Eni tells shareholders it will ditch palm oil diesel by 2023

In a written response to Italian T&E member Legambiente, submitted for their annual general meeting, the energy company stated: ‘As part of its decarbonisation strategy, Eni is substantially reviewing its supply chain in order to eliminate the use of palm oil and PFAD by 2023’. 

Last year the European Union labelled palm oil diesel unsustainable and stated that it should not receive public support because it causes deforestation. According to the  Renewable Energy Directive II, the use of palm oil in diesel will be gradually reduced from 2023 and should reach zero in 2030, with some exemptions. This law allows member states to be more ambitious and stop the promotion of palm oil in diesel earlier.

The Italian government is in the process of transposing the EU’s Renewable Energy Directive II into national law. Italy’s parliament will shortly discuss the national measures that will remove incentives to use palm oil in biodiesel in order to comply with the EU law.

Cristina Mestre, biofuels manager with Transport & Environment (T&E), said: “This is a step in the right direction to protect the world’s remaining rainforests, our climate and orangutans. To make sure Eni fulfills its promise, we urge the Italian government and members of parliament to end all support for palm oil diesel in 2021 already and for soy diesel too, as it’s another oil crop that drives deforestation.”

Earlier this year Eni paid a €5m fine issued by Italy’s advertising watchdog for deceiving consumers over its ‘green’ diesel. The complaint was lodged by Italy’s consumer organisation Movimento Difesa del Citadino, environmental NGO Legambiente and T&E.  It is the first ruling against greenwashing in Italy’s history.

In the same response Eni said that its imports of crude palm oil and derivatives totalled almost 300,000 tonnes in 2019 [*].

Palm oil is known to be an important driver of the destruction of rainforests and wildlife. According to a study for the European Commission, biodiesel from palm oil is three times worse for the climate than regular diesel when indirect emissions are accounted for.

Almost 60,000 Italians have already urged the government to stop incentives for the use of palm oil in diesel at www.change.org/unpienodipalle.

Almost two-thirds of all palm oil used in Europe in 2018 was burned as energy. Italy is the second largest palm oil biodiesel producer in the European Union. The palm oil comes predominantly from Indonesia and, to a lesser extent, from Malaysia, two countries with notable deforestation rates in the past two decades.