Malaysian Solution for ‘Greener’ Palm Oil

The 28 countries that make up the European Union (EU28) imported more than 7 million tonnes of palm oil in 2014. This represented about 70% of all oils and fats imported by the economic bloc (Figure 1).

Figure 1: EU28 oils and fats consumptionSource: MPOC

What does the EU do with that much palm oil?

By now you would know that palm oil and its derivatives go into anything from washing detergent and lipstick to shampoo and candles. It is a major ingredient in many of the things we eat. It makes your favorite chocolate spread yummy, keeping it from melting at room temperature. It also enriches animal feed.

There is growing demand for palm oil as a source of energy. It is used for heating in some cases. But the bulk is for biodiesel that feeds the compression-ignition engine so popular in European cars.

The use of biodiesel in the EU is controlled through policies with the fundamental objective being to increase the percentage of renewable energy sources. The region follows this policy for environmental reasons, such as the reduction of greenhouse gases and of local pollution by exhaust emissions.

Figure 2: EU28 – Consumption of vegetable oils, 2014 (mil tonnes)

Source: Oil World Annual, 2014 & 2015

There are many reasons for the prominent position of palm oil. Its physical characteristics make it the ingredient of choice in many food applications. It enables a broad range of applications at an attractive price. Its use in kitchens is well accepted, especially in the countries of central and eastern Europe.

There is another justification for the widespread use of palm oil: the productivity of the oil palm. It yields about five times more oil per hectare of land than, for instance, rapeseed. For soybean, the comparison is roughly 10:1.

To replace the orange section in Figure 3, you would have to multiply the land used for rapeseed cultivation by four or five times. This is a virtual impossibility in the EU where competing demands for land are more intense than in most parts of the globe.

Figure 3: EU28 – Palm oil imports from major producers, 2014 (percentage)

Sources: Oil World Annual 2014 & 2015; MPOC Brussels

Greener palm oil

Malaysia supplies no less than 33% of the EU’s palm oil imports, second only to Indonesia. The oil palm has become a pillar of Malaysia’s economic development, providing a steady stream of export revenue and improving the livelihood of citizens.

It stands to reason therefore that nobody with a stake in the industry would want to destroy it. Sustainable production of palm oil is in Malaysia´s best interests. Malaysians have not only learnt to keep an eye on protecting the environment. They are also further along than most other producers of palm oil in accepting that sustainability is the key to the future.

The Malaysian government and palm oil industry have long implemented measures for the sustainable management of land used for oil palm cultivation. At the UN Earth Summit in Rio de Janeiro in 1992, the country had committed to retaining 50% forest cover over its landmass. It has kept its promise. No small achievement.

Plantation owners go the extra mile to protect the environment in which they operate. Sustainable practices include a ‘zero burning’ policy pioneered in 1985. Another is application of mulch from the fruit wall surrounding the kernel to re-fertilise the soil. This cuts down the use of chemical fertilisers.

On plantations, rodents like the common rat cause considerable damage to oil palm fruit. So growers have introduced barn owls to keep the rat population in check while reducing the use of pesticides.

All the principal players in the Malaysian palm oil industry are members of the Roundtable on Sustainable Palm Oil. Its certification is the widely accepted international standard for sustainable palm oil.

The Malaysian government is adding to the volume of responsibly produced palm oil. It has introduced the Malaysian Sustainable Palm Oil (MPSO) standard, to enable the participation of smallholders. The first MPSO licences were issued in January 2015, thereby continuing the evolution of sustainable palm oil – for the benefit of Europe and the rest of the world.

Figure 4: Malaysia – Evolution of sustainable palm oil