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Sustainability

'Palm Oil'

September 21, 2011

This session, chaired by Karlijn van Lierop (Product Board MVO, The Netherlands), addressed the role of the government in sustainable palm oil development, the market uptake of RSPO certified sustainable palm oil and the purchase of sustainable palm oil.

The session started with a presentation of Y.M. Choo, Director General Malaysian Palm Oil Board (MPOB). She presented the role of the MPOB in sustainable palm oil development. She explained that the palm oil industry is very important for development and that the government is committed to ensure that the development of palm oil is done sustainably. For that, they focus on ensuring People, Planet and Good agriculture practices.

Regarding the 'People' aspect she emphasized the role of the Federal Land Development Agency (Felda) that was established in 1956. Felda has the social-economic mandate of developing forest land for the resettlement of the rural and landless poor. The Felda scheme received international recognition to stimulate the development of sustainable palm oil. To safeguard 'Planet' aspects she explained that the Malaysian prime minister has pledged at COP, the Convention on Climate Change in Copenhagen, that Malaysia will strive towards a voluntary reduction of GHG emissions of 40 % in 2020 compared to those in 2005. Furthermore Malaysia pledged during the Rio summit in 1992 to retain at least 50 % of total land under forest. According to 'Good agricultural practices' the focus of the Malaysian government is on:
  • Methane capture to reduce GHG emissions of mills;
  • Recycling biomass with zero burning;
  • EFB mulching; normal application: 30-60 t/ha (mulching increases soil fertility);
  • Planting cover crop;
  • The use of integrated pest management;
  • The conservation of biodiversity: trees.
The Malaysian Palm Oil Board (MPOB) has performed a Life Cycle Assessment (LCA)-study of palm based biodiesel. It was published in International Journal of LCA assessment (3 months ago). The main result of this study was that the palm biodiesel without biogas ensures a 50 % - 70 % reduction compared to fossil fuels. The MPOB continues to encourage the producers to establish Methane Captures. The average costs are: 2 million US dollar/ plant.

Mrs Choo finished by highlighting the MPOBs future plans to further improve sustainability of industry. She mentioned eight points:
  1. Accelerating replanting of old palms: When trees are older than 25 year: 100 % of the hectare should be replanted. This results in replanting 125.610 ha per year.
  2. Improving the Fresh Fruit Bunches (FFB) yield of smallholders: Average FFB yield should increase from 19 to 26 FFB/year.
  3. Improving of worker productivity.
  4. Increasing the oil extraction ratio (OER) from 20,5% to 23 % in 2020: Strict quality controls + mill efficiency.
  5. Increasing oil palm yield -> Reduces need to clear new land.
  6. Developing biogas development at palm oil mills.
  7. Developing oleo chemical derivatives.
  8. Create more jobs
Click here to download the presentation.



The second speaker, Hidde van Kersen, Executive Board member RSPO, gave an overview of the current market uptake of certified sustainable palm oil and views on how to reach the RSPO vision of 100% of RSPO certified palm oil in 2015. If RSPO keeps up current pace of certification 17 % of palm oil produced is certified in 2015. The goal of 100 % will only be reached in 2020 or later. This means that if RSPO wants to achieve its vision of 100 % CSPO by 2015, the pace of certification needs to speed up. He stressed that if we want to reach the vision, we need more action in the market during the coming years. For now the demand lags behind the production of sustainable palm oil. IOI plans to have all his estates (18 plantations) certified by mid-2012.

Click here to download the presentation.



The final presentation of Anneke Assink of Friesland Food Campina was about buying sustainable palm oil from a point of view of a food ingredient manufacturer. FrieslandCampina sources RSPO certified segregated palm oil as of 2011. FrieslandCampina wants to source all palm oil fractions and palm kernel oil according to Mass Balance and the rest with certificates.

The full policy of FrieslandCampina concerning sustainable palm oil is:
  • Switch palm oil from conventional to segregated *)
  • Switch palm fractions to mass balance (in future: segregated) *)
  • Switch palm kernel oil to mass balance (in future: segregated) *)
    *) if not available yet: buy mass balance or buy Greenpalm certificates
This ambitious target date of 2011 has been established, because FrieslandCampina wants to contribute to more rapid expansion of sustainable palm oil and further because they want to ensure to have all oil types (incl. fractions, palm kernel oil) in place before 2015. The activities already performed by FrieslandCampina are
  • They sent, in October 2010, a letter to all palm suppliers to get their policy aligned.
  • They gave presentations to sales teams to explain their policy and possible applicable claims.
  • They visit Asian suppliers to explain policy and ask commitment.
  • They get Mass Balance/Segregated specifications in place + adjust Quality Control systems.
  • In December 2010 the first FrieslandCampina plant (Kievit, The Netherlands) was audited and RSPO-SCCS certified;
  • In August 2011 Satro (Germany) plant was audited and certified.
Of course FrieslandCampina has some hurdles to overcome, for instance:
  • Some oil suppliers do not consider sustainable palm oil as focus topic.
  • In some countries FrieslandCampina is only customer as king oil suppliers for sustainable palm oil.
  • In Asia there are less supply chain options available than in Europe.
  • There is a lack of awareness with some customers.
  • Products containing both palm oil, palm kernel oil and/or palm based emulsifiers.
For 2012 FrieslandCampina formulated new actions, namely:
  • RSPO-SCCS certification of other FrieslandCampina plants;
  • On-going discussion with suppliers globally on availability SG/MB oil;
  • Special attention for further roll-out in Asia;
  • Monitor together with suppliers applicable logistic surcharge for SG/MB as critical mass is growing.
Click here to download the presentation.


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