How a major European chemical company used stakeholder expectations and risk insights to prepare more defensible sourcing decisions.
In March 2026, Indonesian prosecutors alleged that companies had bribed officials to relabel virgin palm oil as palm oil mill effluent (POME), a waste product or biofuel that earns premium treatment under the EU Renewable Energy Directive.
Europe reportedly uses about twice as much POME as the world can plausibly produce. It imports far more used cooking oil (UCO) than its suppliers can credibly collect. Waste is capped by the activity that produces it. It cannot expand at the same pace as demand. When the numbers do not add up, part of the “waste” is something else.
The same biofuels are increasingly moving into other value chains, and from there into everyday consumer products like shampoo bottles, car dashboards, phone cases and more. While only a few end consumers will question authenticity, regulators, buyers and campaigners standing between them and the suppliers increasingly will.
For companies, this is about how far a false label can travel across value chains and how it can reflect on their sourcing decisions. Left unchecked, the biofuel can be as bad as the fossil one it replaces, or worse. This cannot be addressed by legal compliance alone. The fraudulent volumes entered the market fully certified. Whether a sourcing decision holds or not depends on whether the stakeholders who judge it, regulators, buyers and civil society, are confident about lending it their credibility.
The client challenge
Against this backdrop, a major European chemical company approached POTS while considering UCO, POME and tallow for its production processes.
These feedstocks are often grouped as “sustainable” alternatives. In practice, they carry different risks and are judged by stakeholders using different standards of evidence. For example, UCO carries first-mile authenticity and traceability risks. POME remains connected to the wider palm oil system. Tallow raises questions around animal welfare and customer acceptance.
No feedstock is impact-free. The challenge for the client was to understand what responsible sourcing could mean across three fundamentally different materials before committing to volumes, customers or claims.
What we did: asked the people who shape credibility
Desk research showed how each feedstock is discussed, regulated and certified. It could not show where different stakeholders saw a credible and acceptable path in practice.
We combined feedstock-specific risk research and corporate benchmarking with 19 interviews across 13 organisations from three continents, including certification schemes, auditors, downstream buyers and civil-society groups.
The interviews tested what good practice looks like under imperfect conditions: which evidence stakeholders trust, when certification is sufficient, which additional safeguards they expect, which claims the evidence can support and where concerns remain.
The aim was not a simple yes-or-no answer. It was to establish where evidence was strong, where expectations diverged and where the client would need to exercise judgement.
Every finding was recorded with its source and confidence level, separating verified fact from stakeholder position and informed judgement.
What the work revealed
Certificates set the floor, not the standard. Certification confirms that a process was followed. It does not always prove that a feedstock is what it claims to be or that the claimed volume could realistically exist. Credibility therefore depends on safeguards matched with risk that can be evidenced, including volume plausibility checks and clear limits on sourcing and claims.
Good practice is feedstock-specific. Each feedstock originates from a different production system, moves through a distinct supply chain and creates its own environmental, social and reputational risks and trade-offs. Applying a single checklist across all will miss the risks that determine whether a decision will hold.
Not every concern can be solved by another safeguard. Some gaps can be managed through stronger evidence, narrower claims or demonstrated improvement such as strengthened first-mile traceability. Others require a boundary: not sourcing from a particular supplier or region, not using a feedstock for certain customers, or not making a claim the evidence cannot support.
Credibility is granted by stakeholders over time through decisions that remain consistent with the evidence.
What this enabled
The work replaced a broad concern about scrutiny with a clear decision basis for each feedstock: what must be evidenced, what can credibly be claimed and which safeguards are needed.
It enabled the client to make strategic decisions by weighing the trade-offs and setting clear boundaries for volumes, suppliers, customers and acceptable residual risk. It also clarified which risks could be managed internally and which required action from suppliers, certification schemes, regulators or the wider sector.
The result was not the removal of uncertainty, but the ability to make and defend decisions before they were challenged.
Implications for Companies Building Bio-Based Feedstock Strategies
Companies across industries are converging on the same limited pool of waste- and residue-based feedstocks. Demand can grow quickly. Genuine residue cannot expand independently of the production systems that generate it.
Sourcing is therefore not only a procurement question, but a question of how limited and imperfect materials should be governed. No feedstock is beyond question, and none will work equally well across every product, customer or market.
.jpg)
The companies that move fastest will be those that can manage these complexities by making clear decisions under imperfect conditions and revising them as evidence, markets and stakeholder expectations change.
