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As one of the largest producers and exporters globally, oil palm has become Malaysia’s most valuable agricultural crop

THE urgency to decarbonise has never been greater. While crude palm oil prices are projected to trade at a healthy RM5,000 per tonne in the first half of 2022, palm oil’s climate impact – deforestation, draining of peat swamps, land clearance by burning, biodiversity loss – is less rosy.

In Malaysia and Indonesia, greenhouse gas (GHG) emissions from oil palm-driven land conversion alone have reached a staggering 1.4% of the global aggregate, bringing it on par with global emissions from the aviation industry. Given this reality, integrating climate action across palm oil supply chains is a critical step towards achieving net-zero status by 2050.

The human population is expected to reach 9.8 billion by 2050. To meet projected vegetable oil demand, oil palm-harvesting land will predictably double – from 14.6 million ha in 2019 to 31.1 million ha by 2050.

However, the current suitable oil palm climatic zones will shrink 22% by 2050. This could lead to the migration of oil palm cultivation to replacement land, triggering deforestation and biodiversity loss in new ecosystems. Unsustainable land conversion of this scale will further deepen the climate crisis.

These are sobering predictions which put Malaysia’s palm oil industry at a crossroads.

As one of the largest producers and exporters globally, oil palm has become Malaysia’s most valuable agricultural crop. Avoiding or replacing it is not a feasible solution; establishing a sustainable life cycle is. To achieve the commitments made at the United Nations Climate Change Conference 2021 (COP26) and align with global trends in decarbonisation, Malaysia will need to ramp up production and consumption of certified sustainable palm oil.

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The message to the industry is clear: decarbonise now.

Why certified sustainable palm oil makes sense

Against the backdrop of rising edible oil prices in Asia, achieving net-zero may seem like a challenging process. But palm oil is undeniably the most efficient vegetable oil crop on the market. It meets 40% of the global demand yet only occupies 6% of the land used to produce vegetable oils.

Replacement oils need between four and 10 times more land to produce the same yield. That places a burden on the environment, displacing wildlife, exacerbating deforestation and accelerating habitat loss.

As we can see, palm oil per se is not the problem. If cultivated sustainably, palm oil can help combat the world’s climate and biodiversity crises, and be part of the solution to the growing food security needs of a global population.

Comprehensive and inclusive certification schemes, such as the Roundtable on Sustainable Palm Oil (RSPO), mitigate environmental and social issues and ensure that demand is met sustainably. Several studies have sought to quantify the environmental impacts of palm oil certified by the RSPO. A LifeCycle Assessment finds that RSPO certified sustainable palm oil (CSPO) emits 35% less GHG emissions and is associated with a 20% lower impact on biodiversity compared to non-certified palm oil.

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