The development of sustainable palm oil, the misinformation around its production and how palm oil will be instrumental in providing the future mix of edible fats and oils.
Edible oils and fats play an important role in our daily lives. They are essential for our everyday health and wellbeing. At the same time, edible oils and fats play a critical role in many economies worldwide. As the global population grows, so does the global demand for edible oils and fats. With all oils and fats having a part to play, the big challenge lies in meeting current and future demand in a sustainable manner. Palm oil, specifically, is a major driver of biodiversity loss. Voluntary standards attempt to address biodiversity decline, yet there is huge variation between standards on criteria related to biodiversity protection and level of assurance. A new benchmark report by IUCN NL helps companies and governments move towards sustainable palm oil, by providing insight in the quality and in the level of assurance of sustainability standards for palm oil.
Over the last decades, consumers may have less knowledge or have been incompletely informed and have therefore turned critical of the nutritional and sustainability aspects of palm oil. Due to joint education campaigns by experts and local organisations this critical image of palm oil has largely stabilised in the past two years. Facing the COVID pandemic consumers have become more conscious of their personal choices, this may have contributed to a willingness to dive a bit deeper and create a better understanding of how palm oil fits in a responsible lifestyle and a nutritionally balanced diet.
Oil palm cultivation can be one of the most sustainable and economically viable industries when carried out in an ethical, socially, and environmentally responsible manner, with sound, sustainable and integrated agronomic practices. In Sri Lanka, oil palms have been grown as a commercial crop for over 50 years. Its environmental impact has been determined to be similar to that of other crops such as rubber, making it an excellent environmentally responsible choice to complement traditional crops. In Sri Lanka, the strict regulatory framework that the palm oil industry operates in assures its accountability and sustainability. Land allocation for oil palm plantations is less than 3% of the total for all plantation crops including tea, rubber and coconut. Oil palms can also only be grown in existing plantations where the cultivation of traditional crops is no longer viable due to soil conditions or disease.
Margot Logman, Secretary General European Palm Oil Alliance says: “Due to its versatility, palm oil is and will be used in mixes of fats and oils and easily fits in a nutritionally balanced diet and lifestyle. It is naturally smooth and stable and was used in the nineties to replace and rid of harmful trans fats used in foods in Europe. Palm oil is a high-quality ingredient and when produced sustainably it will help feed generations to come.”
The palm oil crop is using an estimated 6.6% of the land destinated to produce vegetable oil crops, it meets 38.7% of the demand for those crops. ‘Forum for the Future’ reviewed sustainability and nutritional aspects of different oils and fats including palm oil in an extensive report: ‘Breaking down fats and oils’. It tells us that due to its versatility and high yields, sustainable palm oil has a stable position in the future demand for oils and fats.
“Due to its versatility and high yields, sustainable palm oil has a stable position in the future demand for oils and fats”
At EPOA, all members are also RSPO member (Round Table on Sustainable Palm Oil). Furthermore, they have a commitment to NDPE, or ‘No Deforestation, No Peat and No Exploitation’. “To date this is one of the most important commitments that have been made by any agricultural industry,” Logman continues. “It signifies that palm oil production is not linked to deforestation, cultivation on peat land or exploitation of workers or indigenous people. Each of the three pillars creates specific goals for the industry to meet. They are all focused on protecting our planet’s resources and the people who grow them and live among them. With the increased scrutiny these goals bring to the industry, they also help to give consumers the reassurance they need when buying products containing palm oil.”
An NDPE commitment not only means a thorough understanding of what is needed, but it also is a promise to track progress, identify gaps where more action is needed, and work together across borders to implement the necessary changes. “Via joint efforts and cooperation with sustainable palm oil initiatives in different countries big steps have been taken, and we are proud to say that in 2019 in Europe 86% of the palm oil imported was certified sustainable,” Logman adds.
