Kalanithi Nesaretnam

Minister

Embassy of Malaysia Gottenburg, 18 May 2017

Malaysia’s SustainabILIY of Palm

Oil FOR BIOFUELS

PRESENTATION

OUTLINE

• Introduction

• EU Resolution on palm oil

and deforestation

• Capping land available for

agriculture/Increasing

production

• Malaysia’s ETP Programme

• Environmental Sustainability

• Conclusion

INTRODUCTION: PALM OIL

OIL PALM TREE WITH FRUIT

BUNCHES

Oil Palm – The Most Productive Oil Crop

Source: Ferrero OpenLab, Paris 14-19 October 2016

SUSTAINABILITY

EU’s DEFORESTATION ACTION

PLAN

Source:

Technical Report 2013-063 European Commission - The impact of EU consumption on

deforestation: Comprehensive analysis of the impact of EU consumption on deforestation

Malaysian Palm Oil

Board

Palm Oil and Deforestation of Rainforests 2016/2222 (INI)

Main Elements of the Resolution

• A call for Single Certification for Sustainability (by 2020)

• A recognizable sign on food products for consumers to

see that P.O is sustainably produced

• EU Commission to consider a tariff for unsustainable palm

oil vs. sustainable palm oil – calls for “polluter pays”

• Phasing out of vegetable oil including palm oil for biofuel

• Human right issues – child/forced labor, land grabbing,

discrimination of indigenous communities…

EU’s Action Plan on Deforestation The European Commission has launched a study on palm oil (environmental, social and economic aspects of oil palm production and palm oil consumption) A gap analysis of existing certification schemes will also be undertaken. A validation workshop will be organised to gather palm oil experts on 7 September The final report will be available by the end of 2017.

MALAYSIAN PALM OIL-

SUSTAINABLE PRACTICES

Year

85%

15% Others

Oil Palm Area

Percentage of Land Area in

Malaysia Planted with Oil Palm

Malaysia Land Area

(mil hectares)

Oil Palm Area

(mil hectares)

% Percentage

Peninsular Malaysia 13.18 2.55 19.35

Sabah 7.4 1.43 19.32

Sarawak 12.445 1.02 8.20

Total 33.025 75 15.14

Source: Ministry of Plantation Industries and Commodities Malaysia, Department of Agriculture,

Malaysian Rubber Board, Malaysian Cocoa Board, and MPOB

Source: Malaysian Palm Oil Board

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

Palm Oil Rubber Cocoa Coconut

1990

2011

Conversion of Other Crops to Oil Palm

(million hectares)

Year

17,60%

11,80%

26,40%

44,20%

Peninsular Malaysia

(2011)

Sabah (2011)

Sarawak (2007)

Non-Forested Areas

Total Area = 33.025 million ha

Forested Area = 18.388 million ha

55.8%

Malaysia: Forested Area

Distribution of Forest in Malaysia

Versus Other Countries

… producing more with less is a vital part of sustainable agricultural production …

Malaysia’s

Economic

Transformation

Programme

(2010-2020)

National Key Economic Areas (NKEA)

Sustainability Implication of EPP5:

i. Biogas from mills contain 65% methane and 35% carbon dioxide

ii. About 17 million tonnes of CO2 equivalent can be avoided

Objective:

• To ensure that mills

capture methane gas to

produce electricity for

supply to the national grid

or for their own use

Impact:

• This EPP will generate an

estimated USD0.97 billion

in GNI in 2020 while

creating 2,000 jobs and not

requiring any incremental

Government funding

EPP 5: DEVELOPING BIOGAS AT

PALM OIL MILLS

IMPROVEMENT IN DIRECT EMISSIONS

REDUCTION

Flaring only; 39

CHP only; 12

Electricity generation

only; 24

Others; 2

• 9 mills selling electricity to grid

• 2 mills supply electricity to external users.

• Mills generate electricity for ancillary uses/sell biomass to

external users as fuel

As of October 2015 : 77 mills out of 430 with biogas capture

ETP : All mills to capture biogas by 2020. 50% supply Electricity to grid

The holistic approach is all about BALANCING the 3Ps:

PEOPLE

(Social development of the people)

PLANET

(Conservation & management

of the environment)

PROFIT

(Economic development

for progress of nation)

Planet

Profit

People

Malaysian Perspective on Sustainability

Social Responsibility

Environmental Health Economic Profitability

PLANET

Environmental Requirement:

Well Regulated Industry

Land Matters:

• National Land Code 1965

• Land Acquisition Act 1960

Environmental Matters:

