palm oil free

Palm oil alternative or a new business model? Solazyme to supply Unilever 3 million gallons of algae oil for soaps and toileteries

19 October 2015: Palm oil alternative or a new business model? Solazyme to supply Unilever 3 million gallons of algae oil for soaps and toileteries

Editor's note: The peat smog haze is driving up palm oil's coverage in international media  and online. Is the solution a new business model? Better certification? Banks acceding to sustainability rules? Or algal oil? Is 3 million gallons = 13,600 tonnes?
 
Yes, palm oil is destructive — but scientists are creating compelling alternatives September 19, 2015 · 11:30 AM EDT  By Shannon Kellehe; ...Palm oil comes from the clusters of brilliant orange fruit of the tree Elaeis guineensis. It’s grown in plantations that span millions of acres across southeast Asia; companies often clear-cut forests that are home to endangered orangutans and Sumatran tigers to plant these trees. Between 1990 and 2010 an area of forest the size of 2 million football fields was cleared to make way for oil palms. Doug Boucher, director of the Union of Concerned Scientists’ tropical forest and climate initiative, says palm oil presents uniquely sinister problems because “substantial areas of southeast Asia have very carbon-rich soils, peat soils, with sometimes quite thick deposits of peat."..... These dangers of palm oil have caused companies to seek out substitutes. Scientists at the University of Bath in the UK are developing an oil from a common type of yeast that can grow on almost any feedstock. And the California company Solazyme has begun extracting an oil with similar properties from microalgae. Jill Kauffman Johnson, Solazyme’s Global Sustainability Director, says they prepare the oil in much the way other companies brew beer. “We feed sugar to the algae, and then put that all into a large fermentation tank,” Johnson says. “The algae then convert the sugar into oil, and it allows us to produce large amounts of oil in a matter of days.” Solazyme has a contract to supply the sustainability-minded company Unilever with 3 million gallons of this algae oil for its soaps and toiletries. “We’re also finding in a recent study that we’ve had done that has been third-party reviewed,” says Johnson, “the greenhouse gas emission profile with the algae oil produced at our plant based in Brazil, where  he sugar source is sugarcane, has a lower carbon footprint than that of palm oil and palm kernel oil.” But despite palm oil’s problems and the promising alternatives, Boucher says the crop does have some advantages. “It actually accumulates carbon dioxide from the atmosphere in the process of growing. So if you produce it in areas that are not forested, but rather you use already-cleared land, you can actually have a positive benefit from it.”...http://www.pri.org/stories/2015-09-19/yes-palm-oil-destructive-scientists-are-creating-compelling-alternatives

 
Sustainability: Paying farmers and preserving forests 9/16/2015 -  by Jeff Gelski; Barry Callebaut, Zurich, Switzerland, issued its own sustainability report for 2013/14, which found 60% of cocoa farmers in Cóte d’Ivoire are living below the poverty line. Barry Callebaut pays a premium for “sustainable beans,” which it defines as being produced either according to a certification scheme such as Utz Certified or Rainforest Alliance or to Barry Callebaut’s own Quality Partner Program.  Under the Cargill Cocoa Promise, farmers receive a premium by selling Utz, Rainforest Alliance and Fair Trade certified cocoa beans, said Taco Terheijden, sustainable cocoa manager for Cargill Cocoa and Chocolate. Under the Cargill Cocoa Promise, $19 million was paid to farmers in Cóte d’Ivoire, Brazil, Cameroon, Ghana and Indonesia in 2014....As of April, 35% of the palm oil sourced by IOI Loders Croklaan was certified by the R.S.P.O. and traceable to the mill and plantation level, according to the company, a palm oil supplier and R.S.P.O. member with a North American office in Channahon, Ill. IOI Loders Croklaan added 96% of the palm oil and 65% of the palm kernel oil that it sources is traceable to the mill level.   Archer Daniels Midland, based in Chicago and an R.S.P.O. member, issued a commitment to no-deforestation this year. The commitment includes no deforestation of high carbon stock or high conservation value areas, no development of peatlands, and no exploitation of people and local communities. .... Bunge has a global palm oil sourcing policy that involves the protection of high conservation value areas, the protection of peat areas, and the prohibition of forced and child labor.   Cargill provided an update on supply chain traceability for the first half of 2015. Cargill has completed 9 of 11 planned supplier field assessments in its palm oil supply chain. The Forest Trust conducted the field assessments. The goal is to achieve 100% traceability to the mill by December of this year and to provide palm oil that is 100% traceable to sustainably managed plantations by 2020....http://www.foodbusinessnews.net/articles/news_home/Supplier-Innovations/2015/09/Sustainability_Paying_farmers.aspx?ID=%7B035B2B6E-A7D2-46E1-A19F-0415FAC28B71%7D&cck=1

