Translated by Mariateresa Tauro
The new European rules on sustainability due diligence intervene at a time when European energy supply chains are becoming increasingly extraterritorial. The issue is not merely about businesses’ ability to comply with a European regulation, but also about the ability to manage supply chains linking European consumers, industrial infrastructure and millions of producers in African countries. In the case of agricultural feedstocks, the raw material for energy originates in agricultural systems characterised by fragmented production, heavy reliance on agriculture and vulnerability to climate change. The ESG issue therefore takes on a geopolitical dimension: those who control data, standards and relationships throughout the supply chain gain a greater ability to manage energy risk as well.
The Corporate Sustainability Due Diligence Directive, adopted by the European Union in 2024, was introduced to integrate human rights and environmental risks into large companies' decision-making processes. The framework was amended in 2026 by Omnibus I: Member States must transpose the amended rules by 26 July 2028, whilst the new provisions are due to apply to businesses from 26 July 2029. The first annual disclosure relating to due diligence is due for financial years beginning on 1 January 2030. The postponement does not solve the problem, but it does give businesses more time to adapt their supply chains. It is, above all, the extraterritorial dimension that alters the nature of compliance. Although it is far from the European market, if an agricultural supply chain based in Kenya becomes part of the value chain of a company subject to the legislation, production conditions, environmental risks, and the treatment of workers become elements of the governance of the European supply chain. The case of Africa is particularly significant because agriculture is one of the main pillars of the economic and social infrastructure of sub-Saharan countries. According to ILO estimates reported by the World Bank, in 2025 around 46 per cent of employment in Kenya was still linked to agriculture, whilst the agriculture, forestry and fisheries sector accounted for around 23.2 per cent of GDP. An investment in feedstock production therefore affects not just a raw material, but a sector that employs almost one in two workers and accounts for almost a quarter of the country’s economic production.
This is where the geopolitical dimension comes into play. If Europe creates stable demand for certain energy crops, it can alter economic incentives, land use and the balance of power within the producing economies. If, on the other hand, it imposes ESG standards without building up local capacity to meet them, it risks making the supply chain accessible mainly to the largest and best-capitalised operators. The agri-feedstock programme developed by ENI in Kenya provides a concrete example of this dynamic: the first agri-hub in Makueni began producing vegetable oil for Italian biorefining in 2022, whilst the model was subsequently expanded through additional infrastructure and a growing network of small-scale producers, involving over 130,000 farmers according to figures published by the company. This figure is significant because it illustrates the scale of the problem: when a European supply chain relies on tens of thousands of small producers, the traditional corporate audit model becomes inadequate. It is unrealistic to think that a centralised bureaucratic monitoring system alone can produce reliable information on agricultural income, working conditions, the use of pesticides, safety, access to land or any instances of child labour. The problem is therefore primarily one of information: it is needed to build the capacity to collect and verify data throughout the entire supply chain, particularly given Africa’s demographic trends. The World Bank estimates that over the next ten years, around 362 million young people will enter the labour force in sub-Saharan Africa, whilst the number of jobs expected to be available will be around 151 million. If the European energy industry builds agricultural supply chains capable of generating local income, facilitating technology transfer and providing market access, these can become tools for economic stabilisation. If, on the other hand, integration remains limited to the export of raw materials, there is a risk of perpetuating a structure in which the greatest value is captured further down the supply chain, whilst producer countries remain exposed to fluctuations in prices, climate and external demand. A second factor relates to food safety. The use of degraded land, catch crops, and agricultural residues can reduce competition with food crops, but this principle must be verified in the field and not merely stated at the planning stage. The impact of an energy supply chain cannot be assessed solely on the basis of the quantity of oil produced or the emissions avoided: the opportunity cost of land, the availability of water, the effects on agricultural prices and the distribution of income along the chain must also be taken into account.
