{"id":104687,"date":"2023-06-19T08:53:15","date_gmt":"2023-06-19T08:53:15","guid":{"rendered":"https:\/\/chinadialogue.net\/?p=104687"},"modified":"2023-07-03T13:56:42","modified_gmt":"2023-07-03T13:56:42","slug":"how-can-palm-oil-reach-net-zero","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/climate\/how-can-palm-oil-reach-net-zero\/","title":{"rendered":"How can the palm oil industry reach net zero?"},"content":{"rendered":"\n

Food systems contribute approximately one third<\/a> of greenhouse gas emissions, and are therefore a crucial focus in global efforts to slow climate change.<\/p>\n\n\n\n

Palm oil, the world\u2019s most widely used vegetable oil, could play a key role in these efforts, with improvements in its production having potential to bring significant emissions reductions. Although palm oil production has faced intense scrutiny due to its connection with deforestation, recent developments indicate that progress has been made.<\/p>\n\n\n\n

According to Trase, a commodity transparency initiative, palm-oil-related deforestation in Indonesia has been decreasing for almost 10 years<\/a>, despite growth in production. Malaysia has experienced a similar trend. These two countries produce about 85% of the world\u2019s palm oil.<\/p>\n\n\n\n

The United Nations\u2019 climate change convention has emphasised the importance of decoupling agricultural production from forest loss, stating that ending deforestation<\/a> will be critical to achieving global net-zero emissions by 2050.<\/p>\n\n\n\n

The Council of Palm Oil Producing Countries, an intergovernmental body led by Indonesia and Malaysia, asserts that the industry is on track to achieve net zero. Some industry experts even believe this goal can be reached by 2040<\/a>, a decade before the UN\u2019s target. However, it is essential to consider the necessary actions for palm oil producers, companies and countries, and examine the integrity of their commitments to meeting this challenge.<\/p>\n\n\n\n

What is net zero and what does it mean for companies?<\/h2>\n\n\n\n

The Paris Agreement, adopted in 2015, aims to limit global warming to well below 2C above pre-industrial levels, while \u201cpursuing efforts\u201d to restrict the increase to 1.5C. In 2018, the UN\u2019s climate science body, the IPCC, published a special report<\/a> that emphasised the need for rapid transitions in various sectors to achieve the 1.5C target, including a 45% reduction in global net CO2 emissions by 2030 (from 2010 levels) and reaching net-zero emissions by 2050.<\/p>\n\n\n\n

Using the IPCC definition<\/a>, \u201cnet-zero\u201d emissions refers to a balance between human-driven greenhouse gas emissions and removals over a specified period.<\/p>\n\n\n\n

\"Two<\/div>
Clearing peatland forest in an oil palm concession, Central Kalimantan, 2013. As well as being home to numerous endangered species, like orangutans, proboscis monkeys and ramin trees, Indonesia\u2019s peatland forests release greenhouse gas from their soils if cut down. (Image \u00a9 Kemal Jufri \/ Greenpeace)<\/div><\/div><\/div><\/div>\n\n\n\n

In the world of business, the Science Based Targets initiative (SBTi) was established in 2015 to help the private sector set emissions reduction targets based on scientific evidence. The initiative validates whether a company\u2019s climate targets align with a 1.5C or 2C pathway, considers the year of net-zero commitment, and ensures robustness, credibility, and accountability in climate action.<\/p>\n\n\n\n

Critics argue that \u201cnet-zero\u201d targets can be misused if companies focus more on carbon removal and offsetting than on reducing emissions. To address this, frameworks like SBTi are crucial for companies to establish time-bound targets and demonstrate progress through transparent reporting and monitoring. Crucially, SBTi does not recognise carbon offsetting as emission reductions and requires separate reporting of offsets and removals.<\/p>\n\n\n\n

What climate targets exist in the palm oil industry?<\/h2>\n\n\n\n

Pressure to confront sustainability challenges has driven efforts to produce and promote certified sustainable palm oil, and to eliminate deforestation and exploitation from supply chains. Managing the impacts of the Covid-19 pandemic and war in Ukraine<\/a> has been a significant focus for the industry, but addressing climate change and emissions, especially those related to deforestation and peatland use, has also continued to grow in importance.<\/p>\n\n\n\n

While the palm oil industry has been relatively slow to start working with SBTi on net-zero target setting, some major palm oil producers, including Malaysian firms Sime Darby<\/a> and IOI Corporation<\/a>, and Singapore-based Wilmar International<\/a>, have made climate commitments. Though their targets have yet to be validated under the SBTi, many palm oil producers are experienced in working with sustainability frameworks that require them to disclose greenhouse gas emissions data.<\/p>\n\n\n\n

\"Aerial<\/div>
Wilmar International\u2019s palm oil refinery in Dumai, Sumatra. Most of a refinery\u2019s greenhouse gas emissions come from the energy needed to power its operations. (Image: Wahyudi \/ China Dialogue)<\/div><\/div><\/div><\/div>\n\n\n\n

