Sustainability of Vegetable Oils
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1 Sustainability of Vegetable Oils Frans Claassen Product Board MVO ADM European Oils Advantage Seminar Hamburg, November 14, 2011 Topics for today Product Board MVO and MVO Industry The Challenge of Sustainable Food Security Palm Oil Other standards and future developments 2
2 The MVO Industry Trade NOFOTA Crush VERNOF Refining VERNOF Margarines, Frying Oils and Sauces BNMF Animal Fats VVS Oleo chemical VNCI Fat Recyclers / - Compounders 3 The MVO Industry 2010 One of the main Agribusiness sectors in the Netherlands Production value Euro 5,7 billion International orientation import 95% / 75% outside EU export 93% within EU Employees
3 Product Board MVO Mission In conjunction with the business community, MVO is committed to an internationally competitive sector that takes it social responsibilities seriously National, European and International Level Focused on long term goals: Healthy Diet f.e. - Trans fatty Acids Food Safety Free Trade Sustainability 5 Challenge of Sustainable Food Security Balance the Challenge Demographical changes + Public concerns Growing Population Urbanization Growing Wealth Changing Diets Biodiversity Climate Change Food Safety Oils and fats in a healthy Diet 6
4 How to feed the growing world population? 1968 : 3,5 billion 2011 : 7 billion 2050 : 9 billion A city the size of Hamburg Every 10 days! 7 Global consumption of vegetable oils 8
5 Rapid decline tropical Living Planet Index 30% increase of Temperate species 60% loss of Tropical Species WWF: Living Planet Report high impact key commodities according to WWF These commodities pose a key threat to the 35 biodiversity rich areas globally (Jason Clay, WWF) 10
6 Consumption Footprint 2011 Source: WWF 11 Consumption Footprint 2050 Source: WWF 12
7 Time for change We need to double the production whilst at the same time reduce our environmental footprint 13 Sustainability: The licence to produce The License to produce is given by society / consumers / markets. Not any more by Governments only! 14
8 Sustainability Principles Sustainable Economy Our Common Future Brundtland Report 1987, UN-WCED Society Environment 15 Criteria for Sustainability Standard Principles for People, Planet, Profit (Brundtland) Developed and owned by the players in the chain Multi-stakeholder International accepted by market players - credible Transparency - grievance panel Clear and simple Independent verification mechanism (third party certification) One standard for Food, Feed and Fuel 16
9 17 Palm Oil production Palm Oil is a tropical belt crop 18
10 19 Palm Oil Crude Palm Oil (Mesocarp Oil) Fractions: - Palm Olein - Palm Stearin Palm Kernel Oil Fractions: - Palm Kernel Olein - Palm Kernel Stearin 20
11 Palm Oil productivity 21 RSPO Roundtable on Sustainable Palm Oil Millions of people are dependent on palm oil More than 1 million workers More than 3 million smallholders Many more household members 22
12 RSPO Roundtable on Sustainable Palm Oil Social issues in oil palm cultivation Land ownership conflicts Worker s rights and conditions Treatment of smallholders 23 RSPO Roundtable on Sustainable Palm Oil Environmental issues in oil palm cultivation Forest, peatland conversion Climate change Biodiversity loss 24
13 Started in 2003, with 7 members Multi-stakeholder association Oil Palm Growers Palm Oil Processors and Traders Consumer Goods manufacturers Retailers Banks / Investors Environmental/Nature and Social/Development NGO s Promotes the growth and use of sustainable oil palm products through global standards End of 2008, first CSPO on the market members Australia (19) Austria (6) Belgium (23) Brazil (6) Cameroon (2) Canada (1) China (3) Colombia (9) Cyprus (1) Denmark (5) Ecuador (3) Egypt (1) Finland (3) France (50) Germany (59) Ghana (3) Greece (1) Guatemala (3) Honduras (1) Hong Kong (2) India (4) Indonesia (88) Ireland (1) Italy (8) Ivory Coast (2) Japan (13) Latvia (1) Liberia (1) Luxembourg (2) Malaysia (99) Mexico (1) Netherlands (55) New Zealand (3) Norway (1) Papua New Guinea (4) Philippines (2) Poland (1) Russia (3) Singapore (25) South Africa (4) South Korea (2) Spain (7) Sweden (14) Switzerland (23) Taiwan, Province Of China (1) Thailand (19) United Arab Emirates (1) United Kingdom (93) United States (36) 26
14 Principle s No. of Criteria Indicator s Classifications Commitment to transparency Compliance with applicable laws & regulations Commitment to long-term economic & financial viability Use of appropriate best practices by growers & millers Environmental responsibility and conservation of natural resources and biodiversity Responsible consideration of employees, inidividuals and communities Responisble development of new plantings Commitment to continues improvement Total CSPO & CSPK Annual Production Capacity 28
15 CSPO, supply, sales (MT), uptake % by year 29 How does RSPO-system work? 30
16 RSPO Roundtable on Sustainable Palm Oil The palm oil supply chain Many links Potential for mixing Smallholders Mill Plantations Transport & Shipping Product Manufacturers Retailers Refiners & Blenders Ingredient Manufacturers 31 RSPO Roundtable on Sustainable Palm Oil Supply Chain Certification Systems Identity preserved - IP Sustainable oil kept apart, traceable to mill Segregation - SG Mixing of sustainable palm oil batches is allowed Mass Balance - MB Mixing of sustainable and conventional oil allowed, if monitored administratively Book and Claim B&C No tracking, tracing or monitoring of oil 32
