- Palm Oil Imports Found to Extend Beyond Food Use into Industrial and Energy Sectors
- Transparency and Accountability Concerns Raised Amid Expansion of Biofuel Feedstock Supply Chains by Korean Refiners and Trading Companies
- Transparency and Greenhouse Gas Concerns Surrounding Jeju’s Bio-Heavy Oil Power Plants Also Revisited
The Alliance for Resource & Climate Justice Center (ARC Center, hereinafter “ARC Center”) has published a new issue brief titled “Analysis of South Korea’s Palm Oil and Palm Oil Derivatives Import Structure Over the Past Decade: An HS Code-Based Approach by Processing Stage” The brief analyzes South Korea’s palm oil import structure by reconstructing import data according to processing stages and primary uses, based on customs import statistics reported between 2016 and 2025.
Palm oil generates a wide range of derivatives and by-products through refining, fractionation, and chemical processing. In international trade systems, these materials are classified under different Harmonized System (HS) Codes. In South Korea, discussions on palm oil imports have largely focused on HS 1511 (“Palm Oil and Its Fractions”), which includes crude palm oil (CPO) and refined/fractionated palm oil products. However, chemically modified oils, industrial fatty acid-based materials, and biodiesel are categorized under separate HS Codes.
Based on customs-reported trade data, ARC Center analyzed imports of eight major palm oil and palm oil derivative product groups, including: ▲Crude Palm Oil (CPO, HS 1511100000) ▲Refined, Bleached, and Deodorized Palm Oil (RBDPO, HS 1511909000) ▲Palm Olein (HS 1511901000) ▲Palm Stearin (HS 1511902000) ▲Palm Kernel Oil (HS 1513291010) ▲Chemically Modified Fats & Oils (HS 1516202020) ▲By-products & Chemical Feedstocks (HS 3823199000) ▲Biodiesel (HS 3826000000).
The analysis found that cumulative imports of selected palm oil and palm oil derivatives reached approximately 9.01 billion kilograms between 2016 and 2025. Annual import volumes remained relatively stable at around 700–800 million kilograms between 2016 and 2023, before increasing to approximately 1.08 billion kilograms in 2024 and 1.11 billion kilograms in 2025.
In terms of supplier countries, Indonesia accounted for approximately 47.6% of cumulative import volume, while Malaysia accounted for 46.1%, meaning the two countries together represented approximately 93.7% of total imports. The ARC Center noted that South Korea’s palm oil and palm oil derivative supply chains are therefore heavily dependent on Indonesia and Malaysia.
Among individual product groups, RBDPO (HS 1511909000) accounted for the largest share, representing approximately 33.3% of total import volume. This suggests that South Korea’s palm oil import structure relies more on importing already refined and processed oils and intermediates, rather than importing CPO for domestic refining. RBDPO and palm olein imports showed particularly high dependence on Malaysia. In the case of RBDPO, Malaysia accounted for approximately 55.2% of imports, while Indonesia accounted for 44.4%, with the two countries together representing nearly 99% of total imports.
In contrast, Indonesia accounted for a larger share in product groups more closely associated with industrial and energy uses, including palm stearin, chemically modified fats & oils, and by-products & chemical feedstocks. In particular, the “By-products & Chemical Feedstocks” (HS 3823199000) accounted for approximately 31.2% of total import volume, making it the second-largest product after RBDPO. This HS Code is a broad product group that includes palm oil by-products used in biofuel production, such as PFAD, PAO, and POME, as well as various industrial fatty-acid-based materials. Within this product group, Indonesia accounted for approximately 51.2% of imports, while Malaysia accounted for 37.4%, together representing approximately 88.7% of total imports.
Biodiesel (HS 3826000000) showed the most significant change in import structure in recent years. Initially dominated by imports from the Netherlands and Indonesia, the market shifted rapidly after 2021 as imports from China expanded sharply. By 2025, Chinese imports accounted for approximately 96% of total biodiesel imports. In Europe, concerns have recently been raised over the possibility that palm-oil-based feedstocks may have been falsely declared and traded as used cooking oil (UCO), as well as broader weaknesses in supply chain traceability systems for Chinese biodiesel imports.
ARC Center also highlighted the recent expansion of South Korea’s biofuel industry. Korean refiners and trading companies are expanding biofuel supply chains linking plantations and refining facilities in Indonesia. Last November, GS Caltex and POSCO International announced the completion of palm oil refining facilities in Indonesia and plans to expand biodiesel feedstock supply chains.
Meanwhile, palm-oil-based biofuels are also being used in the power sector. Jeju Island currently operates South Korea’s only bio-heavy oil power plants, where concerns have been raised over feedstock supply chain transparency as well as air pollutant and greenhouse gas emissions.
The palm oil industry has long been associated with environmental and social controversies, including deforestation, land conflicts, and labor and human rights violations. ARC Center noted that biofuel sectors such as biodiesel and bio-heavy oil face additional challenges in tracing the actual origins and processing pathways of feedstocks due to imports routed through third countries and the complexity of HS Code structures. ARC Center also pointed out that the lack of disclosure regarding feedstock composition by domestic biofuel companies and power generators further limits supply chain transparency.
Hyelyn Kim, Executive Director of ARC Center, stated:
“This analysis is meaningful in that it reconstructs palm oil flows—previously recognized mainly as food-use products—according to processing stages and primary uses, revealing how they are connected to broader industrial and energy sectors.”
She added:
“Going forward, it will be necessary to more closely track major importing companies and industrial sectors by product groups in order to identify which industries in South Korea are most heavily linked to imported palm oil and palm oil derivatives.”
Kim also emphasized:
“As Korean companies continue expanding biofuel supply chains linking plantations and refining facilities in Indonesia, stronger monitoring and accountability mechanisms are needed for environmental and human rights impacts across overseas operations and supply chains. The Jeju bio-heavy oil case also demonstrates the need to examine air pollution, greenhouse gas emissions, and feedstock disclosure issues associated with domestic biofuel use.”