Bridging the Compliance Divide: Key Insights from the Global Palm Oil Mill Risk Assessment 2025

Bridging the Compliance Divide: Key Insights from the Global Palm Oil Mill Risk Assessment 2025

The Changing Landscape of Palm Oil Compliance

The global palm oil sector is entering a new era of accountability, driven by stricter deforestation regulations and an increasing demand for transparent sourcing.  Compliance is no longer optional; it determines who gains or loses access to the world’s largest markets.

As the European Union Deforestation Regulation (EUDR) moves from discussion to enforcement, companies across the value chain—from producers to brand owners—must now meet a higher bar of traceability and legality.

The Global Palm Oil Mill Risk Assessment 2025 provides the most comprehensive overview to date, analyzing 2,508 mills across major producing regions. The findings reveal a clear message: the path to sustainable market access depends on bridging the gap between voluntary market commitments and legal compliance.

Dual Standards, One Urgent Reality

At the core of today’s compliance challenge lies a consequential but straightforward difference in dates.

• NDPE (No Deforestation, No Peat, No Exploitation) policies, followed by most global buyers, prohibit deforestation after 31 December 2015.
• EUDR, meanwhile, defines legality and deforestation cut-offs starting 31 December 2020.

This five-year gap has created a “compliance divide.” While a mill may meet the EUDR’s legal requirements, it could still violate the stricter NDPE standards demanded by sustainability-aligned buyers. The challenge for companies is not choosing between the two, but meeting both simultaneously.

The assessment identifies:

• 317 mills (12.6%) as High Risk under NDPE.
• 190 mills (8%) as High Risk under EUDR.

That difference—127 mills—marks the zone of greatest exposure, where reputational and commercial risks collide.

Regional Hotspots: Southeast Asia at the Center

The Southeast Asia Pacific (SEAP) region remains the heart of both global production and compliance challenges. Out of all 2,508 mills, 86% are located in SEAP.

• 303 mills in SEAP are High Risk under NDPE.
• 180 mills are High Risk under EUDR.

These findings show that risk concentration in SEAP is not just environmental—it’s structural. Smallholders play a vital role in the supply chain. Yet, they face the steepest barriers to compliance, including high certification costs, incomplete land legality, and limited access to digital traceability tools.

Unless these inclusion gaps are addressed, the transition to deforestation-free trade will leave many producers behind.

Traceability to Plantation: From Obligation to Opportunity

EUDR requires full geolocation traceability down to the plot of land. For many producers, this is a daunting technical and legal challenge—but also a strategic opportunity.

Investing in Traceability to Plantation (TTP) systems not only meets EUDR’s data requirements but also strengthens corporate integrity under NDPE. The Global Palm Oil Mill Risk Assessment 2025 identifies 263 mills (10.5%) as Potential High Risk under NDPE due to incomplete TTP data. These mills are not proven to be non-compliant, but cannot yet prove compliance—a data gap that can be closed through field verification and digital integration.

With the EUDR enforcement deadline only weeks away (December 30, 2025, for large companies), the need for rapid validation of traceability has never been more urgent.

From Risk to Responsibility

The findings of the 2025 Global Palm Oil Mill Risk Assessment reveal both progress and persistent challenges. The risk of deforestation is becoming more measurable, yet compliance remains fragmented. To transform these insights into action, companies must adopt a dual compliance strategy:

• Maintain NDPE as the uncompromising baseline for sustainability.
• Use EUDR traceability as the technical foundation for verification and proof of compliance.

This approach ensures that producers and buyers remain aligned with both market expectations and legal obligations—turning risk into responsibility.

Partnering for a Transparent Future

The transition to deforestation-free supply chains cannot be achieved in isolation. It requires the sharing of data, collaborative verification, and trust across all levels of the value chain.

Through initiatives such as Inovasi Digital Agriplot DDS and MosaiX, our teams are supporting partners to:

• Strengthen traceability from plantation to product.
• Verify legal boundaries and supplier compliance.
• Develop risk dashboards and field validation programs.

These tools enable companies to move from reactive compliance to proactive leadership in responsible sourcing.

To explore collaboration or access the data assessment, please contact us at [email protected].

Together, we can bridge the compliance divide—building a palm oil industry that is transparent, inclusive, and free from deforestation.