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Big palm oil companies move forward on carbon study

An illegal oil palm plantation established within a protected forest area in Sumatra, Indonesia
An illegal oil palm plantation established within a protected forest area in Sumatra, Indonesia. Photos by Rhett Butler.

Seven palm oil giants have agreed to fund a study that will define what constitutes “High Carbon Stock” (HCS) forest, a move that will potentially determine the fate of ecosystems around the world as more companies commit to “zero-deforestation” policies based on the amount of carbon stored in vegetation.

The companies — IOI Corporation Berhad, Kuala Lumpur Kepong Berhad, Sime Darby, Asian Agri, Musim Mas Group, Cargill and Wilmar International — are jointly funding the year-long study, which will be overseen by British environmentalist Jonathon Porritt, John Raison of Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), and economist James Fry.

The HCS study underpins the Sustainable Palm Oil Manifesto (SPOM), a commitment signed by six of the seven funders plus palm oil trader Apical. SPOM sets criteria for greener palm oil production, including barring conversion of forests and peatlands for plantations, as well as creating traceable palm oil supply chains. SPOM is significant because other companies outside the palm oil sector, including logging giant Asia Pacific Resources Limited (APRIL), have committed to ceasing deforestation once there is an industry standard definition of high carbon stock areas.

Oil palm plantation in Riau

Some environmental groups, including Greenpeace and Rainforest Action Network, have been highly critical of SPOM, arguing that it has loopholes that make it weaker than agreements signed by Indonesian palm oil giant Golden-Agri Resources (GAR) and fiber producer Asia Pulp & Paper (APP). But Wilmar, which isn’t a member of SPOM but has made a similar commitment to GAR and APP, is part of the new HCS study, signaling that the process for establishing the standard is being taken seriously.

Backers of the HCS assessment say it will include not only social and environmental criteria, but also economic factors.

“A team of socio-economic experts will assess the impact of adopting varying HCS forest thresholds on the developmental needs of local communities and governments in the same regions,” stated a press release issued July 30. “The report will recommend threshold values for what constitutes HCS forests, taking into account environmental concerns, regional socio-economic contexts, and the practical considerations in developing and managing economically viable oil palm plantations.”

Palm fresh fruit bunch

The economic component may raise concerns among some greens in that it potentially creates opportunities for companies that want to convert areas that by pure strict measures would be classified as having high carbon value.

But Porritt suggested that “building common ground” is critical to moving forward for the palm oil sector.

“This study will help to shed light both on the biophysical and on the socio-economic dimensions of that critical area of enquiry, taking a fully integrated approach in order to address the concerns of all stakeholders, including those of NGOs, local communities, smallholders and governments,” he said in a statement. “The Steering Committee will have a critical role in overseeing this study, building common ground across the entire value chain to help define HCS values and thresholds. This is a highly significant move forward for the palm oil industry, and it should be rapidly emulated by others in the agricultural sector.”

Palm fruit

GAR, APP, and Wilmar currently use 35 tons of aboveground carbon as to define HCS areas. That number, which comes from the average carbon stored in an oil palm plantation over its 20-30 year lifecycle, typically sets a bar between “old scrub” and secondary forest as the cut off for converting an area to a plantation. GAR has already set aside parts of concessions in New Guinea, Borneo, and elsewhere that stored substantial amounts of carbon.

All three companies have also committed not to covert peatlands of any depth for plantations. These stipulations apply to the plantations they own directly as well as supplier estates.

For its part, SPOM member Sime Darby, says it also has in place a no new planting on peat policy.

“Sime Darby has a no new planting on peat policy which has been in place even before the discussions on the manifesto started,” a company spokesperson told “The manifesto’s commitment for no new planting on peat is with immediate effect and is regardless of peat depth.”

Sime Darby added that SPOM members have agreed to apply the criteria across all operations.

“The commitment to no deforestation and protecting peat areas will apply across the entire supply chain of all Manifesto Signatories. This includes smallholders and outgrowers from whom the Signatories source fresh fruit bunches (FFB) and other palm products,” the company said. “Signatories have also pledged to promote the principles of the Manifesto in plantations where they do not have controlling stakes. Subject to any legal requirements, Signatories will not do business with serious repeat violators of the RSPO’s principles and criteria.”

Forest clearing for oil palm in Malaysian Borneo

The push to include carbon data in plantation development is a response to growing concerns about the impact of palm oil production on tropical forests and peatlands. Over the past 20 years, roughly 4 million hectares of forest in Indonesia, Malaysia, and Papua New Guinea has been converted for oil palm plantations, releasing vast quantities of carbon into the atmosphere and endangering charismatic animals like orangutans, rhinos, and elephants. While expansion has brought economic opportunities for communities and domestic companies, it has also exacerbated social conflict and encouraged abusive labor practices in some areas.

Yet despite the concerns, rapid growth of the industry is expected to continue. Oil palm plantations represent the most profitable form of rural land use across much of the tropics and palm oil is a key ingredient in a wide variety of products, including processed foods, cosmetics, and cleaning agents. It is also increasingly used as a biofuel.

Given the inevitability of expansion, most environmentalists have focused their campaigns on pushing new oil palm development toward non-forest land, rather than outright boycotts of the oilseed. To do this, they have targeted big Western buyers of palm oil, encouraging them to establishing sourcing policies that are now being adopted by palm oil producers.

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