Reporting emissions is a requirement for certification by the Roundtable on Sustainable Palm Oil (RSPO), the industry\u2019s leading sustainability standard. The RSPO\u2019s emission calculator, PalmGHG, has been used for over a decade to assess emissions related to land use, management practices and energy consumption.<\/p>\n\n\n\n

Consumer goods manufacturers at the other end of the palm oil supply chain, including Unilever<\/a>, Nestl\u00e9<\/a> and Mars<\/a>, have already adopted science-based net-zero and emissions-reduction targets. Many of these companies have recognised the importance of eliminating deforestation and land-use emissions to achieve climate targets. For example, Nestl\u00e9 committed to become deforestation-free by the end of 2022 for palm oil and several other key commodities. It claims to now be 95.6%<\/a> deforestation-free for palm oil and outlined that the final percentage points are hardest to reach due to the challenge of reaching smallholders. This is exactly why the cooperation and commitment of palm oil producers will be essential to realising such targets.<\/p>\n\n\n\n

How are emissions accounted in the palm oil industry?<\/h2>\n\n\n\n

The Greenhouse Gas Protocol<\/a> is widely used for accounting emissions. Developed by the World Resources Institute and the World Business Council for Sustainable Development, it helps companies build inventories of their emissions. It\u2019s also a requirement for companies seeking recognition of their targets by the SBTi. The protocol categorises a company\u2019s emissions into three scopes.<\/p>\n\n\n\n

Scope 1 refers to direct emissions from company-owned and controlled sources, such as combustion in boilers, and vehicle emissions. Scope 2 covers indirect emissions from purchased energy consumed by the company. Scope 3 includes other indirect emissions throughout the value chain, including the extraction and production of purchased materials, transportation, and the use of sold products and services.<\/p>\n\n\n\n

Under SBTi, if a company\u2019s Scope 3 emissions are less than 40% of their total emissions, then they are only required to report their scope 1 and 2 emissions. However, for most business in most industries, Scope 3 accounts for over 70%<\/a> of their carbon footprint.<\/p>\n\n\n\n

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\"Aerial<\/div>
Fields of crops surround a palm oil mill in Central Kalimantan, Indonesia. To the left are ponds of oily wastewater which emit methane. (Image \u00a9 Ulet Ifansasti \/ Greenpeace)<\/div><\/div><\/div><\/div>\n<\/div>\n\n\n\n
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\"Large<\/div>
The cargo ship Great Motion (\u5927\u8fd0) at sea near New Zealand carrying 10,000 tonnes of palm kernel oil, which is used in animal feed for cows and sheep among other uses (Image \u00a9 Nigel Marple \/ Greenpeace)<\/div><\/div><\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

Palm oil companies that operate both upstream (with plantations and mills) and downstream (with refining and oleochemical production) are considered \u201cvertically integrated\u201d in the supply chain. Their greenhouse gas emissions reporting for Scope 1 and 2 is often divided into upstream and downstream sections. But calculating and reporting on Scope 3 emissions is challenging due to supply chain complexities and a lack of traceability in the palm oil sector.  <\/p>\n\n\n\n

Scope 3 emissions require intensive supply chain risk management, engagement with suppliers and other stakeholders, and outreach efforts. While SBTi generally only requires targets to be set for Scope 3 when they account for 40% or more of a company\u2019s total emissions, Scope 3 emissions in the palm oil industry are often excluded from greenhouse gas inventories due to difficulties collecting data.<\/p>\n\n\n\n

Palm oil emissions sources (Scopes 1, 2 and 3)<\/span>
\n
 <\/strong><\/td>Scope 1 and 2<\/strong><\/td>Scope 3<\/strong><\/td><\/tr>
Plantation<\/strong><\/td>Land-use change will be the major source of emissions on the plantation, if any is taking place. This includes clearing or converting land from forests, as well as planting and replanting. If plantations are developed on peatland, the impact of land use change is even greater because methane and nitrous oxide are released from degrading peat soils. Fertiliser use and fuel for transportation are also major emissions sources.<\/td>Manufacturing and transport of fertilisers\/agrochemicals

Leased transportation<\/td><\/tr>
Mill<\/strong><\/td>At the mill, the dominant source of emissions is methane from palm oil mill effluent. This is an oily wastewater generated when mills process oil palm fruit into crude palm oil, and is usually held in treatment ponds to prevent discharge into groundwater. Other emissions come from steam boilers, fuel consumption and any purchased energy.  <\/td>Embedded emissions in purchased fresh fruit bunches, transportation, leased storage, etc<\/td><\/tr>
Refinery, crusher & oleochemical plant<\/strong><\/td>At the plant, emissions primarily come from fuel and energy use.  <\/td>Transportation, international shipping, purchase of palm oil\/palm kernel and their processed products  <\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div><\/div><\/div>\n\n\n\n

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