Sustainability Standards in Oil Palm Industry: An Overview

The palm oil industry is particularly involved in the development of sustainability standards. Driven by growing global demand, palm oil production has expanded rapidly in the last few years. Palm oil is the most widely consumed vegetable oil in the world, and its popularity has grown even more with the emergence of new market opportunities in the biofuels sector, in addition to its traditional food and oleochemical uses.

This strong growth has unquestionably contributed to the economic development of the main producer countries – Indonesia and Malaysia – which account for 87% of global production. Palm oil cultivation provides income for many smallholders, whose produce accounts for around 40% of world palm oil output.

Environmental and Socio-economic Concerns

However, the expansion of palm oil cultivation has also generated serious environmental concerns. It results in tropical deforestation and thus has a major impact on biodiversity loss, with the decline of emblematic species such as orangutan in Southeast Asia. It contributes to climate change through deforestation, but also through the conversion of peatlands, which are of vital importance in soil carbon sequestration.

The huge forest and bush fires in recent years in Indonesia which are associated with clearing lands for agricultural or forestry plantations caused severe air pollution and public health problems across the sub-region. In addition, industrial plantations are sometimes responsible for polluting waterways, into which chemical inputs and processing plant waste are dumped.

Moreover, this expansion has sometimes resulted in social abuses and human rights violations, in the form of land grabbing by plantation companies at the expense of local and indigenous communities or of the exploitation of plantation workers.

Sustainability Standards in Oil Palm Industry

Condemnation of these abuses by NGOs and growing consumer awareness of the adverse impacts of the expansion of palm oil plantation have driven the development of sustainability standards. Such standards are aimed at transforming production practices in order to mitigate their adverse environmental and social effects.

The expansion of palm oil cultivation in Southeast Asia has also generated serious environmental concerns.

In 2001, representatives of the food processing and distribution sector launched a dialogue with WWF and plantation companies, leading to the creation in 2004 of the first voluntary sustainability standard in the sector, the Roundtable on Sustainable Palm Oil (RSPO).

There are now 2.41 million hectares of RSPO-certified plantations, while sustainable palm oil accounted for 20% of world trade in this product. Meanwhile, several other initiatives proposing a vision of palm oil sustainability have emerged, positioning themselves as either a complement or an alternative to RSPO.

New Challenges to Overcome

The development of these initiatives demonstrates the growing awareness among producers, the industry and the public authorities of the need to transform the sector to enable it to contribute to the Sustainable Development Goals (SDGs). But this proliferation of sustainability standards itself poses new challenges, even though the environmental and social problems that motivated their emergence remain unresolved.

At the institutional level, the proliferation of sustainability initiatives since the creation of RSPO reflects a real fragmentation of the regulatory framework. This proliferation also raises the question of the articulation of these voluntary standards with the public regulations and national sustainability standards that producer countries have adopted.

Finally, measures to ensure the sustainability of palm oil cultivation need to bolster their credibility by guaranteeing better inclusion of the millions of smallholders, and by contributing in an effective, measurable way to mitigating the adverse social and environmental impacts of growth in palm oil cultivation. In this field, the role of collaborative and multidisciplinary research in providing strong evidence-based impact evaluation of standards is crucial.

Note: This is an excerpt from the book Achieving Sustainable Cultivation of Oil Palm (Volume 2) published by Burleigh Dodds Science Publishing. You may buy the book from this link. Use code BIOEN10 to avail special discount.

Agricultural Biomass in Malaysia

Malaysia is located in a region where biomass productivity is high which means that the country can capitalize on this renewable energy resource to supplements limited petroleum and coal reserves. Malaysia, as a major player in the palm oil and sago starch industries, produces a substantial amount of agricultural biomass waste which present a great opportunity for harnessing biomass energy in an eco-friendly and commercially-viable manner.

Peninsular Malaysia generates large amounts of wood and’ agricultural residues, the bulk of which are not being currently utilised for any further downstream operations. The major agricultural crops grown in Malaysia are rubber (39.67%), oil palm (34.56%), cocoa (6.75%), rice (12.68%) and coconut (6.34%). Out of the total quantity of residues generated, only 27.0% is used either as fuel for the kiln drying of timber, for the manufacture of bricks, the curing of tobacco leaves, the drying rubber-sheets and for the manufacture of products such as particleboard and fibreboard. The rest has to be disposed of by burning.

Palm Oil Industry

Oil palm is one of the world’s most important fruit crops. Malaysia is one of the largest producers and exporter of palm oil in the world, accounting for 30% of the world’s traded edible oils and fats supply. Palm oil industries in Malaysia have good potential for high pressure modern power plants and the annual power generation potential is about 8,000 GWh. Malaysia produced more than 20 million tonnes of palm oil in 2012 over 5 million hectares of land.

The palm oil industry is a significant branch in Malaysian agriculture. Almost 70% of the volume from the processing of fresh fruit bunch is removed as waste in the form of empty fruit bunches (EFBs), fibers and shells, as well as liquid effluent. Fibres and shells are traditionally used as fuels to generate power and steam. Effluents are sometimes converted into biogas that can be used in gas-fired gensets.

Sugar Industry

The cultivation of sugarcane in Malaysia is surprisingly small. Production is concentrated in the Northwest extremity of peninsular Malaysia in the states of Perlis and Kedah. This area has a distinct dry season needed for cost-efficient sugarcane production. Plantings in the states of Perak and Negri Sembilan were unsuccessful due to high unit costs as producing conditions were less suitable.

