Neste Oil, a Finnish energy giant, has announced a new “no deforestation” policy [PDF] for sourcing palm oil. The company, which is one of the world’s largest buyers of palm oil, had faced criticism from environmentalists for purchasing palm oil potentially linked to rainforest and peatland destruction in southeast Asia.
Under the new policy, Neste will not buy oil from plantations that clear rainforests, peat swamps, or protected lands. It will also not source from areas that were converted from natural grasslands after January 2008 until the E.U. comes up with a definition of “highly diverse” grassland.
“As one of the world’s largest buyers of vegetable oil, we recognize the responsibility we bear for the direct and indirect impact of our operations,” said Simo Honkanen, Neste Oil’s senior vice president of sustainability and HSEQ, in a statement. “Our cooperation with TFT is a natural continuation of our earlier efforts aimed at helping prevent deforestation and developing proactive dialogue with our stakeholders. As a major company in the field, we have a unique opportunity to support the development of sustainable practices in the palm oil production area.”
Rainforest clearing for palm oil production in Borneo in 2012. Photo by Rhett A. Butler
Neste’s policy will be implemented and monitored by The Forest Trust (TFT), an environmental group that recently signed supply-chain agreements with Golden-Agri Resources, one of Indonesia’s largest palm oil producers, and Asia Pulp & Paper, a forest products giant.
Neste says it will only purchase biofuel or biofuel feedstock from sources that “are fully traceable back to the point of origin”; “support the Free, Prior and Informed Consent of indigenous and local communities for activities on their customary lands”; avoid conversion of High Carbon Stock (HCS) and High Conservation Value (HCV) areas; and “protect and properly manage peatlands”.
Notably, Neste’s forest policy goes well beyond the standards set by the Roundtable on Sustainable Palm Oil (RSPO), a multi-stakeholder body that establishes criteria for “greener” palm oil, but doesn’t specifically exclude deforestation. Scott Poynton, TFT’s Executive Director, has been openly critical of the RSPO’s lack a “no deforestation” standard. Accordingly, last year Poynton pulled his group out of the RSPO over the issue.
“Under the RSPO standard, you can deforest, you can cut down secondary forest, you can clear peatlands,” Poynton told REDD-Monitor. “Far from companies saying we will buy RSPO oil and be sustainable, you can still be cutting down valuable forest, peatlands, secondary forest.”
Rainforest clearing for palm oil production in Borneo in 2012. Photo by Rhett A. Butler
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