environment & sustainability

Palm Oil and Sustainability debate, a brief perspective

Certification of palm oil is required to meet the standard of sustainability. Concerns about the impacts of palm oil led to its standardization, but regulators must weigh whether they are justified. Palm oil is usually extracted from the plantations of Indonesia and Malaysia. The problem associated with its production is the claim by non-governmental organizations (NGOs) that the production of these palm oils leads to massive deforestation. Moreover, the 2019 forest fires in the rainforests led to the destruction of biodiversity. There are several roundtables that monitor and consider the impacts caused by palm oil production and their mitigation measures. There are also standards related to palm oil, International Sustainability and Carbon Certification, compliance which ensures the sustainability of palm oil. 

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Hardly any other natural product is as controversial in Europe as palm oil. And yet it is the most widely used cooking oil in the world, from margarine to biscuits, from soap to soups. It is also found in biofuel. The food industry consumes about 70% of the world’s supply. The global market for palm oil is currently estimated at around €55 billion ($60 billion) and is expected to reach a market value of €80 billion by 2021. By comparison, the European biodiesel market is estimated at €9 billion per year. According to the Malaysian government, 74% of Malaysia’s agricultural land is used for palm oil production. About 600,000 small farmers depend on the palm oil industry; they own 40% of the land used for palm oil plantations. But the industry has come under fire in recent years from environmental activists and consumers, who blame it for forest loss and fires, as well as the exploitation of workers.

Image source: satelligence.com

In recent years, great strides have been made in the sustainability and traceability of palm oil. Technology is a disruptive entity in terms of this development. Blockchain, IoT, gene editing etc. are emerging areas of interest in ensuring sustainable palm oil supply. Deforestation is a serious and complex issue that requires industry-wide collaboration to increase transparency, engagement, direct supply chain involvement and capacity building across the supply chain. Emerging technologies like blockchain could have a transformative impact on the palm oil industry – not only by creating near-perfect transparency in the supply chain, but also by creating value for its stakeholders, both upstream and downstream.

Livelihood and land use in rural Malaysia have undergone several changes in recent years. The rapid increase in oil palm cultivation has been associated with high rates of deforestation and loss of biodiversity. On the other hand, oil palm development has boosted the national economy and aims to promote socio-economic development in rural areas.

Palm oil is an incredibly efficient crop, producing more oil per land area than any other comparable vegetable oil crop. Globally, palm oil provides 35% of the world’s vegetable oil demand on only 10% of the land area. To produce the same number of alternative oils such as soybean or coconut oil would require between 4 and 10 times more land, which would only shift the problem to other parts of the world and threaten habitats and species. Furthermore, palm oil is a crucial crop for the GDP of emerging countries. There are millions of small farmers who make their living from the production of palm oil.

Nearly 40 per cent of oil palms are grown by small farmers, smallholders in Malaysia who cultivate plantations ranging in size from 4 to 40 hectares contribute to livelihood, employment, and economic stability. Malaysia is not a haven for industrial giants but a normal households that depends on agriculture like any other agrarian society.

No matter how hard you try to cover up the truth or suppress the facts, the true nature always comes out. So, it is with palm oil. For years palm oil has been in the spotlight, it is as if it has been demonised so much around the world that it is now confusing what is the truth and what is not. In this short article we will explore this from a health perspective. The global COVID -19 pandemic has led to increased consumer concern about food safety and nutrition. Golden Agri-Resources (GAR), one of the world’s largest palm oil-based agribusinesses, has stepped up its efforts to dispel misconceptions, this article is inspired by it.

Image Source: www.thestar.com.
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Plantation Industries and Commodities Minister Datuk Dr. Mohd. Khairuddin Aman Razali said in a statement that the additional levy of RM2 per tonne on CPO and crude palm kernel oil came into effect and will be used to support the establishment of a new consortium platform to promote mechanisation and automation in the industry. This is the “Mechanisation and Automation Research Consortium of Oil Palm” (MARCOP).