A new business model for palm oil? The recent haze in Southeast Asia has sparked renewed calls for alternatives to palm oil products. In this interview, Forum for the Future founder Jonathon Porritt tells Eco-Business why the industry - which is also provides thousands of livelihoods worldwide - needs a new business model, not boycotts.  By Vaidehi Shah Friday 16 October 2015 http://www.eco-business.com/news/a-new-business-model-for-palm-oil/

Why Sustainable Palm Oil Is Possible by The Nature Conservancy Posted: 10/14/2015 2:36 pm EDT   Updated: 10/14/2015 2:59 pm EDT http://blog.nature.org/conservancy/2015/10/14/why-sustainable-palm-oil-is-possible/

Can REDD save Indonesia’s peatlands from burning?   By Chris Lang 14 October 2015  http://www.redd-monitor.org/2015/10/14/can-redd-save-indonesias-peatlands-from-burning/

Hit companies where it hurts by Henry Barlow Oct 1, 2015, 5:58 pm SGT The contributors to the haze appear not primarily to be the larger oil palm plantation operators but relatively small estates, owning perhaps only one or two mills, or independent mills depending largely, if not exclusively, on fruit submitted from smallholders. Many such operators and smallholders have no wish to comply with sustainability principles. Could the Monetary Authority of Singapore instruct banks operating in Singapore not to extend financing and trading facilities to companies linked to mill owners who are not in compliance with agreed sustainability principles as required by the Indonesian Sustainable Palm Oil (ISPO) or Roundtable on Sustainable Palm Oil (RSPO) standards? These companies should also be required to provide independently certified reports that they have assisted all mill owners and smallholders submitting fruit to their mills in complying with the sustainability principles of ISPO or RSPO. Other central banks in he region could also adopt similar measures. http://www.straitstimes.com/forum/letters-on-the-web/hit-companies-where-it-hurts

 

US soybean sustainability issues and approach

Summary by Khor Reports, 24 March 2014 from presentation by Josiah McClellan; Director of Food Market Issues and Sustainability, United Soybean Board; March 16-18 2014 at National Institute of Oilseed Products (snapshot of key slides in image below).

Interesting to see US soybean industry facing similar issues as palm oil in certification:
  • increasing importance of ISCC
  • "certification fatigue"
  • competition between and within NGOs
  • the need for equivalence
  • problem of “moving targets”…

What's notable is US soybean’s research-based data-intensive approach which includes: a) measure of environmental impacts of US soybean production 1980-2011; b) measurement of efficiency and other performance measures by grower; c) survey for practice adoption intensity by state; d) use of sustainability-yield models and e) focus on industry-scalable approach, addressing key industry priorities and industry collaborative efforts. 


Khor Report comment:

There is increased need for research-data intensive approach for palm oil to tell its story. So far, NGO-led voluntary sustainability certification does little in terms of positive comparatives (e.g. palm oil vs soybean vs rapeseed); much to palm oil's frustration since it does well on many key comparative measures. Indeed, some supply-chain companies wonder if international campaigning has been so successful as to drive some markets toward "no palm oil" (some NGO ratings of "sustainable palm oil" products give the highest ratings for those containing NO palm oil). 

