Recent statements from food manufacturers and retailers outlining their commitment to sustainable palm oil betray a lack of understanding of how the palm oil supply chain actually works, according to a leading supplier.
Many firms say they are committed to sourcing certified sustainable palm oil. But this option is only available for crude or refined oil, which most processors do not use, said Judith Murdoch, marketing controller at palm oil specialist AAK.
"You can use refined palm oil in biscuits. But most food manufacturers use palm derivatives such as olein and stearin, fractions of olein and stearin, palm kernel oil (PKO) or PKO derivatives. And certified sustainable versions of these are simply not available."
She added: "Unless there is a market for sustainable olein, for example, it's not viable to produce sustainable stearin and vice-versa. So if you are using derivatives, the only practical way you can drive sustainable production right now is to buy into the GreenPalm scheme. But I don't think many manufacturers appreciate this. Simply saying that you're committed to sourcing sustainable palm or that you buy oil from an RSPO (round table for sustainable palm oil) member will not make any difference on the ground."
GreenPalm was set up precisely because the cost and practical feasibility of creating segregated supply chains and full traceability for palm and its derivatives was so challenging, she said.
By purchasing GreenPalm certificates guaranteeing that a tonnage of palm oil/derivatives equivalent to the tonnage they use has been produced from sustainable sources, manufacturers could help boost sustainable production, she said.
Under the scheme, plantations are allocated one certificate for every sustainably produced tonne of oil. These are being traded at www.greenpalm.org for $21.50.
Meanwhile, most of the certified (fully traceable) sustainable refined oil AAK had in stock was not selling, because of the price and because most manufacturers used derivatives, she added. "It looks like we will have to downgrade it."
The World Wildlife Fund last month launched an initiative to encourage palm oil users to buy RSPO-certified sustainable palm oil. However, it accepted the scheme might cause confusion, since most food manufacturers couldn't use it. "Maybe we didn't make this clear, but we recognise that, for many, GreenPalm may be the only practical, affordable option at the moment."