South Korea’s biofuel sector is increasingly reliant on Indonesian palm oil, which is linked to deforestation, peat degradation, land conflicts, corruption, and legality issues. Existing certifications and voluntary commitments have not translated into consistent outcomes on the ground, partly because they focus on individual companies rather than broader landscape-level impacts. This shifts responsibility onto producer countries and leaves Korean end-users exposed to environmental, social, and emissions risks.

As international standards tighten South Korea risks becoming a “leakage market” for high-risk products. Without stronger demand-side safeguards, its biofuel consumption could undermine climate and biodiversity goals and reinforce deforestation-linked supply chains.

Recommendations

Government

1. Require full life-cycle assessment (LCA): Given the international recognition of LCA in addressing the climate crisis, biodiversity loss, and pollution, the government must establish comprehensive LCA-based criteria for biofuels. The greenhouse gas (GHG) emissions assessment must address supply chain emissions, including indirect land-use change. Implementing full LCA standards is the first step to ensure avoiding and phasing out high-risk, high-impact feedstocks.

2. Adopt stringent sustainability criteria: The government must introduce sustainability criteria for biofuels based on standards including, but not limited to, lifecycle GHG emissions, biodiversity impacts, and human rights considerations, in alignment with international climate and biodiversity protection commitments. Compliance must be verified through strong supply chain due diligence, with ineligible feedstocks excluded from counting toward renewable energy targets.

3. Introduce supply chain due diligence regulation: The government must establish mandatory regulations for corporations and financial institutions to conduct environmental and human rights due diligence across their biofuel supply chain. This regulatory framework should include grievance and remedy mechanisms and allow only the products verified as ‘deforestation-free’ to enter the market. Reducing the forest footprint embedded in supply chains would strengthen South Korea's commitments on decarbonization and biodiversity protection.

Corporations

1. Commit to a deforestation-free supply chain: Companies involved in palm oil supply chains must declare and implement time-bound No Deforestation, No Peat, and No Exploitation (NDPE) policy. These commitments must apply across the entire supply chain, with strong monitoring and exclusion policies for suppliers with links to harmful practices, such as deforestation, human rights violations, corruption, and illegality.

2. Implement human rights and environmental due diligence: Given weak enforcement and persistent controversies associated with certified suppliers, companies must enhance supply chain-wide due diligence, rather than continuing to rely on self-reporting and voluntary certification from producers.

   
   For companies and financial institutions, harmful and NDPE non-compliant practices must be monitored, identified and mitigated by strengthening due diligence mechanisms such as transparent, independent assessments, open grievance mechanisms and subsequent exclusion criteria.

3. Enhance risk management and transparency: Companies and financial institutions involved in biofuel supply chains must integrate deforestation, biodiversity impact, and all related GHG emissions into their risk management and disclosure frameworks. This requires systemic risk identification, exposure assessment, and transparent reporting of supply chain and financial risks, as well as mitigation actions aligned with international disclosure norms.