17 RSPO Roundtable on Sustainable Palm Oil Supply chain certification system: Identity Preserved Condition: RSPO membership + supply chain certification 33 RSPO Roundtable on Sustainable Palm Oil Supply chain certification system: Segregation Condition: RSPO membership + supply chain certification 34
18 RSPO Roundtable on Sustainable Palm Oil Where we are today Supply chain certification system: Mass Balance Condition: RSPO membership and Supply Chain Certification 35 RSPO Roundtable on Sustainable Palm Oil Where we are today Supply chain system: Book and Claim ; Credit Trading No tracking, tracing or monitoring of oil Growers, end-users trade volume credits online / Condition: RSPO membership + GreenPalm membership of enduser 36
19 RSPO Roundtable on Sustainable Palm Oil Where we are today RSPO Supply chain certification procedure Verifies movement of oil through supply chain Step by step documentation Third party certification Details: RSPO Supply Chain Certification Systems See: 37 Corporate Communication RSPO Membership Public Commitment 38
20 Product Communication: Trademark Visit website for details: RSPO is the International Standard RSPO is driven by market demand RSPO answers sustainability concerns in Europe and the world RSPO is a Multi-stakeholder initiative growers, processors, traders, food industry, retail, NGO s Transparent and Credible Internationally accepted 40
21 Challenges ahead for RSPO Smallholders access to standard Supply Chain Certification - small end-users More focus on Yield improvement (smallholders) Add Green House Gas criteria RSPO is not yet the standard for Food, Feed and Fuel! RED compliant Market demand to be further developed 41 RSPO is a shared responsibility Sustainable Supply Demand Problem: Palm Oil is an small ingredient in many products and for many producers and not recognizable as such for the consumer Supply Chain Certification needed for CSPO claiming Responsibility for market take-up: Food industry and Retailers 42
22 Task Force Sustainable Palm Oil By the end of 2015 all Palm Oil used in the Dutch Market will be Sustainable 43 Task Force Participants AKSV Cooked Products and Meat Snacks BNMF Margarine Producers CBL Food Retail FNLI Food Industry NEVEDI Feed Industry MVO Product Board for MVO VERNOF Edible Oils and Fats Association VAVI Potato Processing Industry VBZ Bakery and Sweets Industry Supported by Dutch Sustainable Trade Initiative - IDH 44
23 First concrete results Retailers - CBL RSPO certified palm oil in all private labels All suppliers need to switch to CSPO Margarine Industry -BNMF RSPO Certified Sustainable Palm Oil in all of their own brands by the end of WWF Palm Oil Buyers Scorecard 2011 More company commitments Not enough concrete results Need for early action to deliver on sustainable palm oil commitments No excuses for companies not to accelerate sourcing sustainable palm oil This is a chance for the Industry to be part of the solution, rather than a part of the problem 46
24 How to Start? 1. Become an active and responsible member of RSPO 2. Make a commitment to sourcing 100% certified sustainable palm oil by 2015 and develop a time-bound action plan 3. Be transparent on your use of palm oil. 4. Start sourcing certified sustainable palm Start with B&C where IP/SG and MB are not yet available. 5. Start investing in traceable supply chains of certified sustainable palm oil 47 Other Sustainability Standards National Standards for Palm Oil: Indonesia - ISPO / Malaysia - MSPO Standards for other Vegetable Oils Soy : RTRS / Proterra / ISCC / Soy-plus / company specific Standards for Biofuels Based on the Renewable Energy Directive (RED, EU) Currently: RTRS, ISCC, RSB, Bonsucro, 2BSvs, RSBA, Greenergy (more to come). 48
25 ISPO and MSPO Value of National Governmental Sustainability Standards Obligatory for all palm oil players Introduction Good Agricultural Practices Raise the Sustainability bar / Set the minimum Important Stepping Stone towards RSPO certification 49 based on a solid history and great achievements Beginning of Responsible Soy Forum in London, United Kingdom Approval of Principles and Criteria document field tests version that establishes cut off date as from May 2009 Tools to make certified soy available to market e.g. certification, IT platform etc. May 2004 November 2006 May 2009 June / 2011 June 2011 Original Creation of the organizing Round Table committee: Responsible Soy Grupo Maggi, Association (RTRS), Cordaid, COOP, in Switzerland WWF, Fetraf-Sul, Unilever Approval of Version 1.0 of RTRS Standard for Production Source: RTRS First South American producers certified Sales of first 160,000 credits 50
26 Certification scheme, covering all kind of biomass Concept Phase Pilot Phase Regular Operations Source: ISCC 51 Sustainability requirements Veg. Oils Biofuels Mandatory (Renewable Energy Directive) European Commission National Governments Focus: Supply Chain Priniciple s: People, Planet, Profit + GHG Schemes: ISCC, RTRS, RSB, Bonsucro, 2BSvs, RSBA, Greenergy, Food / Feed Voluntary (civil society, markets, ngo s) Food / Feed Companies / Retail NGO s Focus: Primary Production Principle s: People, Planet, Profit Schemes: RSPO Palm Oil RTRS Soy ISCC Soy, Rape, Palm,.. 52
27 Future developments? Standards for all Veg. Oils (Rape, Sunflower, etc.) From Voluntary to Obligatory Schemes (Governments / Retail) RED, RTSCP From Primary Production to Life Cycle Analysis More science based Expanding criteria: GHG + Water + (I)LUC Harmonization of Standards One Standard for all Vegetable Oils for Food, Feed and Fuel? 53 Finally Sustainability means doing things better not doing things without Prof. Dr. David T. Suzuki claassen@mvo.nl 54
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