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Sustainable Palm Oil

Challenge

Establish sustainable sourcing of palm oil.

Problem

Palm oil is used in a wide range of products from margarine and chocolate to cosmetics and biodiesel. Our consumption of palm oil is growing fast: compared to levels in 2000, demand is predicted to more than double by 2030 and to triple by 2050. Indonesia already has six million hectares of oil palm plantations, but has plans for another four million by 2015, dedicated to biofuel production alone. This growth in demand is driving land use change on a huge scale and in some of the most important ecosystems for the planet’s health. Indonesia was named as the country with fastest rate of deforestation in 2008, a situation that has caused it to become the third largest emitter of greenhouse gases.

Much of the current and predicted oil palm expansion in Indonesia is taking place on forested peatlands. Peat locks up huge amounts of carbon: clearing peatlands by draining and burning them releases huge amounts of greenhouse gases. Indonesia's peatlands cover less than 0.1% of the Earth’s surface, but are already responsible for 4% of global emissions every year. No less than 10 million of Indonesia's 22.5 million hectares of peatland have already been deforested and drained.

Solution

The Roundtable on Sustainable Palm Oil (RSPO) was set up in 2001 to establish clear ethical and ecological standards for producing palm oil. Its members include Unilever, Cadbury’s, Nestlé and Tesco, as well as palm oil traders such as Cargill and ADM. Together, these companies represent 40% of global palm oil trade.

The mission of the RSPO is to:

  • advance the production, procurement, finance and use of sustainable palm oil products
  • develop, implement, verify, assure and periodically review credible global standards for the entire supply chain of sustainable palm oil
  • monitor and evaluate the economic, environmental and social impacts of the uptake of sustainable palm oil in the market
  • engage and commit all stakeholders throughout the supply chain, including governments and consumers.

Benefits

Critical mass to create supply chain pressure for real change in plantation practices

Case study source

Palmoil