palm oil and deforestation: breaking the trend

Palm oil and deforestation:breaking the trendWhat EU actors can do to halt deforestation from palm oil

Daan Peters

01/12/2015

© ECOFYS | |

Emissions in agriculture and forestry should be kept in check to keep

global warming below 2°C

Source: RCP2.6, Detlef P. van Vuuren et al (2011)

Palm oil and deforestation – breaking the trend2 02/12/2015

© ECOFYS | |

New methodology developed to set Science-based Targets

Palm oil and deforestation – breaking the trend

> For the Science Based Targets initiative, Ecofys,

CDP, WRI and WWF developed a new methodology:

Sectoral Decarbonization Approach (SDA)

> Methodology enables companies to operate within

the boundaries of the 2oC goal.

> Global budget of carbon emissions defined and

allowed and allocates it over economic sectors and

individual companies.

> Based on the least-cost modelled 2oC scenario

developed by the IEA

> Scientific backing published in Nature Climate

Change

3 02/12/2015

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Work ongoing to bring agriculture and forestry under the SDA

methodology


Currently, over 60% of global GHG emissions are

covered by SDA

Not covered:

> Other Energy, e.g. fossil fuel extraction and

production

> Agriculture, forestry and Land Use (AFOLU)

Some sectors are intertwined.

> Fertilizer produced in industry, but used in

AFOLU

> Biofuels reduce emissions in transport, but

generate emissions in AFOLU

AFOLU

Industry

Other energy

Electricity

and heat

Transport

4 02/12/2015

© ECOFYS | |

Palm oil is the single largest contributor to forestry and land use

emissions and a cause for deforestation. How can SDA contribute to

limit this deforestation?


0

2

4

6

8

10

12

AFOLU GHG emissions (GtCO2eq)

Agriculture FOLU (LULUCF)

0

1

2

3

4

5

6

Direct agriculture GHG emissions

Rest

Palm oil

Soy

Chicken

Maize

Wheat

Pigs

Dairy

Rice

Beef

0

1

2

3

4

5

6

FOLU (LULUCF) GHG emissions

(GtCO2eq)

Rest

Palm oil

Beef

Soy

0

5

10

15

20

25

30

35

40

45

50

Total GHG emissions (GtCO2eq)

Electricity and Heat Other Energy

Industry Transport

Buildings AFOLU

24%

6%

14%

21%

10%

25%

51%

49%

59%

41%

24%

76%

Sources: IPCC, 2014 & CEA, 2014

5 02/12/2015

© ECOFYS | |

Palm oil demand set to grow by 65% towards 2030 if current trend

continues

Palm oil and deforestation – breaking the trend6

text

text

> Increase in global population growth and per capita GDP leads to increase in

vegetable oil consumption

> Overall vegetable oil demand increases by 50%, palm oil is the cheapest,

marginal oil and increases by 65% if current trend continues

> Largest current consumers: India, Indonesia, China, EU (12%) and Malaysia

> 85% of global production from Indonesia and Malaysia

Source: IIASA based on FAO

02/12/2015

© ECOFYS | |

How will growing demand be met? Current trends show only a small role

for increased productivity per hectare


text

> Global average oil yields are less than 3t/ha and around 3.5-4t/ha in Indonesia

and Malaysia

> Yields stagnate in Indonesia, small growth in Malaysia.

> If current yield trends continue, by far most of global demand growth will have

to be met by expansion

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1995 2000 2005 2010 2015 2020 2025 2030 2035

Historical FBB yields and trend towards 2030

IDN GLOBIOM MYS GLOBIOM IDN FAO MYS FAO


02/12/2015

Crude palm oil constitutes 21-23%

of fresh palm fruit bunch yield

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Growing demand to be mainly met by plantation expansion, resulting

in increased deforestation

02/12/2015 Palm oil and deforestation – breaking the trend8

> Global land use for palm oil 21Mha

planted area (18Mha harvested

area) in 2013, of which 65% in

Indonesia and Malaysia

> Annual expansion rate of ~15% in

Indonesia and ~7% in Malaysia

> Future expansion to take place

mainly in Indonesia and the Congo

Basin

> This leads to increased

deforestation with high GHG

emissions especially when peatland

is drained

> OSTAT states around

0.0

2000.0

4000.0

6000.0

8000.0

10000.0

12000.0

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Planted and harvested area Indonesia and Malaysia

