated the materials were consistent with palm-based waste rather than pure palm oil.
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Indonesian authorities have long suspected irregularities in POME trade. In February, law enforcement detained 11 individuals—including customs officials—in connection with alleged export manipulation between 2022 and 2024.
Further investigations have identified several companies potentially involved, including Green Product International, Surya Inti Primakarya, and Bumi Mulia Makmur. These firms were reportedly linked to shipments to Eni between 2022 and 2024, and to Neste between 2023 and 2024.
The case has also raised questions about the effectiveness of certification bodies such as the International Sustainability and Carbon Certification. While some companies have had their certifications revoked, others remain certified despite scrutiny.
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Industry stakeholders stress that transparency will be key to restoring trust. James Cogan of ClonBio called on POME industry players to disclose data on volumes, sources, and documentation for independent verification.
As global demand for sustainable biofuel feedstocks continues to rise, the case underscores the growing challenge of ensuring supply chain integrity—serving as a warning for regulators and industry players to strengthen oversight and accountability going forward. (P2)