The increasingly popular ISCC (principally for biofuel but with a new food module) method is more comparative given that it's a multi-feedstock certification. Most NGO-led certification look only for internal changes and improvements i.e. no more use of peat and no more deforestation but independent data and impact studies have been notably lagging ten years into the palm oil sustainability movement. NGO-led certification has been critiqued for being relatively blind to national development goals and socio-political fissures in Southeast Asia. In this regard, the current phase of escalating sustainability compliance (silence on premiums implies cost to producers rather than shared benefit of premiums) will undoubtedly include national policy makers as they mediate and negotiate the detailed implementation of what is proposed by NGOs and dominant companies, especially for smallholders (Indonesia regulatory changes are significant in this sphere). At the same time, we hear of corporate interest in expanding resources for more rigorous studies to support palm oil marketing on various features. As such, the approach of competitor oils is pertinent and the US soybean story is worth looking at. The bottom-line? Data. Data. Data.

The difference in palm oil and soybean certification is also notable. Please read our blog posts on comparative differences between the WWF-Roundtables, RSPO and RTRS:
/khorreports-palmoil/2013/02/rtrs-moves-ahead.html
/khorreports-palmoil/2011/10/rspo-vs-soy-roundtable.html
 
 

Deforestation detection, RSPO GHG and trade clashes

Khor Reports comments and views: 


DEFORESTATION DETECTION

All the pieces are falling in place for the global monitoring of deforestation, with the year-end launch of a platform promising near-real time satellite data combined with submitted from-the-ground data. Global Forest Watch 2.0 is an initiative of NGO World Resources Institute, Google, University of Maryland and the UN Environment Program. 

NGOs started using satellite imagery to good effect, to identify open burning incidents in plantation concessions, notably in Sumatra, Indonesia. The plantations generally attributed it to third-party burning on their land (not their doing nor by their contractors) and pledged to try to better police the situation. Open burning in peat land areas has been a key source of the annual haze in Southeast Asia. A series of academic studies of satellite imagery have also shed light on deforestation rates in the region, including peat swamp forest deforestation. It has highlighted interesting regional trends, including those in Sarawak and Kalimantan. 

Satellite imagery studies for high carbon stocks has also been done by Golden-Agri Resources with the aid of sourcing facilitator TFT and a key NGO, Greenpeace. Importantly, this included the ground-truthing of carbon stocks measures of canopies viewed from satellites. In a nasty surprise for the palm oil industry, it found pretty high carbon stocks in what has been loosely called "degraded areas." Bottom-line: even large areas of degraded scrub lands should not be planted.

Also notable in recent writings by international research organisations and in marketing of end products is the wider reference to "deforestation-free commodities." Deforestation detection is likely to be a negative for oil palm extensification (land development) by plantations in higher carbon stock areas. The logical move would be for NGOs to highlight their expansion moves to buyers in developed markets, who are most conscious of sustainability and leery of socio-environmental issues. 


RSPO GHG WILL CHALLENGE GROWERS

In a tough revision of its certification standard for growers, the RSPO will require measurement of GHG emissions from operations and new plantings. Some time will be given to develop these tools, and public reporting will only start 31 Dec 2016. Nevertheless, the implications are obvious and significant for plantations. The new P&Cs will require changes in carbon stocks to be measured against a baseline of land use in November 2005 (dig out those satellite images and peat land maps!). This could generate a list of the biggest net destroyers of carbon stocks in a recent ten year period; such retroactive reporting will also catch those who were less than fulsome in their new planting procedures reporting. Current RSPO grower members, should prepare for potential bad publicity surrounding such retrospective analysis of their land developments.

RSPO defines low carbon stock areas "as those with (above and below ground) carbon stores, that would be lost by conversion to oil palm, smaller than that which would be sequestered within an oil palm crop and other set-aside areas within the management unit over the period of one rotation." 

