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Malaysia can be proud of its centennial oil palm industry

Today marks a century of the Malaysian oil palm industry. The country is the second-largest producer of the world’s most used vegetable oil accounting for 39 percent of global production. Together with neighbouring Indonesia, the world’s largest producer, the duo accounts for about 85 percent of the global supply.

Major producers of palm oil (crude palm oil, CPO and palm kernel oil, PKO) 1970 - 2016 (graphic courtesy Gro Intelligence).

Major producers of palm oil (crude palm oil, CPO and palm kernel oil, PKO) 1970 – 2016 (graphic courtesy Gro Intelligence).

Palm oil is found in everything from cookies to soaps. Figures from Gro Intelligence show that global palm oil production 2016 – crude palm oil (CPO) and palm kernel oil (PKO) was around 72 million tonnes. Furthermore that the global per capita consumption has over doubled since 2000 to 7.7 kg per capita in 2015.

This rapid expansion has given rise to public concerns over tropical deforestation, land tenure issues and sustainability culminating with European MEP’s backing a resolution calling for a clampdown on imports of “unsustainable” palm oil and phase its use in biofuels preferably by 2020. In addition, said MEP’s want the EU to introduce a single certification scheme for palm oil entering the EU.

According to RSPO's 2016 Impact Report, Thailand has now 1 336 smallholders under RSPO certification.

An oil palm plantation adjacent to a mill in southern Thailand. Palm oil mill effluent (POME) is increasingly being treated using anaerobic digestion (AD) to produce biogas for energy production with the digestate used as fertiliser in the plantations.

Whilst many of the concerns surrounding oil palm cultivation, processing and expansion are legitimate and well-founded so too are many of the actions being put into place to address these. Both Malaysia and Indonesia have introduced national certification schemes and then there is the Switzerland-headed multi-stakeholder Roundtable on Sustainable Palm Oil initiative (RSPO). Not to mention industry driven initiatives.

Somewhat ironic given the current negative sentiment towards palm oil in Europe, is that the oil palm was first introduced to Malaysia by the British in the 1870’s. Hailing from West Africa it was introduced as an ornamental plant. It was though the celebrated French author Henri Fauconnier who is credited with having established the commercial first oil palm plantation in the country in 1917.

Apparently almost by accident. The story goes that it was a last resort to rescue a failing coffee plantation by substituting coffee with oil palm. Fauconnier is reputed to have visited a plantation in Indonesia, where oil palm had been introduced by the Dutch, and came back to Selangor on the west coast of Peninsular Malaysia with the inspiration and seedlings.

A stockpile of palm kernel shells (PKS) at a biomass terminal in a Japanese port. A residue from palm oil production PKS is widely used as fuel not least in Japanese power plants.

A stockpile of palm kernel shells (PKS) at a biomass terminal in a Japanese port. A residue from palm oil production PKS is widely used as fuel not least in Japanese power plants.

Just like the forest industry value chain, the oil palm value chain is far more than what a simplistic EU “clampdown” on the use of CPO and Palm Fatty Acid Distillate (PFAD) in biodiesel or hydrogenated vegetable oil (HVO) gives credit for or shows any understanding of.

Just as a centennial Finland can be proud of the achievements and leadership shown by its forest industry, Malaysia can be proud of its centennial oil palm industry that is also showing leadership right across its value chain.

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