Before reading about olive oil classification it is important to understand how it is regulated. The International Olive Oil Council (IOC) is an intergovernmental organization based in Madrid, Spain, with 23 member states. It promotes olive oil around the world by tracking production, defining quality standards, and monitoring authenticity. More than 85% of the world's olives are grown in IOC member nations. The United States is not a member of the IOC, and the U.S. Department of Agriculture does not legally recognize its classifications (such as extra-virgin olive oil). The USDA uses a different system, which it defined in 1948 before the IOC existed. The California Olive Oil Council, a private trade group, is petitioning the USDA to adopt IOC rules.
The IOC officially governs 95% of international production and holds great influence over the rest. IOC terminology is precise, but it can lead to confusion between the words that describe production and the words used on retail labels. Olive oil is classified by how it was produced, by its chemistry, and by panels that perform olive oil taste testing. All production begins by transforming the olive fruit into olive paste. This paste is then malaxed (slowly churned or mixed) to allow the microscopic oil droplets to concentrate. The oil is extracted by means of pressure (traditional method) or centrifugation (modern method). After extraction the remnant solid substance, called pomace, still contains a small quantity of oil.
As of October 25, 2010 the US Standards for Grades of Olive Oil and Olive-Pomace Oil went into effect. As the United States is not a member, the IOC retail grades have no legal meaning in that country; terms such as "extra virgin" may be used without legal restrictions.
The U.S. Department of Agriculture (USDA) currently has a 4 part grading of olive oil based on acidity, absence of defects, odor and flavor:
§ U.S. Extra Virgin Olive Oil for oil with excellent flavor and odor and free fatty acid content of 0.8g per 100g;
§ U.S. Virgin Olive Oil for oil reasonably good flavor and odor and free fatty acid content of not more than 2g per 100g;
§ U.S. Virgin Olive Oil Not Fit For Human Consumption Without Further Processing is a virgin oil of poor flavor and odor;
§ U.S. Olive Oil is an oil mix of both virgin and refined oils;
§ U.S. Refined Olive Oil is an oil made from refined oils with some restrictions on the processing;
These grades are voluntary. Certification is available from the USDA on a fee-for-service basis.