The substantial expansion of palm oil plantations has emerged as a key driver of deforestation, particularly in Southeast Asia, leading to significant forest loss. A study published on the NCBI highlighted regional deforestation trends associated with oil palm agriculture, revealing that 45% of sampled oil palm plantations in Southeast Asia originated from areas that were forests in 1989, while the percentage for South America was 31% (National Center for Biotechnology Information, 2016)
In terms of economic growth, palm oil plays a crucial role in Indonesia's development, with approximately 60% of the country's palm oil production exported in 2019. The export value of palm oil reached USD 17.4 billion in 2020 (Cifor, 2023). Concurrently, the European Union (EU) serves as a significant importer of palm oil, importing 8 million metric tons (EUR 6.3 billion) in 2021 (chainreactionresearch, 2023). The substantial global demand for palm oil necessitates alignment with regulations, prompting businesses to source palm oil from deforestation-free origins and adhere to EUDR requirements.
The EU proposes a regulation on deforestation-free products, impacting the palm oil industry with mandatory due diligence and traceability requirements where businesses engaged in the importation of palm oil and its derivatives into the EU are granted to comply with the law.
Mandatory due diligence system
Operators as well as major traders, are obliged to fulfill various criteria. These include collecting information, conducting risk assessments, and implementing risk mitigation measures when required. Subsequently, they must provide a due diligence statement attesting to their compliance. Notably, small and medium-sized enterprises (SMEs) are exempt from these obligations.
Traceability Requirements
A key aspect of the Regulation revolves around the proposed comprehensive traceability of commodities identified as having deforestation risk throughout the entire supply chain. The traceability mandate encompasses specifying the geographic location with coordinates of the "plots of land" where the commodities are cultivated. To achieve 100% traceability to plantation, we collaborate with stakeholders to map producers within their supply chain. We perform detailed risk assessments for each producers and plot, including large-scale plantations that can be verified for EUDR compliance.
These measures are essential for ensuring compliance with the EUDR and providing transparency in the supply chain to prevent products associated with deforestation from entering the EU market.
In navigating the complexities of the palm oil supply chain, we emerge as a trusted & reliable partner for businesses to comply with EUDR requirements offering a comprehensive strategy beyond mere traceability. Our focus on transparency, risk mitigation, mapping, legality, certification, and training ensures a well-rounded solution for businesses striving to meet EUDR standards.
Supply Chain Verification: Our system supports transparent and reproducible data, tracing the journey from palm oil plantation to processor. Field Agents facilitate training, local collector engagement, and transaction registration, categorizing palm oil produce for targeted interventions.
Producers Mapping and Surveying: Through surveys and mapping, we empower clients to make informed decisions by verifying palm oil farm practices, ensuring compliance with sustainability standards, and promoting responsible palm oil sourcing.
Land Legality and Certification Preparation for Palm Oil: We assist palm oil producers in obtaining legality documents and guide them through certification procedures (e.g., ISPO, RSPO), contributing to sustainable and responsible palm oil practices.
Training & Coaching: We transform palm oil data into actionable insights, offering group training sessions and one-on-one coaching to address palm oil producers' fundamental challenges and fostering a commitment to sustainability aligned with EUDR requirements.
In sustainable palm oil production, we are your dedicated partner, offering solutions that surpass the EUDR requirements. Our commitment to comprehensive palm oil traceability, risk mitigation, and producer support positions us as a trustworthy ally for businesses seeking alignment with EUDR mandates and a path toward sustainable practices.
Contact us today to discover how our tailored solutions can enhance your palm oil supply chain, ensuring compliance and a genuine dedication to sustainability. Let's collaborate to positively impact the palm oil industry and contribute to a more sustainable world.
Resources:
National Centre for Biotechnology Information. The Impacts of Oil Palm on Recent Deforestation and Biodiversity Loss. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4963098/
Chain Reaction Research. https://chainreactionresearch.com/report/eu-deforestation-regulation-implications-for-the-palm-oil-industry-and-its-financers/
European Comission. Implementation of the EU Deforestation Regulation. https://green-business.ec.europa.eu/implementation-eu-deforestation-regulation_en
Writer: Rihlah Bilkis, Social Media at Koltiva
Editor: Boby Hermawan, Head of Digital Marketing at Koltiva
About the Writer:
Rihlah Nahdhiyah Bilkis, a skilled writer with a social media and copywriting background, excelled as a social media specialist at Koltiva, crafting captivating articles on products and producers stories for the company's blog, showcasing her unique ability to blend technical details with human narratives. Her strategic approach to social media has been instrumental in connecting with the audience, making her a promising talent in content creation.
Koltiva's commitment to transparency and traceability is impressive! They're not just following rules; they're leading the way to a more sustainable palm oil industry.
While palm oil drives Indonesia's economy, the EU's move to regulate deforestation-linked products is a hopeful step. Let's hope for a greener, responsible future.
The KoltiTrace MIS features seem like practical tools for ensuring responsible palm oil sourcing. These could be game-changers in meeting the EU's sustainability standards.