“Together with other frontrunner organisations, companies and NGOs supportive of the global transition to sustainable palm oil, we joined the Sustainable Palm Oil Choice or SPOC,” she explains. Many different experts and NGOs help organise and publish webinars and short inspiring stories, while companies are challenged to follow the eight steps to become a frontrunner in sustainable palm oil.
Building a sustainable society
Fuji Oil Group has been producing plant-based food ingredients ever since its establishment and says it has developed the know-how to maximise the potential of plants. Plant-based ingredients encapsulate enormous possibilities, with the potential to solve global problems. Fuji Oil says it works to tackle global challenges in order to contribute to building a sustainable society.
The latest developments that are most notably seen in oils and fats in confectionery products are sustainability and transparency, health and lifestyle changes, premiumisation, happiness and indulgence.
“As a B-to-B-for-C manufacturer of both plant-based oils and fats and fillings/coatings, the consumer plays an important role in our product development,” says Karen Saey, Product Manager at Fuji Oil Europe.
Consumers are questioning their own lifestyle and are looking to improve their impact on the planet’s health, as well as on other people’s lives. They increasingly and rightfully hold companies accountable for what happens in the raw material supply chain, for example with regards to human rights and deforestation.
“In the confectionery category, we find that 30% of all new product launches in Western Europe from 2017 till today hold an ethical human claim and 10% an ethical environmental claim with both claims having a growth rate exceeding that of other category positionings. Examples of such claims are Sustainable Palm Oil, Rainforest Alliance certified, Forest Stewardship Council, and so on,” explains Saey.
“Within the oils and fats, it is of vital importance to grow the amount of sustainable palm oil to avoid deforestation and drive conservation efforts. Traceability is fundamental to identify supply chain risks because this creates transparency and allows us to engage our suppliers to improve practices, with time-bound implementation plans.
Fuji Oil’s RSPO segregated palm oil is said to be guaranteed deforestation-free and 100% traceable to plantation. This way, we can manage and monitor well to ensure that environmental and human rights are respected. In support of this, we have engaged a third party – Earthqualiser Foundation – who conducts daily satellite monitoring.
Saey adds: “An example of ultimate traceability is UniFuji, our unique concept with plantation, mill and refinery on one location, to grow and produce sustainable, RSPO segregated palm oil and its fractions, fully complying NDPE principles (No Deforestation, No Peat Development, No Exploitation).”
Health and lifestyle meet happiness and indulgence
Currently, shea trees grow naturally without any farming or plantation, in the dry West African savannah park lands. Compared to the highly organised agricultural system of palm oil, the contrast could not be bigger. The shea supply chain starts from collectors (small quantities per collector), which are mainly women. When women succeed to be organised in cooperatives, they can sell larger quantities and have better negotiation power as well as direct access to the shea processing industry.
Fuji Oil has its own logistics and processing facilities in Ghana, Fuji Oil Ghana. They commit to local value creation through 100% local processing of the shea kernels and fractionation of shea butter to shea stearin.
Saey says: “Further, we focus on the preservation of green areas of shea trees and zero deforestation. As the endemic poverty is the source of many other issues, we are dedicated to grow the women cooperatives. For this we have a program, and year after year, their capabilities grow to the level that they do not need pre-financing anymore. Additionally, in consideration of our environmental footprint, we promote changing to non-fossil fuels as energy source for our Fuji Oil Ghana production activities. Tebma Kandu is our program covering all initiatives and actions aiming at fulfilling our commitments.”
“The latest developments that are seen in oils and fats in confectionery products are sustainability and transparency”
Fats and oils are an essential part of our diet, to support cell growth, provide energy, absorb nutrients and to produce important hormones. In bakery products, fats fulfill numerous roles – providing the desired mouthfeel and flavour experience, easy aeration, quick setting, the aimed texture and hardness, anti-bloom properties, expertly engineered processability adapted to the manufacturer’s’ capabilities. In categories like dairy, meat (substitutes) and ice cream there is a decent rise of plant-based offerings. Sustainability is now seen as a prerequisite and an enabler to aid at accomplishing the UN sustainability goals.