IDN GLOBIOM Harvested IDN Stat Planted IDN FAO Harvested

MYS Stat Planted MYS FAO Harvested

> If expected global increase in demand is met by expansion only, by 2030 an

area the size of 1/3 of Germany (13Mha) will be turned into new plantations


© ECOFYS | |

What EU companies, consumers, legislators and NGOs can do to prevent

further deforestation


Curbing the increase in palm oil demand

> Shift to less fatty diets

> Shift to other vegetable oils – beware of shifting impacts

> Reducing supply chain waste

Meeting demand by increasing yields

> Using more productive palm tree species

> Better plantation management practices

> EU companies can demand oil from plantations that

increase yields

> Such requirement could be built into certification

schemes such as RSPO

Forcing expansion to be more sustainable

> EU companies and policy makers can require certification

– beware of shifting impacts

> EU actors can contribute to forest protection

> Participatory land use planning

02/12/2015

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Curbing demand increase means less expansion is needed. Challenging

but EU actors make a difference


> Increase in population and wealth

means demand will grow. Focus on

curbing the increase

> Shift to less fatty diets possible

but requires behavioral change, EU

consumers and NGOs can have

impact

> Reducing supply chain waste. EU

companies can have impact

> Shift to other veg oils possible but

not a solution because palm has

>4 times higher yields than any

other oil crop

> If we stop palm oil production, an

area at least four times as large as

current palm plantation area is

required to meet global vegetable

oil demand. This can increase

deforestation.

Source: RSPO

02/12/2015

© ECOFYS | |

EU companies can encourage sustainable intensification, thereby

minimising the need for plantation area expansion

02/12/2015 Palm oil and deforestation – breaking the trend11

Source: palmoilworld.org (MPOB)

> Large increase in plantation productivity possible (i.e. using more productive

species, better management)

> Important to ensure social and environmental sustainability

> Borlaug versus Jevons. Intensification at the deforestation frontier should be

avoided at the deforestation frontier and should be accompanied by better

governance, REDD+ and certification

Palm oil yield potential – ton/Ha.

© ECOFYS | |

EU companies can steer expansion away from forests by certification.

Incomplete certification however can shift deforestation to elsewhere

rather than preventing it


> Large potential for expansion on degraded

land in Indonesia and Malaysia.

> Great potential for expansion on Alang-Alang

grassland on Kalimantan

> Expansion can be steered to such areas by

certification, forest protection including

REDD+ and improved land use planning

> Certification important but insufficient. Unless

a large majority of the market is certified,

deforestation is shifted rather than

prevented. Existing plantations get certified

while uncertified palm expands into forests

> EU biofuel sustainability criteria ensure zero

direct deforestation through certification. But

since biofuel feedstocks make up a small part

of global demand, indirect land use change

occurs.

02/12/2015

© ECOFYS | |

Curbing demand increase, sustainable intensification and direct forest

protection all needed to stop deforestation. Company-specific carbon

budgets under SDA can help to trigger action


Less

expansion

Sustainable expansion

Unsustainable expansion

Curbing demand increase

02/12/2015

Better governance/

REDD+/Certification

Sustainable yield increase

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© ECOFYS | | 14 Palm oil and deforestation – breaking the trend02/12/2015

Ecofys

Sustainable energy for everyone

Daan Peters

[email protected]

With thanks to Giel Linthorst (Ecofys) and Hugo Valin (IIASA)

Ecofys

Sustainable energy for everyone

Daan Peters

[email protected]

With thanks to Giel Linthorst (Ecofys) and Hugo Valin (IIASA)

© f

oto

lia/n

uts

iam

palm oil and deforestation: breaking the trend

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