There are two possible strategies. The first is a defensive approach: reducing the number of suppliers and focusing on large, already-certified industrial operators. From a compliance perspective, the advantage is clear: fewer entities mean less information to collect, fewer audits and greater standardisation. However, this strategy shifts control of the supply chain towards the economically strongest operators. Small-scale producers may be excluded because the cost of certification and traceability exceeds their financial capacity. Compliance would thus become a barrier to entry: the supply chain would be easier to manage, but less inclusive and less capable of generating value in the regions where production takes place. The second strategy aims to turn fragmentation into an investment in infrastructure. The company does not squeeze out small-scale producers, but builds a control structure around them through agri-hubs, digital record-keeping systems, agronomic support, training, soil analysis laboratories, satellite monitoring and crop traceability. Technology can create a verifiable record of the supply chain, but it cannot guarantee that the data entered at source is correct; the real investment, therefore, lies in the local capacity to produce reliable information. The most interesting parameter would therefore not simply be the number of farmers involved, but the proportion of the supply chain that is actually traceable, so as to be able to identify which producer supplied the raw material, on which land it was produced, what inputs were used, how much the producer was paid, what the contractual terms were, what checks were carried out and how any breaches were resolved. These indicators should be complemented by social metrics such as producers’ average income, female participation, training, access to financial services and the number of resolved social complaints. In this way, ESG would cease to be primarily a reporting function and would become a system for gathering economic intelligence on the supply chain.
The geopolitical dimension is also evident in the relationship between Europe and Africa. The European Union is not the only player with an interest in Africa’s agricultural resources and energy infrastructure. International competition for markets, raw materials, infrastructure and capital involves numerous external players. In this context, setting high standards can only become a source of European strength if it is accompanied by capital, technology and institutional capacity. Otherwise, European standards may be perceived in partner countries as a unilateral cost for accessing the European market, whilst other investors may impose different requirements. European policy towards African energy supply chains must therefore avoid separating trade regulation from foreign policy. The main recommendation is to develop a model for territorial due diligence, under which European compliance is also funded and organised in the country of production. For businesses, this means investing not only in production capacity, but also in data collection and verification, training for farmers and complaints procedures. For the European institutions, this means complementing regulatory standards with technical and financial support measures, ensuring that sustainability does not become a barrier that excludes small-scale producers from value chains. European energy security is therefore not achieved simply by purchasing more raw materials, but by reducing the vulnerability of the relationships through which those raw materials are produced. The 130,000 farmers involved demonstrate the potential scale of the sector. The 46 per cent share of agricultural employment highlights just how significant its impact on Kenya’s economic fabric could be. The gap between the 362 million people entering the labour force and the estimated 151 million job opportunities, on the other hand, illustrates the demographic pressure within which these projects will have to operate. The real strategic asset will therefore not be merely the vegetable oil produced, but the ability to forge a stable relationship between European capital, African producers, local institutions and international standards. From this perspective, social sustainability becomes an integral part of energy security: a supply chain that generates income, produces verifiable data and maintains a credible relationship with local communities is also less vulnerable to disruptions, protests and political instability.
However, a contradiction remains. Integrating African agriculture with European energy demand can generate income, create jobs, develop infrastructure and open up new markets, whilst at the same time providing Europe with an additional source of raw materials for the energy transition. On the other hand, there is a risk that this very dynamic could turn Africa into an extension of European energy policy, shifting part of the environmental and social costs of the transition outside the Union. The line between development and dependency is therefore not determined by the rhetoric of sustainability, but by the actual distribution of value along the supply chain. A supply chain built solely on the principle of extraction risks perpetuating asymmetrical relationships, with raw materials produced in Africa whilst added value and technology are concentrated in Europe. A supply chain governed solely by compliance, on the other hand, risks becoming so costly that it excludes the small producers it is meant to support. The solution necessarily involves a compromise: greater control, but also more investment; more standards, but also more technology transfer; greater traceability, but also greater local production capacity. Europe cannot expect African economies simply to become reliable suppliers for its own transition without offering an economic relationship that is sufficiently beneficial and sustainable. At the same time, African governments have an interest in ensuring that the race for energy feedstocks does not lead to new dependence on a single market or divert resources away from food security. The fundamental question is not whether sustainability should be imposed or left to the market, but who will bear the cost of the transition, who will reap the benefits, and who will have the power to set the rules. It is in this context that European due diligence ceases to be merely a regulatory issue and becomes a matter of international policy. If it can be channelled into investment, skills and greater local capacity, it will simultaneously strengthen Europe’s energy resilience and the development of producer countries. If, on the other hand, it remains only a system of certification and monitoring, there is a risk of creating supply chains that look flawless on paper but are fragile in the real world.
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