Palm Oil Sustainability: An Inconvenient Truth

When did the attacks start and why are they continuing?

As far back as the 1980s, the palm oil industry first came under fire when international environmentalists became aware of, and brought to the attention of governments and public at large, of the vast destruction of tropical rain forests in order to plant oil palm.

The Earth Summit also known as the “UN Conference on Environment and Development” in the year 1992 (some 25 years ago) in Rio de Janeiro, Brazil, raised awareness of deforestation linked to climate change. Since then, oil palm cultivation has gained prominence as an important contributor to climate change by way of land use change including deforestation and cultivation on peatlands.

Then in 2002, the Malaysian government initiated the Biomass Power Cogeneration in Palm Oil Industry (BIOGEN) project which was supported by UNDP and the Global Environment Facility (GEF). Through this project the government and the industry learnt of the big potential to reduce the carbon footprint of palm oil production through the energy content of its biomass residue at the palm oil mills.

During the COP15 Climate Change Conference 2009 at Copenhagen, Denmark, the Prime Minister pledged that “Malaysia is adopting an indicator of a voluntary reduction of up to 40 percent in terms of emissions intensity of GDP by the year 2020 compared to 2005 levels.”

Six years ago, reports surfaced suggesting that palm oil has a potentially carcinogenic contaminant in particularly high levels. Thanks to the reports, the government and industry got together and are now working together towards adopting processing technologies that aim to reduce or eliminate the contaminants in palm oil.

Then last year (2016), against the backdrop of the Paris Accord on Climate Change, the French government wanted to raise taxes on Malaysian palm oil. But the Malaysian government managed to save the day by lobbying and this proposal was eventually defeated in the French parliament.

More recently, a resolution by the European Parliament has called for the European Union, EU to phase out – by 2020 – the use of vegetable oils in biodiesel that are allegedly produced in an unsustainable way, converting rainforests or peatlands into oil palm plantations. The resolution further calls for development of a single certification scheme to guarantee that only sustainably produced palm oil enters the EU market. This resolution particularly targets palm oil and might affect the exports of palm oil to Europe and eventually other developed countries.

Lately, France has declared that the use of palm oil as a source of biofuel will be restricted.

Thus the whole episode has been a debacle for decades since the 1980s and throughout this time the palm oil producers have dismissed these environmental concerns as trade issues.

Is the Western consumers’ imposition of restrictions on palm oil consumption justifiable?

It is clear that Western consumers are acting out of their concern for the adverse impact on environment and climate change by their consumption of palm oil, since they tend to have higher levels of general environmental awareness. Their quest for environmental protection and food safety has been to-date largely ignored by the producers.

The stick and carrot approach has not worked with the palm oil producers.

To some extent we may label the resolution as discriminatory because all the palm oil that goes into Europe will need to have a European certificate but, importantly, one which will not be required for other oils. Perhaps this is because the other vegetable oils do not involve land use change such as deforestation and cultivation on peatlands which are the main culprits of high carbon emissions.

With increasing global demand for vegetable oils for both food and biofuels, we cannot escape from the question of what raw materials are the most competitive ones from an environmental standpoint. Application of nitrogen fertilizers is by far the most important source of greenhouse gas (GHG) emissions in production of feedstock for biofuels, as long as land use changes are not part of the analysis. While palm oil has high nitrogen productivity, land use change by way deforestation and cultivation of oil palm on peatlands, unfortunately, far negates the productivity of nitrogen in this crop in terms of high carbon footprint.

When peatland is cleared for plantations, the underlying peat needs to be drained, releasing GHG into the atmosphere, which in Malaysia averages very high emission rates of above 55 tonnes CO2 eq per hectare per year contributing to climate change. These carbon dioxide emissions will continue for decades until all the carbon is exhausted through the emissions, adding to the carbon footprint account of palm oil production.

Malaysia will be badly affected if the European Parliament resolution comes into being. The government and the palm oil industry are shocked. Why target palm oil when we claim we too are serious about sustainability because didn’t we come up with the Malaysian Sustainable Palm Oil (MSPO) certification which will be made mandatory in 2019? In fact the industry is pinning a lot of its hopes on the MSPO. In addition, we have never ceased to point out 56% of the land area in Malaysia is under natural forest cover. After all, carbon and biodiversity conservation correlates closely with our national Sustainable Development Goals and addressing climate change.

With all this affirmative action under our belt, why then is the Malaysian palm oil industry today still largely linked to deforestation and the extinction of endangered wildlife such as orang utans, tigers and elephants?

Between the COP15 Conference at Copenhagen in 2009 and the COP21 Paris Accord on Climate Change in 2015, that is, in a short span of just about 6 years, the planted area of oil palm has increased by a whopping million hectares as government statistics indicate. We do not know the extent of natural forest felling or peatland drainage involved in the increased planted area.

Could it be that the western world doesn’t buy the fact that more than half of our country’s forests are reserved and gazetted for protection? Why should this be the case? Could it be perhaps that the ground realities via satellite images tell a different story?

Despite the industry’s rhetoric, one wonders if there is a coalition of political and agribusiness interests that are putting “profits” well ahead of “planet” despite all the sloganism spewed?

To be fair, the western world does acknowledge and has always acknowledged that the palm oil industry has played a pivotal role in developing countries such as Malaysia, Indonesia, Latin America and Africa, contributing not only to vital export earnings but also lifting farmers and smallholders out of poverty.

So why this backlash from Europe now? Aren’t they supposed to be our friends? It would appear that Europe’s grievance perhaps has something to do with not just the overall degradation of the planet in general, for example the pollution of rivers, depletion of biodiversity and loss of habitats and species, but something that can and would affect them directly. Case in point – carbon emissions. An ounce of carbon emissions from the Malaysian palm oil industry has the power to have a detrimental effect on global warming that can hit any country, since we all share the same air space, be it Asia, Europe or the US. No one will be spared.