Margot Logman, Secretary General European Palm Oil Alliance
“We see the trend on deforestation for palm oil slowing down. Joint efforts with local sustainability schemes and private public partnerships as well as moratoria helped the decline in deforestation for palm oil in Indonesia and Malaysia, the world’s main palm oil producing countries (83%).
In food products, oils and fats play different roles and fulfill specific product and nutritional needs and will all be required in the future mix of edible oils and fats. Sustainability challenges should therefore be viewed and addressed in a holistic way to fulfil all requirements and prevent the displacement of sustainability issues to other supply chains.
With 40% of palm oil being produced on smaller farms, it is particularly effective in reducing poverty and helping develop regions in socio-economically deprived areas. Sustainable palm oil production supports reaching at least 9 of the United Nations Sustainable development goals. In many tropical developing countries, the affordable, nutritious and high yielding crop is essential to achieving the first two Sustainable Development Goals (Zero poverty, zero hunger).
At EPOA we believe that palm oil will be instrumental in providing the future mix of edible fats and oils. While we currently see many calls to replace palm oil with other oils and fats, when implemented at a global scale, this will have many undesirable negative impacts on the environment and the people (IUCN). It makes much more sense to create a receptive market and use our leverage in Europe to stimulate the global transition to sustainable production of palm oil and all other oils and fats.”
Karen Saey, Product Manager at Fuji Oil Europe
“Food products are increasingly expected to be tailored to one’s unique way of life, whether it’s vegan, plant-based, keto, ‘free-from’ or another lifestyle choice.
When it comes to confectionery and bakery products, indulgence is continually top of mind for consumers. Additionally, they are looking for snacks that make them feel good about themselves. Finding this balance in a delicious and nutritious treat, gives them a guilt-free moment of pleasure and an energy-boost during the busy day. We have developed the Redusat range, which allows significant – up to 60% – saturated fatty acids reduction without impact on the original texture and taste.
Even though Redusat-fats contain a large amount of unsaturated fatty acids, they crystallise very fast and result in a harder texture and often better heat resistance compared to the traditional, higher SAFA fats they replace.
All these facts – healthier, fast crystallising and with no compromise on texture – makes Redusat a fat range for which we see a growing interest from confectionery and biscuit manufacturers. A typical product example from the bakery category are sandwich biscuits. Redusat enables to slash by half the amount of saturated fatty acids and still keep a well-structured cream. We note that Redusat also attracts attention because of the origin of its ingredients, being shea and sunflower and serving those who are seeking other than palm-based solutions.”
Bridging the gap – the economic case for oil palm
Sri Lanka has made important progress towards diversification in invaluable cash crop, spearheaded by the country’s regional plantation companies (RPCs), and in alignment with the Government’s stated aim of cultivating 20,000 hectares of oil palm. From the perspective of the domestic economy, the reasons for this diversification are undeniable.
In 2015, Sri Lanka’s annual edible oil requirement stood at 160,000 Metric Tonnes (MT). Conversely, the country produces a total of just 53,000 MT of coconut oil and 18,000 MT of palm oil, leaving a deficit of 89,000 MT in the island’s edible oil requirement. Notably, this data actually excludes all other vegetable and plant-based oils, meaning that the country’s actual total requirement is even higher.
While these dynamics present notable challenges to the Sri Lankan economy, particularly in terms of the depletion of foreign exchange, they also speak to vast untapped potential for import substitution and export development. In 2015, Sri Lanka spent Rs. 20.8 billion on oil and fats imports with a significant majority of those imports being for palm oil. Collectively, palm kernel, palm oil in, palm stearin and crude palm oil accounted for 164,835 MT or nearly 30% of all edible oil and fats imported into Sri Lanka.
Hence purely from a demand perspective, we can clearly see that there exists a clear, strong, pressing demand for oil palm, both locally and internationally. Similarly, the supply-side economics of oil palm are equally persuasive.
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Editor, International Bakery
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