Saturday, May 29, 2010

Sustainability: New Market for Certified Sustainable Oils and Fats?

Confusion reigns over certified and uncertified oils

In recent years, the Western Environmental NGOs (WENGOs) together with producers and buyers of palm oil have attempted to promote the development and market for certified sustainable oils and fats products in addition to existing non-certified products. This has resulted in two types of market for oils and fats: the certified sustainable oil market and the market for normal oils that are not certified. The most desirable and ideal market is of course one where the oils and fats products are proven to be sustainably produced. The proof is via a certification and auditing process where the oils or fats which are found to comply with a set of sustainability principles and criteria will be issued certificates attesting to their sustainable production and processing. These products are supposed to be marketed at a premium to meet the needs of sophisticated markets especially in the EU. In the case of palm oil, such products are referred to as Certified Sustainable Palm Oil in general or Certified RSPO palm oil (CSPO) if the RSPO system is used as the basis for auditing and certification. In contrast, the main market is still mostly for non-certified normal palm oil. Such products cannot be marketed as sustainable as the WENGOs will protest that there is no proof of sustainability. Neither can it be labeled as unsustainable palm oil as there is no proof for that either.Unfortunately, Certified RSPO palm oil has received limited acceptance thus far. The available capacity in Malaysia of about 1 million tonnes of CSPO palm oil has not been fully taken up. Only 30 % of the potentially available RSPO palm oil has been exported to the EU. The main excuse is the lack of willingness of the importers to pay a premium to offset the initial cost of certification. To make matters worse, some of the WENGOs are casting doubts on the ability of RSPO members to supply sustainable palm oil.

Biofuel requires inclusion of carbon emission saving parameters

With the world turning its focus onto biodiesel, the scope for sustainability certification is extended to include carbon emission parameters of the biofuel. RSPO was initially designed to serve the food industry, and carbon emission parameters were not included into the assessment system. Authorities for biofuel in the EU and USA want to have their own certification schemes for sustainable raw materials for renewable fuel. The RSPO scheme is deemed insufficient to meet their requirements unless carbon emissions saving figures are included. The RSPO nevertheless is attempting to overcome this deficiency.

The majority (99 %) of palm oil buyers are however, comfortable with the traditional market where palm oil has been traded without the need for a certification system just as other competing oils and fats are also marketed without any form of certification schemes. As other oils and fats are not able to offer certified sustainable products for the market and palm oil is largely also available in the non-certified form, there is some resistance and confusion to the introduction and acceptance of CSPO.

Another problem is the proliferation of potential new certification schemes to be introduced by Germany, the EU and the USA that form part of their national regulations to cater to the biofuel development. These need to be harmonized into an international standard as it is impossible for exporters of palm oil to comply with too many certification schemes. Without harmonization of certification systems, palm oil is not able to fully participate in the biofuel industry in Germany and USA and the certification schemes have essentially become effective trade barriers barring the entry of imported palm oil. In comparison, local raw materials are likely to be exempted from these certification schemes as local farmers are against such additional burden added to their production process.

WENGOs wrongly targeting palm oil

The WENGOs are exploiting the confusion by continuing to spread misinformation to tarnish the image of palm oil. Zoos in Australia have been misled by Friends of Earth (FOE) Australia into believing that orang utans are affected by deforestation due to oil palm plantations. Such allegations are unfounded. As discussed in this blog, orang utan population in Malaysia has stabilized because the country has stabilized its permanent forest area. Pseudo scientists operating some of the Australian Zoos should instead focus on campaigning for the critically low population of the Koala bears in their country. According to the Australian Koala Foundation, the population of Koalas has shrunk from 400,000 to 44,000 in the wild. Loss of habitat is the main reason, and forests are lost to agriculture. Australia has 23 times more land area than Malaysia, but its Koala bear population is only 4 times more than the number of orang utans in Malaysia (of about 11,000). The Australian Zoos are campaigning to help protect the already well protected orang utans in Malaysia while they are neglecting the fate of fast diminishing Koalas in their own country. They claim that Koalas can easily reproduce (to pacify the unaware public) but with declining habitat areas due to frequent fires and conversion to other uses, population growth of the Koalas will continue to decline as reported by the Australian Koala Foundation.

The misguided Zoo authorities in Australia have even lobbied their parliament to pass a law to label palm oil as the cause of orang utan population decline. Unfortunately they have not been fair in not asking their cattle and lamb products to be labeled as causing the decline and possible extinction of Koala bears and aborigines population in their country. It is a fact that cattle emit far more methane gas which cause global warming compared to oil palm plantations in Malaysia. The fact relating to historical land grabs that displaced and impoverished the aborigines in Australia should not be swept under the carpet but should be used to justify the labeling of Australian beef products. Current beef products from Australia are deceptively labeled without declaring the severe damage to global warming caused by methane from cattle, loss of habitat of Koala bears and historical land grabbing of aborigines’ land by beef farmers.

Similar arguments are forwarded by WENGOs in the UK who wrongly blamed oil palm cultivation in Malaysia as a cause of global warming. In truth, oil palm plantations behave like forest plantation by sequestering CO2. Inability to evaluate the scientific facts led to the WENGOs overlooking devastating emitters such as coal mines in their countries in preference for wrongly blaming oil palm plantations in developing countries for emission of CO2 as the cause of global warming. This has led to unjustified demand by many followers of the WENGOs for a stop to deforestation for agricultural development in developing countries.

Wrong assumptions and false allegations can cause devastating consequences especially when actions are taken by powerful developed countries such as the EU, USA and Australia against the interests of poor developing countries. Trade barriers are imposed without considering the big picture of costs and benefits. Malaysia was a net GHG sequestering country up to the year 2005, and deforestation for agricultural development is not an issue, because to a certain limit, deforestation is necessary as part of the sovereign right in the developing process for any newly independent developing country. Yet, a lot of negative campaigning is directed at palm oil on the false allegation that it contributes to global warming when the true fact is otherwise. Oil palm helps mitigate global warming together with the large permanent forest reserves which also provide for habitat need for wildlife such as the orang utans.

WENGOs like Greenpeace should start changing its focus and campaign to shut all the coal mines in its mother country, the UK, where CO2 emission from coal burning is several times more devastating in causing global warming compared to cultivation of oil palm in developing countries. Coal should be replaced with other fuels of lower carbon footprint. The 18 million tonnes of coal mined in the UK annually emits CO2 equivalent to the deforestation of 380,000 hectares of tropical rainforest. In addition, 40 million tonnes of imported coal will further emit CO2 equivalent to another 800,000 hectares equivalent of rain forest deforestation. The total 1,180,000 hectares per annum rainforest deforestation equivalent is about 10 times the annual area of past expansion of oil palm cultivation in Malaysia. While coal mines have a one directional release of CO2 to the atmosphere, oil palm planting sequesters CO2 to compensate for the CO2 released by initial deforestation. Blaming oil palm plantations (a source of livelihood in developing countries) as a cause of CO2 emission while ignoring more devastating sources of CO2 emission is essentially condoning gross wrongdoing in their own countries while unfairly opposing the development of needed legitimate agricultural sectors of developing countries. If global warming is the main concern of the WENGOs, they do not need to look far to find the solution. Campaigning to shut their coal mines, and boycotting the use of coal in their countries will yield far more CO2 reduction and will have least damage to the livelihood of people in developing countries as compared to attacking the oil palm industry.

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