Is it possible to produce net zero or carbon neutral palm oil?

Palm is after all, commonly accused of contributing to climate change. Widely spread misinformation has tainted palm oil’s image so badly that even the effects of climate change like wildfires in Southeast Asia are blamed on palm oil.

The false narrative is so bad that industry veterans greet the news of wildfires from California to Siberia with a weary sigh that palm oil will even get blamed for those fires.

As the debates around COP26 rages on what countries and what industries should be doing more to stop the natural disasters caused by climate change, there has been a new surge of pledges by both countries and companies towards a net zero goal.

What is Net Zero? And why are so many companies making Net Zero pledges?

Net zero is best explained by the accounting firm Deloitte UK which explains it all on their website.

“When it comes to climate action, achieving net zero by 2050, in line with the Paris Agreement, is the UK’s legal target.

And it’s no surprise if it feels like the latest buzzword – we’ve seen a surge in commitments from governments and businesses to net zero, meaning momentum is building.

Essentially, we reach net zero when the amount of carbon dioxide we add is no more than the amount taken away. These goals guide us to significantly reduce our absolute emissions and find ways to sequester any residual carbon emissions - so there’s no net increase in CO2.

Why does it matter? Over the next decade, what we do to get to net zero will have a major impact on the world we live in. This will reach every corner of the economy, so the sooner businesses get on board, the better.”

Building a better future with a net zero future is obviously a great goal for all industries but the question that is being increasingly asked is, how does one go about achieving net zero?

The answer, for now, is not quite clear but that has not stopped the pledges from making the news. According to the United Nations which was critical in this report on net zero:

A growing number of countries, cities, and businesses are making pledges to get to net zero emissions, especially in the lead-up to this year’s major global climate conference. But how meaningful are those promises?

But a more problematic finding is the wide variance in the quality of net zero commitments. Only 20 per cent meet the minimum criteria for robustness set out by the UN Race to Zero campaign. The concern arises around offsetting carbon emissions, a practice of meeting emissions targets by purchasing credits for emissions reductions in other places, often poorer developing countries.

Only a few entities have set conditions on the use of offsets, much less tied them firmly to plans for permanent removal. Another issue is a lack of specifics around short-term actions since to have sufficient impact, measures to cut emissions need to begin immediately on a broad scale.

Based on the United Nation’s Race to Zero campaign, how close is Malaysian palm oil to being a net zero commodity?

Malaysian palm oil is close to achieving net zero

While we do not feel qualified to talk about what other palm oil-producing countries are doing, we do feel qualified to talk about Malaysian palm oil and its potential to achieve net zero production.

In gauging the potential, we looked at what other industries are including in their net zero pledges and weighed that against the production of palm oil in Malaysia.

A summary of actions that pertain to an agricultural commodity would therefore be:

1. The stoppage of emissions from deforestation or regular farm level activities that would continue to contribute to emissions.

2. The reduction of known climate-changing emissions in processing, whether in carbon dioxide or methane

3. The offset of any leakage from reduction activities through carbon sequestration

These actions would in effect, bring emission levels of Malaysian palm oil production to net zero but what would it look like on the ground?

• The Malaysian government has pledged that any palm oil expansion will not come at the loss of forests. Malaysian palm oil has an added advantage over other vegetable oil crops in that it is a perennial crop that emits fewer emissions from agri-chemicals or annual tilling needed to produce annual vegetable oil crops.

• Emissions from downstream activities in milling or refining palm oil can be addressed with biogas capture. This is an existing practice in some mills which are further converting captured gases to create a self-sustaining source of energy for the mills.

• Malaysian palm oil, like all other palm oil-producing countries, can account for carbon offsets in the fact that the oil palm tree absorbs carbon with efficiency in its mature state which could last for over 15 years.

These three points form the foundation from which Malaysian palm oil can work towards net zero.

Data and Facts to Avoid Greenwashing

The Malaysian palm oil industry is aware of the accusations of greenwashing that have dogged net zero pledges. It is therefore critical that any pledges towards a net zero Malaysian palm oil must acknowledge the feasibility of the pledge. Are conditions in Malaysia conducive towards net zero ambitions?

Independent studies in 2021 have indicated that Malaysian palm oil is well set towards net zero.

According to statistics from Our World in Data, Malaysia ranks low as a country in terms of production-based CO2 emissions. This basically means that Malaysia has a lower target to reach in order to achieve net zero emissions.

A separate study conducted by a group of researchers provided further evidence of the feasibility of achieving net zero for Malaysia. The study which looked at Land-Based Measures to Mitigate Climate Change placed Malaysia in the top fifteen countries where climate mitigation is most cost-effective.

This is an important fact as the lack of financing to combat climate change has been an obstacle in the way of meaningful action. We will come back to this study as we examine the fine details in achieving net zero.

The third report on emissions focused specifically on vegetable oils. A study by Dr. Maria Vincenza Chiriacò provided two key insights.

1. Palm oil production from Malaysia and Indonesia emits less than soy but more than rapeseed and sunflower oils

2. This changes dramatically once certification standards are applied. Upon application of sustainability standards, emissions from palm oil production drop drastically to stand out as the cleanest vegetable oil crop compared to soy, rapeseed, and sunflower.

What does this imply for Malaysian palm oil which has close to 90% certification under the Malaysian Sustainable Palm Oil scheme as well as doubled certification under the Roundtable on Sustainable Oil of approximately 20%?

It means that for the Malaysian palm oil industry to achieve a net zero emissions status, it will have to initiate the quantification of known emissions and outline precisely how the industry mitigates those emissions.

Using the mitigation actions suggested by the report prepared by researchers on Land Based Measures is a good starting point.