The EU Deforestation Regulation (EUDR, Regulation EU 2023/1115) entered into force on December 30, 2024 for large operators and June 30, 2025 for SMEs, requiring due diligence systems capable of demonstrating that palm oil — and 6 other forest-risk commodities — was not produced on land deforested after December 31, 2020. For commodity procurement chains supplying European food manufacturers, this represents the most significant supply chain documentation requirement since the 2014 EU Timber Regulation, and the operational adjustments required are substantially more complex.
RSPO MASS BALANCE: HOW IT WORKS AND WHERE IT FALLS SHORT
RSPO (Roundtable on Sustainable Palm Oil) Mass Balance certification allows a certified supply chain to mix certified and uncertified palm oil volumes, tracking the certified proportion by volume rather than physical identity of molecules. While Mass Balance has been the dominant certification model for European food manufacturers, EUDR's requirements go significantly further: the regulation demands geolocation data (polygon mapping) for each plot of land where the commodity was produced, with a resolution sufficient to demonstrate non-deforestation at parcel level. RSPO Mass Balance, by design, does not maintain this plot-level traceability.
SATELLITE MONITORING AND GEOLOCATION REQUIREMENTS
| Requirement | RSPO Mass Balance | EUDR Compliance |
|---|---|---|
| Plot Geolocation | Not required | GPS polygon per smallholder |
| Deforestation Baseline | HCS/HCV Assessment | Dec 31 2020 (Copernicus data) |
| Satellite Verification | Not required | ESA/JRC Forest Map cross-check |
| Chain of Custody | MB aggregated | Identity-preserved preferred |
| Due Diligence Statement | RSPO certificate | EU Due Diligence Portal submission |
DOCUMENTATION CHAIN FOR EUDR-COMPLIANT PALM OIL
An EUDR-compliant palm oil supply chain originating from a Malaysian mill requires: (1) geolocation polygon data for each FFB (Fresh Fruit Bunch) supplying smallholder, uploaded to the EU's Information System for Official Controls (iMOPE); (2) a Deforestation Risk Assessment referencing the JRC Global Forest Cover dataset confirming no canopy loss post-December 2020 on any supplying plot; (3) a Due Diligence Statement filed on the EU portal before each shipment; and (4) supply chain operator certification under an EUDR-recognised scheme (RSPO NEXT or ISEAL-aligned equivalent). XRT's Singapore desk has been working directly with MPOB-licensed mills to implement GPRS polygon mapping for 43,000 smallholder hectares in Sabah and Johor since Q3 2024.
OPERATIONAL ADJUSTMENTS FOR PROCUREMENT CHAINS
European food manufacturers sourcing CPO or RBDPO through commodity intermediaries should not assume their current RSPO Mass Balance certificates satisfy EUDR obligations — they do not for the portal submission requirement. XRT recommends transitioning to RSPO NEXT or Identity Preserved supply for EU-destined volumes, which carries a premium of approximately $25–$45/MT over standard Mass Balance priced CPO. For clients with substantial volumes, XRT's agricultural desk can structure long-term origin agreements directly with RSPO NEXT certified mills in Sabah, Pahang, and Sumatra, eliminating the intermediary documentation gap. First available parcels under these structures are scheduled for Q3 2025 shipment.