This is likely to mean: 

     a) low or no peat land development (negating or superseding* Principle 7.4  which allows for non-extensive planting on peat?);
 
     b) usage of the 35 tonnes carbon per hectare ceiling** (the often cited measure of carbon sequestered in oil palm; which Golden Agri has accepted for its pilot scheme) which would supersede* Principle 7.3 on non-usage of primary forest from November 2005); and 

     c) much higher set-asides (i.e. areas not to be developed).

*Why not just rewrite Principles 7.3 and 7.4 if they are set to be superseded by a new measure in Principle 7.8? 

** "The time averaged carbon stock in an oil palm plantation appears to be in the order of 35 tonnes carbon/ha, calculated over... 25-30 years... by various authors using different approaches... " (source: Greenhouse Gas Emissions from Palm Oil Production, Literature review and proposals from the RSPO Working Group on Greenhouse Gases, Final report, 9 October 2009) 

RSPO's new P&C is set to be ratified soon. All RSPO ordinary members will be able to vote on the revised P&C at an Extraordinary General Assembly on 25 April 2013 (Thursday week, in about 10 days time) in Kuala Lumpur, Malaysia. Oil palm growers represent 15.4% of RSPO members. If the other member categories vote by bloc, it is likely that oil palm growers views may be isolated. If palm oil processors vote as a bloc with oil palm growers, these two categories represent 52.4% of members.


Note: These statistics should represent ordinary members, eligible to vote at the EGM.
Source: RSPO website, accessed 5.30pm 14 April 2013
 

TRADE CLASHES
 
On deforestation-free palm oil concerns in end markets, Khor Reports notes that the Ferrero Group has for years been carefully sourcing palm oil from Peninsula Malaysia, a long human use area i.e. plantations there developed many decades ago. However, it faced a negative marketing blitz in the so-called Nutella Wars in France last year. It is interesting to note that it has lodged a complaint against its fellow RSPO members, Groupe Casino and Systeme U on 2 April 2013. In one, Ferrero says that "The complaint is made on ground that the Groupe Casino is undermining the objectives of the RSPO, as enshrined in the RSPO Vision and Mission, and breaching the RSPO Code of Conduct..." It has lodged a similar complaint against Systeme U. 

Palm oil sustainability has been morphing into palm-oil free in some areas. This unfortunate linkage has to be addressed. At the same time, negative health claims still abound. Strategic consultancy, Hill & Knowlton (whose clients include big brands and big banks) has been a key player in global opinion-making on palm oil acceptance recently, just as it was in yesteryear. It had roles in the clash of US soybean interests and Malaysia palm oil over 20 years ago; which ended with 1992 US non-discriminatory legislation which outlawed "no palm oil, no cholesterol" labels and the 1993 US military lifting on its ban on palm oil usage.  


We reckon that the deforestation / high carbon stocks challenge will be heating up, and it will need to be watched. With some serious challenges faced upstream and downstream, many industry players consider this a period of edible oil trade wars.


Announcements & news:

"Global Forest Watch 2.0 will enable users to track deforestation over time, including forest clearing that has occurred within the past 30 days. It will also allow users to submit georeferenced photographic evidence of forest destruction, supporting efforts by journalists and concerned citizens to report on deforestation." source: http://news.mongabay.com/2013/0409-global-forest-watch.html?goback=.gde_2007470_member_231012851

"The Groupe Casino: has initiated a campaign aimed at denigrating palm oil in general as well as products containing palm oil (the tag line of such campaign being "L'huile de palme c'est nul" which can be translated as "Palm oil is rubbish"); is fueling the negative perception of palm oil in France and other parts of the world; has launched a number of palm oil free products under its own brands and promotes them through denigrating statements about palm oil in general as well as through disparaging comparisons with competing products containing palm oil (including Ferrero Group's Nutella), refers to palm oil in a general way without making any distinction between sustainable palm oil promoted by the RSPO and non sustainable palm oil; fails to promote the use of sustainable palm oil; hasn't been willing to resolve the matter despite direct contacts made by the Ferrero Group." source: http://www.rspo.org/en/status_of_complaint&cpid=27 

