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Industry warns that cutting down on palm oil can do more harm than good

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New rules to stop deforestation caused by palm oil production can only succeed if brands and consumers buy larger amounts of oil certified as green and ethical, industry officials and environmental activists have explained.

The Kuala Lumpur-based Roundtable on Sustainable Palm Oil (RSPO) adopted new standards this month which include bans on cutting down forests or converting peatlands for oil palm plantations, and greater protection for labour and land rights.

Although Palm oil is the world’s most widely used edible oil, the industry has come under close scrutiny in recent years and it has been blamed for forest loss and fires, as well as the exploitation of workers.

Facing pressure to lock down standards from investors, buyers and retailers, the RSPO has faced the task of trying to appease members with different interests at a critical time for the industry.

“The new RSPO is transforming the production of palm oil (but) where is the similar action in transforming the buying of sustainable palm oil?” explained Simon Lord, chief sustainability officer at Malaysia’s Sime Darby Plantation. “It isn’t there.”

Palm growers have claimed that it will cost more money to adhere to the new rules and that to justify the outlay, big brands and others need to ramp up demand for RSPO-certified palm oil.

Sustainable palm oil accounts for about a fifth of global production, at an estimated 12.3 million tons per year, and is sold at a premium — but demand only covers about half of supply.

While the new standards represent “a big leap forward” on environmental and social commitments, the risks of failure will be high without a fresh push to boost demand for certified palm oil, said Carl Bek-Nielsen, chief executive director of Malaysia-based United Plantations.

“Now it’s all about pushing demand and uptake. If that doesn’t happen … this great movement could disintegrate,” Carl commented, who is also co-chair of the RSPO.

For more information visit www.rspo.org.