While major microwave popcorn processors in the US have stopped using the chemical, and the labour department has issued strict guidelines for industry, Europe has taken a wait-and-see attitude until the scientific studies are completed.
If diacetyl is eventually found to be harmful to the hundreds of workers in the segment, companies may have to find a replacement flavouring.
Manufacturers use diacetyl to provide a buttery taste in microwave popcorn, and some pastries and confectionery.
US case studies have linked the chemical to bronchiolitis obliterans, a deadly lung disease that began affecting clusters of workers at popcorn manufacturing plants.
Manufacturers and ingredients companies in the US have already paid out millions of dollars in compensation.
In a statement to FoodNavigator.com, the European Food Safety Authority (EFSA) said that it takes the US findings "seriously".
EFSA's scientific panel on food additives and flavourings (AFC ) is already evaluating the chemical along with other flavourings as part of a larger study.
"The experts of the EFSA AFC panel and its working group on food additives will look at this issue to see if new scientific evidence is available that may require further actions," said Ewa Moncure, an EFSA spokesperson.
"If the experts conclude that consumer exposure to diacetyl can reach levels well above those considered as safe and, that a possible health risk for consumers cannot be excluded when inhaling diacetyl, EFSA will give priority to the re-evaluation of this substance and provide detailed scientific advice."
Meanwhile a spokesperson for the Confederation of the Food and Drink Industry in the EU (CIAA) said: "We are following the situation.
The chemical is approved for use in the EU.
As we understand, EFSA is currently evaluating diacetyl and we are awaiting the results of this evaluation."
Steve Chandler, secretary general for the European Snacks Association, said: "Producers and users are very aware of the safety concerns regarding this flavouring and there are in place strict guidelines regarding its safe handling and use."
Meanwhile, some EU popcorn manufacturers that use the chemical for flavouring have set their own safety standards for its handling by workers, while others wait for the EFSA opinion.
One of those taking action is Denmark-based Blomberg, producers of the Popz and Flying Popcorn brands.
The company supplies its brands to about 38 countries.
Sara Risch, a Blomberg spokesperson, said the company uses the chemical for 20 per cent of its popcorn products.
"When there were the first reports of some people from certain plants who had experienced problems, the entire production procedure was reviewed and very strict engineering and personal protection controls put in place," Risch said.
"The popcorn plants that I am familiar with have all put in place the necessary protection."
Risch concluded: " In summary, I think all food manufacturers need to address the use of its flavours in their plants, whether or not they contain diacetyl.
They all need to look at possible points where there is the chance of a large exposure to any flavours or aromas and make sure employees have proper protection and that engineering controls are in place to minimise any exposure."
Some European popcorn manufacturers produce the snack without the addition of diacetyl.
MacCorns popcorn, for example, makes popcorn that is free from all artificial colours, flavours and preservatives.
Christine Wellberry from the Food and Drink Federation said she was unaware of any UK food manufacturers using the chemical.
Diacetyl was last assessed in Europe in 1999 by the former Committee of Experts on Flavouring Substances of the Council of Europe (CEFS), which concluded that it is safe for human consumption at the quantities used.
The assessment looked only at consumption and not inhalation.
Meanwhile in the US concern over the chemical keeps the issue in the limelight, with the threat of lawsuits keeping it on the boil.
In early October the labour department held an industry and consumer consultation on the issues surrounding the chemical.
The department has also issued wide-ranging industry guidelines on how the chemical should be handled to avoid inhalation by workers.
Without waiting for the scientific evidence major US popcorn manufacturers have now stopped using the chemical flavouring altogether, including popcorn giants ConAgra and PopWeaver.
They have been spurred into action by the massive payouts going to affected workers.
Kenneth McClain, an attorney with Humphrey Farrington & McClain in Independence, Missouri, told Bloomberg News recently that since 2001 he has represented about 600 workers with diacetyl claims, winning $52.7 million in jury verdicts against flavoring makers in four cases.
Undisclosed settlements were reached on 120 more and he has another 500 cases filed, he said.
Other US media have recorded a total of $100m in jury awards and settlements, with one injured worker receiving a $20m verdict.
Politicians have also taken notice of the issue.
In September the federal House of Representatives passed an emergency bill requiring all manufacturers using the chemical to ensure greater care is taken in its handling.
US regulators have also launched scientific studies to figure out the causes of the disease, how much exposure is hazardous and what control measures should be put in place.
The issue over diacetyl rose to the fore in 2000 when the National Institute of Occupational Safety and Health (NIOSH) investigated a Missouri popcorn plant and found that a rare lung disease occuring in eight workers was probably a result of the fumes from the chemical flavouring.
"Based on the results of their initial investigation, NIOSH researchers concluded that the bronchiolitis obliterans identified in the eight former employees was most likely caused by occupational exposure to volatile butter-flavoring ingredients," the US labour department stated.
According to NIOSH documents, about 200 workers have since been identified as being made sick with 'Popcorn Workers Lung', and at least three died from the disease.