"The RSPO has revised an existing Criterion on monitoring and reporting GHG emissions from existing operations and developed a new Criterion on minimising net GHG emissions from new planting developments. However, it is recognised that these significant emissions cannot be monitored completely or measured accurately with current knowledge and methodologies. Therefore, growers and millers commit to an implementation period for promoting best practices in reporting to the RSPO and after December 31st 2016 to public reporting against both of these Criteria. During the implementation period the RSPO will further develop and improve the RSPO carbon assessment and reporting tools. Growers and millers make this commitment with the support of all other stakeholder groups of the RSPO. These revisions demonstrate the RSPO’s commitment to developing credible requirements relating to GHG emissions." 

Notably in Principle 5.6: "during the implementation period, growers will start to assess, monitor and report emissions arising from changes in carbon stocks within their operations, using the land use in November 2005 as the baseline. The implementation period for Indicator 5.6.3 is the same implementation period for Criterion 7.8." 

And in Principle 7.8: "Growers are strongly encouraged to establish new plantings on mineral soils, in low carbon stock areas, and cultivated areas, which the current users are willing to develop into oil palm. Millers are encouraged to adopt low-emission management practices (e.g. better management of palm oil mill effluent (POME), efficient boilers etc.) in new developments... Public reporting is desirable, but remains voluntary until the end of the implementation period. During the implementation period until December 31st 2016...Thereafter growers and millers will ensure that new plantation developments are designed to minimise net GHG emissions and commit to reporting publicly on this."

In Annex 2: "Definition of Low carbon stock areas: As per the recommendation of the RSPO GHG WG2 the total carbon emissions (above and below ground) from new developments should ideally not be greater than the carbon which can be sequestered in the period of one rotation over the whole new development (i.e. the average of oil palm, riparian areas, forest set-aside etc.). To help achieve this the expansion of plantations should be on low carbon stock areas (i.e. mineral soils, areas with low biomass etc.) or on land which is in current intensive agricultural or plantation use where the current users agree to its conversion to oil palm. An agreed methodology for assessing and reporting carbon stocks and sources of emissions as well as default figures for estimates of both are being developed by the RSPO. As guidance to growers low carbon stock areas are defined as those with (above and below ground) carbon stores, that would be lost by conversion to oil palm, smaller than that which would be sequestered within an oil palm crop and other set-aside areas within the management unit over the period of one rotation."




More background on the palm oil sustainability movement (upstream impacts) here:


; Just published by ISEAS Perspectives, my paper on the shift of the Malaysia and Indonesia palm oil sectors to sustainability efforts. One group of transnational NGOs, led by the WWF, has pressured large corporate growers as well as multi-national consumer brands to accept Europe-centric voluntary certification standards. Thus, since about 2003, the net impact of various NGO pressures has helped to rein in the speed and prospects for oil palm expansion in Indonesia and Malaysia by large corporate growers. The authorities in Indonesia and Malaysia have reacted by creating their own certification schemes.

UK Easter chocolates rated highest if "palm oil free"


Khor Reports: Sustainable palm oil has become inexorably linked with the rise of “palm oil free.” This is confirmed in the latest “ethical rating” of palm oil usage in consumer products: UK's Easter chocolates in this instance (Easter is just around the corner). Get a high score by various degrees of effort or “RSPO-ness.” Else you could simply opt out of palm oil to get the top score (and never mind the attributes of the ingredient you substitute it with i.e. sustainability, transfat and so forth).

The methodology: “Products are ranked on a scoring system of 1-20....Companies that do not use palm oil or their derivatives score 20 (best score).  Companies that use it but make no substantial policy statements and are not members of the Roundtable on Sustainable Palm Oil score 0.” In addition, there are negative marks for any missing or inconsistent information provided. 

RSPO's Annual Communication on Progress (ACOP) was greatly strengthened last year but it has been hampered by significant non-responses and non-disclosures. This move in consumer product ratings highlights these issues and marks down companies for their lack of full disclosure.

