Sustainable palm oil producers earn over $6m trading GreenPalm certificates

Sustainable palm oil producers in Asia have earned more than $6m in premiums via the GreenPalm certificate trading programme.

Since trading began 19 months ago, more than 650,000 GreenPalm certificates have been traded online, as manufacturers and retailers have bought them to off-set the use of palm oil in their products.

GreenPalm enables businesses to support sustainable palm oil production by rewarding producers for using responsible methods as set out by the Roundtable on Sustainable Palm Oil (RSPO).

Producers who have been audited by the RSPO and found to meet its principles and criteria earn one GreenPalm certificate for each tonne of palm oil they produce sustainably. These certificates are then offered for sale on the trading platform of www.greenpalm.org, where manufacturers and retailers can bid for and buy them.

Buyers of GreenPalm certificates include retailers such as Marks & Spencer, Waitrose, Co-operative, Tesco and Asda, and brands including Unilever, Cadbury’s, Burton’s Foods, United Biscuits and Ginsters.

GreenPalm certificates enable businesses to give practical support to sustainable palm oil production while using their existing supply chain. For a company to buy certified sustainable physical palm oil, each party in the supply chain must be registered with and audited by the RSPO, and the material must remain segregated at each stage, which for most businesses is a long and costly process.

In addition, while crude palm oil is available in a certified sustainable form, many of the blends and derivatives required by most manufacturers are not currently on the market.

This makes GreenPalm a solution for businesses that want to show commitment to sustainable palm oil production immediately, until physical material becomes a viable option.

Another benefit of GreenPalm is that smallholders – who in total produce about 40% of the palm oil from the main production areas of Malaysia and Indonesia – can also earn rewards for working ethically, even though their product is largely consumed locally and not exported to markets where there is a demand for sustainable palm oil. This means the production itself is supported in a way that boycotts in places such as the UK and Europe will not achieve.

GreenPalm general manager Bob Norman said: “This is another big milestone for GreenPalm and demonstrates how well the system is working. GreenPalm is the next-best option for companies that cannot yet buy or use certified sustainable palm oil, as it allows them to start supporting sustainability at its source.

“The result is that more palm oil producers have seen the benefits of using sustainable production methods – such as not planting on primary rain forest land or areas with a high conservation value. It takes time, effort and money for them to become audited and certified by the RSPO so if they can see a clear commercial advantage then it makes the process both worthwhile and affordable.

“Palm oil has become globally important because it’s a cheap, fast-growing and high-yielding food source, which is necessary to feed an increasing world population. If people stopped using palm oil, another crop would be grown instead, but with around ten times more land required to produce an equivalent amount as palm.

“The ideal situation is for all palm oil to be produced sustainably. It is possible, but it can’t happen instantly, only by giving the people running the plantations the support and incentives they need to work sustainably. GreenPalm was designed as a tool to do just that, and this is why it has proven so popular.”

« back to blog index