• Environmental Land Conservation

Act 1960 revised in 1989

• Quality Act 1974 (Environmental

Quality) (Prescribed Premises)

(Crude Palm Oil) Regulation 1977

• Environmental Quality (Clean Air)

Regulation 1978

• Environmental Quality (Prescribed

Activities) (Environmental Impact

Assessment) Order 1987

Labour and Employee Matters:

• Labour Law

• Workers’ Minimum Standard of Housing &

Amenities Act 1990

• Occupational Safety & Health Act 1977

Pesticide Use:

• Pesticides Act 1974 (Pesticides Registration)

Rules 1988

• Pesticides (Licensing for sale & storage)

Rules 1988

• Pesticides (Labeling) Regulations 1984

• Factories & Machinery (Noise Exposure)

Regulations 1989

Wildlife Matters:

• Protection of Wildlife Act 1972

IMPLEMENTING NEW TECHNOLOGY AND

GOOD AGRICULTURAL PRACTICES (GAP)

FOR OIL PALM

• Reduction (optimisation of fertiliser inputs)

• Accumulation of soil carbon in replanting

• Recycling of oil palm biomass

• Implementing zero burning

• Planting of leguminous cover crops

• Integrated Pest Management

Technology and Good Agricultural

Practices (GAP) to Reduce GHG

Emissions

• Reduced need for mineral fertilisers

and therefore reduces GHG emissions

from production and use of fertilisers

• Avoids GHG emissions from burning

of tree residues during replanting

Recycling of Biomass with

Zero Burning

ZERO BURNING POLICY Open Burning is NOT Tolerated during Oil Palm Replanting in

Malaysia

Sustainable Practices Adopted by the Industry (7)

• Management of pests, diseases,

weeds and introduced species

• An effective Integrated Pest

Management systems exists

• Use of natural predators, beneficial

plants

• Use of natural biopesticides like

Metarhizium, Bt etc. to reduce

pesticides

• Use of agrochemical is minimal

hence reducing GHG emissions

from their production and

application.

Integrated Pest Management

Malaysian Palm Oil

Board

Current Status of MSPO Mandatory Requirement of MSPO:

– Announcement by YB Minister (Feb. 24, 2017)

– Companies with RSPO* : Dec. 31, 2018

– Companies without RSPO : June 30, 2019

– Smallholders : Dec. 31, 2019

* RSPO certified premises will automatically get

MSPO Certification

As of Dec. 2016:

222,330 ha of Malaysian oil palm plantation are MSPO

Certified

• 215,979 ha of private estates

• 6,351 ha of oil palm area by smallholders

As of Feb. 2017:

929,081 ha of oil palm plantation are RSPO certified,

producing ~ 3.73 Mil tonnes of CSPO

RSPO Certified (as of 5 September 2011)

Growers Certification

Growers: 71

Palm Oil Mills: 308

Volume CSPO: 12,107,384 MT

Volume CSPK: 2,757,378 MT

Production Area: 2,465,803 ha

Supply Chain Certification

Companies:

http://www.rspo.org/certification/supply-chain-certificate-holders

Facilities:

RSPO Certified (as of 31 December 2016)

Volume of CSPO from Malaysia : 3,580,025 MT (30%)

Wildlife Action

Plans

Sabah Wildlife Conservation Colloquium January

2012 Jointly Organised by Sabah Wildlife Department (SWD), Malaysian Palm

Oil Council (MPOC), Borneo Conservation Trust,

Danau Girang Field Centre & HUTAN

Government-Industry-NGO

Collaboration

Zoos, NGOs Involved in In-Situ Conservation

in Sabah

Malaysian Palm Oil Boar

Revised Renewable Energy Directive (RED II)

• On 30 November 2016, the European

Commission published a proposal for

a revised Renewable Energy

Directive (RED II) for the years 2021

through 2030

• Share of energy from renewable

sources in 2030 at least 27%

• Contribution from biofuels, bioliquids

and biomass fuels consumed in

transport, if produced from food or

feed crops, reduce to 3.8% in 2030

(from current limit of 7%)

• Obligation to blend minimum levels

of advanced biofuels from 2021

onward, start at 1.5% of energy in

transport fuels in 2021 and ramp up

to 6.3% by 2030.

CONCLUSION

1. Biofuels are a good renewable

alternative to fossil fuels

2. Palm oil is a sustainable source

3. Malaysia we have announced B10

blending

4. We fear that inconsistent and

changing policies from the EU may

reverse a lot of the good work already

done

Thank you 47