65 products were rated and only 8 get the "green light": Divine Chocolate, Booja Booja, Traidcraft, Co-op Chocolate, Sainsbury's Chocolate, Waitrose, Biona and Plamil.
 In a poll by Retail Active in Easter of 2010, UK children were estimated to indulge in more than 2.5 kg of chocolate over the Easter holiday on average, consuming nearly 13,000 calories and 650 grams of fat (reported here: http://www.telegraph.co.uk/topics/easter/7544878/Easter-2010-Children-gorge-on-2.5kg-of-chocolate.html).  In the USA, Easter was the second most important candy-eating occasion of the year for Americans, who consumed 7 billion pounds of candy in 2011, according to the National Confectioner's Association. In 2012, Americans spent nearly USD2.1 billion on Easter candy (rising to #1 position by sales?), while Halloween sales were over USD2 billion; Christmas, more than USD1.4 billion; and Valentine's Day, over USD1 billion (reported here: http://www.infoplease.com/spot/eastercandy1.html).

Chocolate makers buy specialty fats from palm oil providers in the form of CBE and CBS. To be rated high by ethicalconsumer.org a chocolate manufacturer using palm needs to do the following: be a RSPO member; for all group companies buy segregated sources for all CPO, PKO and palm derivatives used; disclose all relevant data to RSPO, disclose all suppliers and label palm oil in ingredients. The do-nots: provide incomplete or inconsistent information. The alternative, just don't use palm oil to get top marks i.e. go "palm oil free". Back to cocoa butter?  




News: UK Easter chocolates rated on sustainable palm oil. "Consumers are unaware of palm oil content, the campaign says, because of current labelling laws. Palm oil is a key ingredient in many food products – including chocolate and biscuits – but companies are not required by EU law to label products containing it until December 2014. The aim of the campaign is to encourage consumers to buy the best-rated products, forcing those companies that are not taking their environmental responsibilities seriously to use more sustainably sourced palm oil. Divine and Booja-Booja were deemed to have the best overall credentials, with neither using any palm oil in their chocolate products. Traidcraft, Co-operative Food and Sainsbury's also scored very highly. The bottom three chocolate companies were deemed to be Lindt, Thorntons and Guylian. Lindt reportedly supplied inaccurate figures to Ethical Consumer, while Thorntons and Guylian failed to submit any documentation to the organisations that set international sustainable palm oil standards...." http://www.guardian.co.uk/environment/2013/mar/25/easter-eggs-palm-oil

The results of the rating is here: http://www.rainforestfoundationuk.org/palm-oil-database  

Scoring methodology details from www.ethicalconsumer.org:

Companies are scored out of 100 possible points, with 100 being the best score. 
Companies that do not use palm oil or its derivatives score 100. Please note the final score on the tables are given out of 20 by dividing the total by 5.
Companies that use it but make no substantial policy statements and are not members of the RSPO score zero.

50 marks are available for companies' actual palm oil use.  Scores are applied for the companies' use of crude palm oil (CPO), palm kernel oil (PKO) and palm oil derivatives. Of these, 40 marks are awarded to companies that source 100% of their palm oil through RSPO-approved mechanisms for the trade in sustainable palm oil.
Up to ten additional marks are awarded for the proportion of RSPO-certified palm oil that is segregated.
The above certified mechanisms must apply to the companies' CPO, PKO and palm oil derivatives used.  If it only applies to one of these, the mark out of 50 is divided by three.

10 marks are available for each of the following:
  • Companies that make a public commitment to reduce their use of palm oil.
  • Companies whose RSPO ACOP or CSR information in relation to palm oil applies to the whole company group.
  • Companies that disclose their suppliers.
  • Other positive initiatives, such as labelling palm oil where it is used.
  • Companies that disclose the actual volumes used of CPO, PKO and palm oil derivatives.
  • Ten marks are deducted if the information provided by the company to the RSPO is internally inconsistent, or inconsistent with its CSR information provided elsewhere.
  • Five marks are deducted if the information it has provided is incomplete.