Monthly Archives: January 2012

Palm Oil Biodiesel Rejected

It’s all over the news this week – the US Environmental Protection Agency (EPA) announced that palm oil biodiesel doesn’t meet the greenhouse gas emissions reduction level required to be used as an alternative to petrol-based diesel fuel.

To produce their results the EPA takes into consideration the emission and energy inputs for fuel production, alongside the change in land use needed to use palm oil as a feedstock.  Their results found that palm oil produces a 17% reduction in greenhouse gas emissions, however the law requires that a biodiesel produces a reduction of 20% when compared to traditional diesel fuel.

These results from the EPA however lean largely on assumptions about how the biodiesel fuels are actually being produced. Obviously every plantation operates slightly differently, therefore a sustainable palm oil production plant will have a significantly lower level of emissions than that of a standard plantation.

The EPA will continue to look for new forms of biodiesel with lower greenhouse gas emissions. However we’re starting to see a real increase in the amount of sustainable palm oil production plants recently – which provides a good chance that the emissions footprint of palm oil could become even lower in the future. Be sure to continue support for sustainably sourced palm oil in the products you purchase.

Palm Oil: GreenPalm Brokerage Fee Reduction

GreenPalm, the leading certificate trading programme supporting the production of sustainable palm oil, has reached a new milestone and as a result have reduced their brokerage fees once again. Back in August 2011, the palm oil certificate trading programme, had a brokerage reduction to $1.50. From January 1st 2012 all palm oil certificate trades will carry a reduced brokerage fee of $1 per certificate!

What benefits does this brokerage fee reduction provide? Put simply, it allows for an even more cost effective solution for those supporting sustainable palm oil. One of the biggest barriers to entry for companies to join in and support sustainable palm oil is the cost. With a lower base cost comes an increase in demand. This is great news for sustainable palm oil, as all of us would like to see production be 100% sustainable.

Here’s a rundown of GreenPalm’s brokerage fee history:

  • September 2008 – October 2009 $3 fee
  • November 2009 – July 2011 $2 fee
  • August 2011 – December 2011 $1.5 fee
  • January 2012 – Onwards $1 fee

At the end of 2011 GreenPalm & the RSPO also managed to reach another impressive landmark – the 3 millionth certificate, since the trading programme began in September 2008. What does this mean exactly? The RSPO gets $3 million back, which it then puts towards funding work, such as the upcoming independent smallholder project. Also the 3 million tonnes of RSPO certified palm oil which has been sold thanks to GreenPalm, has managed to result in huge premiums of over $20 million back to a range of RSPO certified producers, which averages at around $6.80 per certificate. Impressive numbers!

For more information about GreenPalm and their sustainable palm oil certificate trading programme be sure to visit – http://www.greenpalm.org

Palm Oil – Low or High Yield?

It has been said that high-yield palm oil plantations minimize the amount of deforestation, however a recent article published by ‘Environmentalresearchweb’ suggests that this is in fact incorrect. Instead they claim that a study has revealed data which shows that high-yield farming of palm oil actually increases the amount of deforestation than that required for low-yield farming techniques.

A study in the area of the Ucayali region showed that palm oil plantation expansion was 102.3 square km between the years of 2000-2010, of which 80% was due to low-yield plantations. What’s interesting is that only 30% of these low-yield plantations were actually due to forest conversion, compared to a huge 75% of the high-yield plantations. The team then calculated that if this entire palm oil plantation expansion area was high-yield plantations, then 64% less land would  have been required to produce the same amount of crop. However instead a 58% larger area of forest would have been destroyed as a result.

Why is this you ask? The reason is believed to be due to high-yield palm oil farm techniques usually being done by private companies, who have the capital to afford land which hasn’t been cleared in the past. However low-yield farmers usually work as individuals and as a result can’t afford these expensive regions of land, and instead purchase local land-tenure areas.

From this interesting article it’s safe to say that maybe more higher-yield plantations isn’t the way to go, however lower-yield plantations end up using larger amounts of land. Hopefully a balance will be struck, as the issue of forest destruction is one which must be taken seriously.

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Fears over Malaysian Palm Oil

Many analysts are fearing a drop in the worldwide production of palm oil. Malaysia is the second largest producer of palm oil in the world, falling just behind Indonesia. These past few months have seen vast amounts of rainfall, which have had a direct impact on the palm crops. Last year November saw 15% more rainfall in Malaysia than normal across the country. Not only that but Perak, one of the largest palm oil production areas of the country, saw 134% of their standard expected rainfall.

Palm oil sees the largest amount of worldwide production for any edible oil. Of course this makes it vital that the production of palm oil continues to go smoothly. Sadly this month exports of palm oil from Malaysia dropped by around 3% with production dropping by a whopping 10%. Malaysia exported 1.66 million metric tons of palm oil in November, and only 1.49 million in December.

Analysts feared that the above normal levels of rainfall would cause issues with the production of palm oil, and as a result palm oil futures increased by 9.3% in the final quarter of 2011.  The Independent Forecasting Service for Oils, Oil World, said the decline in stockpiles “supported palm oil prices in recent weeks, coinciding with fears that excessive rainfall may magnify the seasonal decline of palm oil production in Malaysia in the near term.”

With the economic situation currently looking poor it’s extremely important that palm oil production stays smooth and that demand is met.

[Source]

Palm Oil – 9th Roundtable Meeting

The RSPO held their 9th Annual Roundtable Meeting (RT9) on the 22nd to the 24th November last year. They achieved a record attendance of over 1000 people from over 30 countries across the globe. Many interesting debates were had, on heated issues and subjects. With some topics seeing contrasting point of views with others having everyone agree unanimously. One thing that was sure is that the event helped raise awareness for sustainable palm oil production.

Yang Berhormat Tan Sri Bernard Giluk Dompock, Minister of Plantation Industries and Commodities of Malaysia, said in his poening speech that “Malaysia will continue to undertake measures towards making the palm oil industry environmentally friendly”. This is great news for palm oil production, as Malaysia is one of the world’s largest suppliers of palm oil.

The RSPO aims to continue to raise awareness of sustainable palm oil. If consumers become more aware and supporting of it then parties will be forced to source their palm oil in a sustainable manner. In June 2011 the RSPO launched a trademark scheme which displays a label on product packaging, for consumers to easily see which products contain sustainably sourced palm oil. The RSPO believe this will be incredibly successful in increasing demand for sustainable palm oil.

In 2008 the RSPO certification of palm oil production began. Since this, over 5 million tonnes of production capacity have been certified. These numbers are an amazing achievement, however there’s still much work to be done. The RT9 managed to be a great platform for industry leading figures and various other palm oil related parties, to discuss a range of important topics.

You can download all of the RT9 presentations here – http://rt9.rspo.org/c/presentations/

For more information about palm oil be sure to visit Greenpalm.org