Indonesia arrests expose EU biofuel verification gaps
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- Indonesian authorities arrested 11 suspects, including Customs Technical Director Fadjar Donny Tjahjadi, for allegedly facilitating the export of hundreds of millions of euros of crude palm oil mislabelled as Palm Oil Mill Effluent (POME); suspects face tax evasion charges that could carry life sentences.
- The arrested network supplied mislabelled POME to major EU biofuel producers including Eni, Repsol, and Neste, according to investigative journalists Source Material.
- Transport & Environment's 2025 report "Palm oil in disguise" concluded that Europe's consumption of waste-based biofuels appears to exceed plausible global supply, arguing palm oil is likely entering the EU disguised as waste feedstocks.
- Between 2022 and 2025, the EU's consumption of imported POME-based biofuels skyrocketed, turning the once-obscure residue into one of the largest feedstocks for Hydrotreated Vegetable Oil (HVO) and Sustainable Aviation Fuel (SAF).
- The EU's 2019 phase-out of palm oil in biofuels — driven by deforestation concerns — pushed demand toward waste feedstocks that count multiple times toward renewable energy targets and receive more generous incentives than crop-based fuels.
- Former EU Energy Commissioner Kadri Simson acknowledged in 2024 that European authorities lack the legal powers to inspect biofuel production facilities outside the bloc's borders.
- Belgium and Ireland had previously raised fraud concerns over POME and Used Cooking Oil supply chains at the EU Council, but the issue was not resolved before the Indonesian arrests surfaced.
Why it matters: The arrests validate years of warnings from T&E, EU member states, and NGOs that the bloc's waste-biofuel incentives are being exploited at scale. Because waste feedstocks count multiple times toward renewable energy targets and EU officials admit they cannot legally inspect overseas facilities, hundreds of millions of euros in green-fuel subsidies may have flowed to fuels made from the very palm oil the EU banned in 2019 — undermining the credibility of Europe's transport decarbonization accounting.
