Market uptake of sustainable palm oil will need to accelerate in 2011 in order to keep up with rapidly growing production, claims the Roundtable on Sustainable Palm Oil (RSPO).
Jan Kees Vis, RSPO executive board president, said that many companies have pledged to switch to RSPO-certified sustainable palm oil fully by 2015, but until then, it will also be important that users of palm oil such as the leading confectionery and food manufacturers match a rising supply with rising market demand.
“In 2010, the Roundtable on Sustainable Palm Oil began to deliver on its promises," said Vis. “Sustainably operating palm growers have been certified on an unprecedented scale, with 7.5 percent of global palm oil production covered just over two years after certification took off," Vis added.
The RSPO said that while there is a delay in market uptake: “56 per cent of certified palm oil was purchased as such in 2010 — a substantial percentage.”
Palm oil is used in a wide range of food and personal care products, but there are serious concerns about the effect of the palm oil industry on the environment, as intensive plantations have cleared habitats for endangered species like tigers and orang-utans in South Asia, while also adding to carbon emissions.
The RSPO was set up in 2004 to promote sustainable palm oil use – and changing to palm oil that is sustainable or supports green palm certification has become a major trend for food manufacturers and retailers.
Delay in market uptake
According to the RSPO, the combined production capacity of certified oil palm plantations and smallholders grew strongly in 2010, from 1.4m tonnes/yr in January to 3.4m tonnes/yr in December.
The volume of actual RSPO-certified sustainable palm oil on the market jumped from 1.3m tonnes in 2009 to 2.3m tonnes in 2010.
Sales of sustainable palm oil more than tripled from 0.4m tonnes in 2009 to about 1.3m tonnes in 2010.
The past year also saw strong growth in sales of certified sustainable palm kernel products. Palm growers sold GreenPalm certificates covering the production of about 180,000 tonnes of palm kernel in 2010, which amounts to about 35 per cent of RSPO-certified sustainable palm kernel supplied in the same year.
The RSPO said the number of its members grew to over 500 companies and organizations, while 81 palm oil mills and 113 facilities in the palm product supply chain are now fully certified.
There are three RSPO approved trading systems: ‘segregation’, whereby sustainable palm oil is kept apart throughout the entire supply chain from plantation to user; ‘mass balance’, where refineries ensure the volume of certified oil they sell is equal to that which they buy, but it does not need to be the exact same molecules; and ‘book and claim’, where users buy vouchers that cover the premium for the quantity of oil they use, but the oil they receive has not necessarily been sustainably produced.
So far a clutch of food manufacturers have given a date by which they will use only sustainable palm oil in their products.
Nestlé, which uses the ingredient in its Kit Kat and Aero bars along with its Quality Street range, bolstered its sustainable palm oil commitments in May 2010 by partnering with The Forest Trust (TFT).
The company is said to be the first global consumer goods company to become a TFT member and TFT executive director, Scott Poynton described the partnership as a “game-changer”.
The partnership between the confectionery giant and the global non-profit organisation could see suppliers who do not meet its new sustainability guidelines cut off as Nestlé works towards zero tolerance of palm oil from non-sustainable sources.
In November last year it was announced that all palm oil used in The Netherlands will be certified by the RSPO by 2015, as all the suppliers and buyers in the Dutch market have signed a manifesto and pledged to work towards this goal.