Golden Agri -TFT deal sets 35 tonnes carbon stored per ha ceiling

I sent out an alert via email to readers on 9 Feb 2011: BBC article on GAR deal with TFT. Weblink: http://www.bbc.co.uk/news/science-environment-12397427 (please scroll down for excerpts).

This initially sets the ceiling on land bank development at 35 tonnes of carbon stored per hectare.

Feedback to Khor Reports: Subsequently, we hear that the deal may be dependent on a) further research to validate claims that there is plenty of degraded land available for new plantings and b) the creation of a mechanism for Golden Agri to swap out of current licenses on forested land for degraded land. *This information needs to be checked and validated.

Khor Reports comment: Analysts of plantation land banks will find publicly available information to be frustratingly limited. The companies do not disclose the high risks to the 'usability' of their land banks for plantation development i.e. what proportion is on forested land, on peat land, with high biodiversity and so forth?



Snippets from "Palm oil deal aims to save forests and carbon," 9 Feb 2011, BBC news :

"A major palm oil producer is joining forces with environmental campaigners in a bid to ramp up forest protection. The giant Indonesian company Golden Agri-Resources (GAR) has agreed to work within new standards aimed at saving forests that store a lot of carbon. International environment group The Forest Trust (TFT) is partnering the company and will monitor compliance. The palm oil industry has regularly been accused of destroying old-growth forest as demand rockets. The new deal expands on existing standards agreed under the Roundtable on Sustainable Palm Oil (RSPO), an international alliance of producers, processors, retailers and environment groups...."

"...Already, RSPO rules forbid clearing old-growth forest or land with high conservation value, and developers are also supposed to obtain informed consent from local people before initiating new plantations. Under the new deal, GAR will go further, vowing not to plant on peat, and not to clear forest where significant carbon is locked up in trees. This should mean that large tracts of forest that have been partially logged will now be off-limits to the company. Initially, the figure of 35 tonnes of carbon stored per hectare will be used as a ceiling; but that could change as research progresses. "We're not trying to undermine the RSPO - we're saying 'this is something you guys need to look at and maybe move towards,'" said Scott Poynton, TFT's executive director...."

"...Earlier in the year, TFT finalised a deal with Swiss-based food giant Nestle designed to "ensure that its palm oil procurement had no deforestation footprint". This led to discussions with suppliers such as GAR - and the conclusion that in order to preserve their markets, growers would have to purify their operations. Greenpeace, which has taken the lead on the issue among international NGOs, sees the deal as a potential step forwards. "This is really throwing a gauntlet down to the rest of the palm oil sector, and to other players," said campaigner Phil Aikman. "It's setting a threshold for carbon, and that's pretty good - it'll protect a lot of orangutan habitat and other important areas that have been threatened by palm oil plantations. "It challenges the rest of the sector to increase its productivity rather than target new areas over and over again, and that's been the main issue." With RSPO, another issue has been compliance, with a number of companies accused of failing to live up to their promises...."

Source: BBC news article.

Current work projects

Currently, I am working on a feature article for Lipids Technology (editor: Prof Frank Gunstone) on Indonesia and Malaysia reactions to the NGO campaigns on palm oil. Thank you to industry leaders for taking the time to chat with me about this.

At the same time, I am wrapping up an analysis of oil palm land bank trends for a corporate client. Our multi-client database of plantation statistics is building up. For client projects, we access this database to customize studies for their needs.

Newsletters on sustainable palm oil issues (Aug-Nov 2010)

Welcome to Khor Reports' palm oil blog. In Aug-Nov 2010, we issued a 3-parter on sustainable palm oil issues which garnered a lot of industry interest. It was circulated at the highest level of the oil palm industry decision-makers. Thank you to our readers for your interest!

For your convenience, here are the links for you to download the thee newsletters in our "Palm Oil Strategic Analysis" series:

1st of 3: khorreport001-palm_oil-eu_sustainability_policy-100803a.pdf, 192k
2nd of 3: khorreport002-palm_oil-rspo_growers-100826.pdf, 269k
3rd of 3: khorreport003-palm_oil-rspo_stakeholders-101027.pdf, 406k

Weblink: https://sites.google.com/site/khorreports2011/palmoil_strat_analysis