Do You Know What Is In Your Renewable Diesel? What Are Feedstocks?
Let's start with what's true for all HVO: when it burns, the CO₂ released is biogenic - it was recently absorbed from the atmosphere by living organisms, and it simply returns there. Under Australia's National Greenhouse Accounts (NGA 2025), the Scope 1 CO₂ combustion factor for renewable diesel (paraffinic diesel) is zero. Every litre of HVO, regardless of feedstock delivers that same Scope 1 benefit under NGER reporting.
So where does feedstock matter? Upstream. In the lifecycle story. In Scope 3.
In the context of renewable fuels, a feedstock is the raw material used to produce the fuel. The EU's Renewable Energy Directive (RED III) - the world's most developed regulatory framework for sustainable fuels - classifies feedstocks by their origin and sustainability credentials. Waste and by-product feedstocks such as used cooking oil and animal tallow are classified as advanced or second-generation feedstocks under Annex IX of the Directive, recognising their superior credentials over virgin crop feedstocks like palm oil.
The International Sustainability and Carbon Certification (ISCC) system - the global standard for verifying sustainable fuel supply chains - uses the same classification framework to audit and certify feedstock origin across the full chain of custody.
Three feedstocks. Very different upstream stories.
Most HVO produced and sold globally is made from one of three feedstock categories. Two of them - used cooking oil (UCO) and tallow - are waste and by-product streams. The third - palm oil and its derivatives - is not.
UCO and tallow are waste and by-product streams. They exist whether or not they become fuel. The emissions from cooking that oil or raising that cattle are allocated to the food system - not the fuel. Their upstream carbon footprint is minimal, and there is no land-clearing, no new crops, and no competition with food agriculture to account for.
Palm oil is a different category. It is grown at industrial scale, often on land cleared from tropical forest or drained from peatland in Southeast Asia. Those land-clearing emissions - known as indirect land-use change (ILUC) emissions - can be so significant that in some scenarios, palm-based biofuel performs worse than the fossil diesel it replaces on a full lifecycle basis. That is not a fringe position: it is the reason the EU's Renewable Energy Directive (RED III) has mandated the phase-out of palm oil from biofuels by 2030, classifying it as high-ILUC-risk.
Indirect Land-Use Change (ILUC) occurs when growing crops for fuel displaces food or feed production - pushing that agriculture onto new land, often cleared from forest or peatland. The emissions from that land conversion are attributed to the fuel.
California's Low Carbon Fuel Standard - one of the world's most rigorous carbon accounting frameworks - assigns 71.4 gCO₂e/MJ of ILUC emissions to palm oil and zero to UCO and animal fats like tallow. Waste feedstocks don't trigger new land clearing, so they carry no ILUC penalty.
The emissions difference between feedstocks is well-documented across multiple independent research groups. A peer-reviewed lifecycle analysis published in Environmental Science and Technology (Xu et al., 2022), using data from the US Department of Energy's GREET model, found that converting tallow and UCO to renewable diesel achieves GHG reductions of 79-86% compared to petroleum diesel.
A 2025 lifecycle analysis published in the journal Fuel (Ajeeb et al.) modelled HVO production across four scenarios. UCO with renewable electricity achieved a global warming potential of just 0.304 kg CO₂eq per kg of HVO. Palm oil with grid electricity reached 0.748 kg CO₂eq/kg HVO - more than double - using the same production process.
Palm Oil In Disguise
It's worth being precise about what "palm-derived" means in the HVO market today. Virgin palm oil has been largely phased out of European HVO following RED III. What has taken its place are palm residues - primarily Palm Fatty Acid Distillate (PFAD), a refinery by-product, and Palm Oil Mill Effluent (POME), a wastewater by-product of palm milling. Both are classified as residues and therefore more sustainable than virgin palm oil on paper.
In practice, this is where the integrity problem sits. In April 2025, Transport & Environment - a leading European clean transport research organisation - published findings showing that nearly twice as much POME was being reported in European HVO production as is physically available globally. The implication is that a significant volume of what is labelled as palm residue is more likely virgin palm oil or other undisclosed materials. EU member states including Ireland, Germany and Belgium have raised formal fraud concerns. The story has since escalated: in early 2026, Indonesian POME suppliers faced criminal arrests in connection with biofuel fraud investigations.
| Feedstock | Origin | ILUC Risk | Lifecycle GHG vs Fossil Diesel | EU RED III |
|---|---|---|---|---|
| Used Cooking Oil (UCO) | Waste | Zero | 79–86% reduction | Preferred |
| Tallow | By-product | Zero | 79–86% reduction | Preferred |
| Virgin palm oil | Grown crop | High | Can be worse than fossil diesel when peatland is cleared | Phase-out by 2030 |
| Palm residues (POME/PFAD) | Residue | Disputed | Variable / contested | Under scrutiny |
Australia Is Moving - And Feedstock Transparency Is Coming
Australia's regulatory framework for renewable fuels is moving at pace. The Guarantee of Origin scheme, NGER's market-based reporting for renewable liquid fuels introduced from July 2024, and the forthcoming Low Carbon Liquid Fuels program will all require greater feedstock transparency. Businesses that understand the difference between feedstocks now - and source accordingly - will be ahead of that curve rather than scrambling to catch up.
RD2Go sources HVO produced exclusively from used cooking oil (UCO) and tallow - waste and by-product feedstocks, not virgin crops. There is no palm oil, no POME, and no PFAD in our supply chain.
Our fuel is ISCC certified, meaning the full chain of custody from feedstock origin through to delivery has been independently audited. It meets the lifecycle GHG reduction thresholds required under international sustainability frameworks, and carries a Scope 1 combustion factor of zero under Australia's NGA 2025. The upstream lifecycle emissions reflect the waste-based nature of the feedstock - not a best-case estimate built on contested ingredients.
When you buy HVO from RD2Go, you know exactly what it is made from. That is the point.
The combustion story is the same for all HVO. The upstream story is not. That distinction is worth understanding before you buy.
Related RD2Go Articles & HVO Information
→ HVO and Carbon: How Renewable Diesel Reduces Emissions Across Every Scope
→ Fossil Diesel, Biodiesel, HVO & SAF: What's the Difference?
→ FAQ: Diesel, the Middle East Crisis & HVO - Explained
Disclaimer: This article was published May 2026. For general informational purposes only; not financial, procurement or investment advice. Scope 1 combustion factor: Australian Government, National Greenhouse Accounts Factors 2025, DCCEEW. NGER market-based reporting: Clean Energy Regulator, NGER legislation amendments 2024-25. UCO and tallow as HEFA feedstocks: CSIRO, Opportunities and Priorities for a Low Carbon Liquid Fuel Industry in Australia, 2025. Guarantee of Origin for LCLFs from 2026: Australian Government, Low Carbon Liquid Fuels Consultation Paper, Department of Infrastructure. Lifecycle GHG reduction figures (79-86%): Xu et al. (2022), Environmental Science & Technology, DOE GREET model. UCO vs palm oil upstream GWP: Ajeeb et al. (2025), Fuel Vol. 390 (open access). ILUC emissions values: California Air Resources Board, Low Carbon Fuel Standard (2024 amendments). EU RED III palm oil phase-out: European Commission Renewable Energy Directive III (2023). Feedstock classification: ISCC System and EU RED III Annex IX. POME fraud findings: Transport & Environment, Palm Oil in Disguise, April 2025.