Deforestation Risk Assessment for Palm Oil Supply Chains

Updated 2026-11-02 · 4 min read · By the akar.earth specialist team

Deforestation risk in palm oil supply chains: how to assess Indonesian mills and plots for EUDR, from peat and forest proximity to agents, fire and legality.

Deforestation risk assessment for a palm oil supply chain means scoring each mill’s supply base and each supplying plot for the chance that fruit came from land cleared after 31 December 2020 or was produced illegally, then verifying and mitigating the high-risk cases before oil ships to the EU. Under the EUDR the final decision is plot by plot, but mill-level risk tells you where to look first.

Two levels of assessment

Mills draw fruit from a local radius because FFB must be processed fast. That makes the sourcing area a meaningful unit of risk. But the EUDR does not accept averages. A mill with 95% verified plots still cannot claim the remaining 5% are compliant without evidence.

Risk factors specific to palm oil in Indonesia

Proximity to forest. Supply bases bordering natural forest, especially in Central, West and East Kalimantan, Riau and Papua, carry more risk of new clearing. Mills in long-settled areas of North Sumatra or Lampung usually carry less.

Peat. Oil palm on peat raises deforestation, fire and legality concerns. Indonesia’s peat protection rules restrict new planting and drainage on peat. See peat restoration rules.

Fire. Burned land can be planted months later. A burn scar in 2021 followed by oil palm is a red flag.

Agents and outside fruit. The higher the share of FFB bought through agents from unknown farmers, the higher the risk of mixing.

Forest estate overlap. Plots inside kawasan hutan raise legality questions, even if planted before 2020.

New mills. A mill built recently in a frontier area usually means a supply base still expanding.

Company group behaviour. Deforestation by another company in the same group may not change a plot’s status, but it affects buyers’ risk view and their own policies.

Country context. The Commission’s country benchmarking category for Indonesia sets the baseline level of due diligence.

A practical scoring approach

1. Screen the sourcing area. Draw the mill’s realistic sourcing radius and measure forest, peat and recent loss inside it.
2. Screen every known plot. Use satellite data from before and after the cut-off date. See satellite verification.
3. Check traceability gaps. Compare FFB volume received with the yield potential of mapped plots. A large gap means unmapped supply.
4. Check legality layers. Forest estate, moratorium map, protected areas, concession overlaps.
5. Score and rank. High, medium or low per plot and per mill.
6. Verify high-risk cases. Field visits to confirm planting dates and land use.
7. Decide. Exclude, mitigate or accept, and record why.

Mitigation options

• Exclude non-compliant plots and agents from EU-bound volume.
• Set up direct purchasing from registered smallholder groups.
• Monitor supply bases with near-real-time deforestation alerts and act on new alerts within weeks.
• Commission independent verification for high-risk mills.
• Engage with suppliers on no-deforestation commitments and land legalisation.

Where risk assessment and carbon data meet

The same layers used for palm risk, forest cover, peat depth, canopy height and change over time, are used to set baselines for REDD+ and peat projects. Companies with conservation set-asides inside their concessions may find that the data built for EUDR monitoring also supports conservation finance. See drivers of deforestation in Indonesia for context on how oil palm expansion has interacted with other drivers.

Common mistakes

• Using a global tree cover loss layer without distinguishing replanting from clearing.
• Assessing only own estates and ignoring third-party fruit.
• Treating certification as proof of low risk for every plot.
• Doing a one-off assessment and not monitoring afterwards.

Using national and certification data

Several data sources help palm risk assessment: ISPO and RSPO certification status of mills and estates, published concession maps, peat maps, the indicative moratorium map, and national commodity and land cover datasets. RSPO members have made concession maps and grievance logs public, which helps buyers. Use these layers to prioritise, but do not let them replace plot screening. A certified group can still receive fruit from an uncertified smallholder plot cleared in 2022.

Next steps

Risk assessment feeds directly into palm oil due diligence. For the full topic map see the EUDR hub. We screen mill supply bases plot by plot and follow up in the field; see our EUDR compliance services or message us on WhatsApp.