Association : Proposal will stop new expansion & growth

06/11/2009 (The Star Online), Petaling Jaya - The decision by oil palm planters to reject the proposal by the Roundtable on Sustainable Palm Oil (RSPO) to adopt the greenhouse gas (GHG) criteria into its existing principles and criteria (P&C) reflects their stance on the need to fully understand the mechanics of the GHG proposal and its implications on the industry.

RSPO is an international body which aims to develop and implement global standards for sustainable palm oil.

“Should the GHG criteria be adopted into RSPO’s P&C, it will only allow very low tonnage of carbon emission for every tonne of crude palm oil (CPO) produced,” said Malaysian Palm Oil Association (MPOA) chief executive Datuk Mamat Salleh.

“Planters must realise that in the context of GHG criteria, the cost of production of palm oil is calculated based on how much carbon is used or emitted instead of how many ringgit per tonne,” he told StarBiz yesterday, referring to the carbon intensity of palm oil that is derived from the crop’s “life-cycle assessment.”

 "It will stop new expansion and future growth of oil palm cultivation", says Malaysian Palm Oil Association Chief Executive Datuk Mamat Salleh on RSPO’s proposal.

Mamat said the carbon cost of production of palm oil was relatively high compared with the threshold proposed by RSPO, which would have deemed the current palm oil production as “not sustainable”.

MPOA represents about 130 members, including major palm oil companies such as Sime Darby Bhd, Kuala Lumpur Kepong Bhd, IOI Corp Bhd and Felda, with a combined total of about 1.76 million ha.

Of Malaysia’s total oil palm hectarage of 4.3 million ha, 2.5 million ha are owned by the estate sector (MPOA included) and the remaining by smallholders.

At the recently concluded RSPO 6th General Assembly, MPOA and its Indonesian counterpart, GAPKI, jointly rejected the draft resolution on the adoption of GHG criteria by the RSPO GHG Working Group.

On RSPO’s proposal that new planting of oil palm be taken in areas of very low stock carbon, Mamat said: “This means that even logged over forest areas and degraded peat lands whose carbon stock is above the RSPO threshold level cannot be developed for oil palm.

“It will stop new expansion and future growth of oil palm cultivation. Companies with large land banks or countries with large potential areas suitable for oil palm will then be adversely affected.”

He also questioned the pressure for palm oil to meet the GHG criteria when “there are no food items in the world” that faced the imposition of similar criteria.

Mamat noted that MPOA, for now, had been able to stop the GHG criteria at RSPO level.

“We sat down for days with the manufacturers, retailers and NGOs in the RSPO technical committees, executive board and the general assembly to fight against incorporating GHG into the sustainability criteria,” he said.

However, the MPOA and the palm oil industry may find it harder to fight or negotiate in other international arenas.

The EU and its Joint Research Committee are set to impose the GHG criteria early next year for biofuel and possibly later for food in the next three years.

In addition, the Intergovernmental Panel on Climate Change (IPCC) in Copenhagen will next month discuss GHG issues.

While many do not expect the IPCC to be successful, Mamat noted that the NGOs would have materials and avenues to campaign against palm oil using GHG issues in addition to the orang utan biodiversity agenda.

“It will be a big challenge for RSPO members as well as the entire palm oil industry to address the carbon issue on climate change,” he acknowledged.