The lack of growth in cane areas largely reflects the higher remuneration received by farmers for other crops, especially oil palm. Over the past 20 years while the sugarcane area has remained at around 20 000 hectares, that planted to oil palm has expanded from 600 000 hectares to 5 million hectares.

Other leading crops in terms of planted areas are rubber with 2.8 million hectares, rice with 670 000 hectares and cocoa with 380 000 hectares. Malaysia, the world’s third largest rubber producer, accounted for 1 million tons of natural rubber production in 2012. Like oil palm industry, the rubber industry produces a variety of biomass wastes whose energy potential is largely untapped until now.

Biomass Resources in Malaysia

Malaysia is gifted with conventional energy resources such as oil and gas as well as renewables like hydro, biomass and solar energy. As far as biomass resources in Malaysia are concerned, Malaysia has tremendous agricultural biomass and wood waste resources available for immediate exploitation. This energy potential of biomass resource is yet to be exploited properly in the country.

Taking into account the growing energy consumption and domestic energy supply constraints, Malaysia has set sustainable development and diversification of energy sources, as the economy’s main energy policy goals. The Five-Fuel Strategy recognises renewable energy resources as the economy’s fifth fuel after oil, coal, natural gas and hydro. Being a major agricultural commodity producer in the region Malaysia is well positioned amongst the ASEAN countries to promote the use of biomass as a source of renewable energy.

Major Biomass Resources

Palm Oil Biomass

Malaysia is the world’s leading exporter of palm oil, exporting more than 19.9 million tonnes of palm oil in 2017. The extraction of palm oil from palm fruits results in a large quantity of waste in the form of palm kernel shells, empty fruit bunches and mesocarp fibres. In 2011, more than 80 million tons of oil palm biomass was generated across the country.

13MW biomass power plant at a palm oil mill in Sandakan, Sabah (Malaysia)

Processing crude palm oil generates a foul-smelling effluent, called Palm Oil Mill Effluent or POME, which when treated using anaerobic processes, releases biogas. Around 58 million tons of POME is produced in Malaysia annually, which has the potential to produce an estimated 15 billion m3 of biogas.

Rice Husk

Rice husk is another important agricultural biomass resource in Malaysia with very good energy potential for biomass cogeneration. An example of its attractive energy potential is biomass power plant in the state of Perlis which uses rice husk as the main source of fuel and generates 10 MW power to meet the requirements of 30,000 households.

Municipal Solid Wastes

The per capita generation of solid waste in Malaysia varies from 0.45 to 1.44kg/day depending on the economic status of an area. Malaysian solid wastes contain very high organic waste and consequently high moisture content and bulk density of above 200kg/m3. The high rate of population growth is the country has resulted in rapid increase in solid waste generation which is usually dumped in landfills.

Conclusion

Biomass resources have long been identified as sustainable source of renewable energy particularly in countries where there is abundant agricultural activities. Intensive use of biomass as renewable energy source in Malaysia could reduce dependency on fossil fuels and significant advantage lies in reduction of net carbon dioxide emissions to atmosphere leading to less greenhouse effect. However, increased competitiveness will require large-scale investment and advances in technologies for converting this biomass to energy efficiently and economically.

Biomass Energy Scenario in Southeast Asia

The rapid economic growth and industrialization in Southeast Asian region is characterized by a significant gap between energy supply and demand. The energy demand in the region is expected to grow rapidly in the coming years which will have a profound impact on the global energy market. In addition, the region has many locations with high population density, which makes public health vulnerable to the pollution caused by fossil fuels.

Another important rationale for transition from fossil-fuel-based energy systems to renewable ones arises out of observed and projected impacts of climate change. Due to the rising share of greenhouse gas emissions from Asia, it is imperative on all Asian countries to promote sustainable energy to significantly reduce GHGs emissions and foster sustainable energy trends. Rising proportion of greenhouse gas emissions is causing large-scale ecological degradation, particularly in coastal and forest ecosystems, which may further deteriorate environmental sustainability in the region.

The reliance on conventional energy sources can be substantially reduced as the Southeast Asian region is one of the leading producers of biomass resources in the world. Southeast Asia, with its abundant biomass resources, holds a strategic position in the global biomass energy atlas.

There is immense potential of biomass energy in ASEAN countries due to plentiful supply of diverse forms of wastes such as agricultural residues, agro-industrial wastes, woody biomass, animal wastes, municipal solid waste, etc. Southeast Asia is a big producer of wood and agricultural products which, when processed in industries, produces large amounts of biomass residues.

palm-kernel-shell-uses

Palm kernel shells is an abundant biomass resource in Southeast Asia

According to conservative estimates, the amount of biomass residues generated from sugar, rice and palm oil mills is more than 200-230 million tons per year which corresponds to cogeneration potential of 16-19 GW. Woody biomass is a good energy resource due to presence of large number of forests and wood processing industries in the region.

The prospects of biogas power generation are also high in the region due to the presence of well-established food processing, agricultural and dairy industries. Another important biomass resource is contributed by municipal solid wastes in heavily populated urban areas.

In addition, there are increasing efforts from the public and private sectors to develop biomass energy systems for efficient biofuel production, e.g. biodiesel and bioethanol. The rapid economic growth and industrialization in Southeast Asia has accelerated the drive to implement the latest biomass energy technologies in order to tap the unharnessed potential of biomass resources, thereby making a significant contribution to the regional energy mix.