The impacts of climate change are no longer a distant phenomenon, but a reality the global community experiences every day. With record temperatures rising every year, actions to curb greenhouse gas emissions are more imperative than ever.

Human-caused greenhouse gas (GHG) emissions, or activities that reduce nature’s ability to absorb GHGs, are a major contributor to global climate change. Following the energy sector, which is responsible for 75.6% of GHG emissions, the agriculture sector, such as livestock and crop cultivation, contributes a total of 11.6%.

Agricultural production, including oil palm cultivation, are both a vector and victim of climate change – not only do they contribute to GHG emissions, they are also directly impacted by it.

Mindful of these challenges, the Roundtable on Sustainable Palm Oil (RSPO) has developed an approach to help its members address this by adapting production systems to cope with climate change and hastening efforts to reduce GHG emissions. RSPO’s broad-based approach incorporates the following actions on climate change emissions: avoidance, wherein growers are required to identify, assess and estimate carbon stocks thoroughly prior to any new oil palm development; sequestration, adopting a zero tolerance approach to planting on tropical peatlands; mitigating, prohibiting and monitoring the use of fire in land preparation; and minimising emissions by identifying and calculating GHG emissions risks and implementing plans to lower these levels. 

Despite the critical need for climate change action, the commitment to embrace sustainability principles in the use and production of palm oil has not gained momentum in all sectors of the palm oil industry, namely the feed sector.

The most common ingredients used in the feed sector are palm oil, palm kernel expeller (also known as palm oil cake), palm fatty acids distillates and palm stearin. The production of biofuel from grain has contributed to a price increase in food and traditional feed ingredients. This has made the concept of feed production from grains more challenging, leading to the sourcing of palm kernel expeller which is also labelled as a cost-effective material for the feed formulation.

In recent times, the RSPO has observed a growing trend in global certified sustainable palm kernel expeller (CSPKE) volumes, starting with the first physical shipment of CSPKE to Europe in 2021. However, uptake is still in the single digits at 5%. Choosing to source these ingredients through supply chain models that adhere to strict RSPO Standards is a great way for animal feed producers and traders, meat and dairy producers, as well as retailers to support GHG reduction efforts.

Using palm oil residue, as the primary by-product of palm kernel oil (PKO) extraction as an initiative for “waste-to-wealth” conversion helps not only to reduce the environmental impacts associated with waste management but also strengthens profitability, effectively creating a circular economy.

RSPO has developed a tool for its members to monitor GHG via the RSPO PalmGHG Calculator, which enables oil palm growers to estimate and monitor their net GHG emissions and allow them to easily identify and reduce troublesome areas in their production chain. It is primarily a risk tool, calculating the most significant aspects that contribute to emissions based on the concession and operational profile of the unit – including fertiliser use, fossil fuel consumption, peat oxidation and Palm Oil Mill Effluent (POME), while offsetting savings from crop and conservation sequestration. 

Using the PalmGHG calculator, oil palm growers can establish their own benchmarks. They can then analyse these against the annual trend of quantified GHG emissions to reduce the amount and implement more sustainable practices based on the sources of their GHG emissions that they have identified.

The PalmGHG Calculator has been designed using the approach of Life Cycle Assessment (LCA), based on LCA International Standards that provide a universal framework for evaluating the environmental implications of a supply chain. 

RSPO’s current strategy for emissions through PalmGHG addresses Scope 1 (direct emissions owned or controlled by a company) and some portions of Scope 2 (indirect emissions that are consequences of a company’s activities).

While RSPO is aware of and takes into account Scope 3 emissions, it also recognises the challenge to fully include all components. However, there may be a chance for a small amount of inclusion –up to the level of a palm oil refinery– on an optional basis (RSPO 2022 Impact Report).

The results of the first detailed Life Cycle Assessment (LCA) study comparing RSPO certified and non-certified palm oil production shows that RSPO Certified sustainable palm oil has a 35% lower global warming impact and a 20% lower biodiversity impact from land use changes compared to non-certified palm oil produced in Indonesia and Malaysia.

A comprehensive study comparing the environmental impact of RSPO Certified versus non-certified palm oil was conducted between 2017-2019. The impact categories were identified for palm oil production: global warming, biodiversity impact from land use changes, and respiratory inorganics.

Jannick Schmidt and Michele De Rosa, LCA consultants from Denmark, found that the main reasons for the 35% lower global warming impact (GHG emissions per kg of RSPO certified palm oil) were due to:

1- A lower share of peat soils under certified palm oil leading to lower CO2 emissions;

2- A higher share of POME from certified oil treated with biogas capture leading to lower CH4 emissions;

3- Higher yields and better nutrient utilisation for certified Fresh Fruit Bunch (FFB) leading to lower N2O emissions; and

4- Higher yields (and part of landbank set aside for nature conservation) for certified FFB leading to lower CO2 emissions.

The study also states that the three impact categories are significantly addressed in the RSPO Principles and Criteria (P&C). Jannick added, “The results of this study could not be more timely. Globally, but particularly in Europe,the environmental impacts of palm oil production are largely centred around GHG emissions and biodiversity.We hope that these results will help inform a wider group of stakeholders that we should be pushing for sustainability over a boycott of palm oil,” he said.

The animal feed sector can play a pivotal role in combating climate change by sourcing RSPO Certified sustainable palm oil. RSPO has three physical supply chain models that ensure certified sustainable palm oil or palm kernels enter the supply chain:

 The Identity Preserved (IP) supply chain model assures that the RSPO Certified sustainable oil palm products delivered to the end user are uniquely identifiable to a single RSPO certified IP mill with its supply base.

 The Segregated (SG) supply chain model assures that RSPO Certified sustainable oil palm products delivered to the end user come only from RSPO certified sources (composed of a mix of IP products).

 The Mass Balance (MB) supply chain model allows for mixing of RSPO and non-RSPO certified sustainable oil palm products at any stage in the supply chain, provided that overall site quantities are controlled.

The MB supply chain model allows farmers to place certified sustainable fresh fruit bunches on the market, even when facilities are unable to store and transport both the conventional and certified sustainable palm oil separately, and when the certified material alone fails to meet the minimum quantities required for the operation of the plants. This physical model is very important for market segments such as for the feed sector where the uptake of CSPO is still in its infancy.

When a physical supply chain is not available, RSPO Credits are a viable alternative. RSPO Credits are a virtual trading mechanism that rewards farmers for sustainable agricultural practices by creating a market for them even when they are unable to put their physical supply through a certified supply chain. RSPO Credits can be purchased from independent smallholders or from mills. (Read in last month’s edition how the feed sector is transforming the market one credit at a time).

RSPO’s innovative mechanisms and digital tools have enabled the palm oil sector to demonstrate transparency and traceability in its responsible production practices. The collective efforts made along the supply chain, especially in the sourcing of sustainable PKE, open the path for a more sustainable and responsible approach to palm oil and feed production specifically, leading to a more environmentally friendly and socially responsible future.