MPOC to address palm oil issues at IPOSC 2022
KUALA LUMPUR: The Malaysian Palm Oil Council (MPOC) said it will address issues related to palm oil certification and sustainability by focusing on decarbonisation as well as achieving net zero and carbon neutrality in the 7th International Palm Oil Sustainability Conference (IPOSC) 2022 held yesterday.
MPOC chief executive officer Wan Aishah Wan Hamid said the conference will also highlight challenges, particularly on the impact of Environmental, Social, and Governance (ESG) and green financing on agricultural commodities, especially palm oil as well as climate change and deforestation-linked legislations.
“There will be presentations by policy makers, experts, and the industry focusing on Malaysia’s net zero pathways, and decarbonisation opportunities such as carbon trading and green financing, the impact of ESG reporting, as well as deforestation regulations.
“Mechanisms and facilities required to support independent smallholders to meet global sustainability requirements will also be discussed,” she said in her welcoming remarks at IPOSC 2022.
Wan Aishah said in the last few decades, the palm oil industry has faced multiple sustainability challenges from accusations of deforestation and the attrition of endangered wildlife, to global warming, the sustainability of palm-based biofuels, and the recent forced labour issues in the United States (US).
“Firstly is the emergence of new international climate change and deforestation-linked legislations that are potentially trade barriers.
“These legislations are a result of countries seeking to mitigate the adverse effects of climate change by decarbonising, limiting global warming, and achieving carbon neutrality or net zero by 2050,” she said.
She said a number of legislative developments have emerged such as the European Green Deal in 2021, which includes the Carbon Border Adjustment Mechanism (CBAM), designed to impose levies on imported goods produced with high GHG emissions.
“In addition to this, we will also anticipate the European Union’s upcoming Regulation on DeforestationFree Products, as well as the US Forest Act Bill, which will penalise products whose supply chains are found with elements of deforestation.
“These policies and legislations could form an indirect trade barrier, as developing nations like Malaysia will incur a higher cost of compliance to gain market access.
“Palm oil will be one of the few commodities under scrutiny due to its perceived role in driving deforestation,” she said.
Wan Aishah said in addition to the climate change and deforestation-linked legislations, corporate investors, trust funds and financial institutions have begun to also impose ESG criteria in their investing and financing requirements.
“Green financing is also now at the forefront of sustainable and responsible financing, as banking institutions are placing more emphasis to support business models and initiatives involving sustainable, carbon neutral, and ESG compliant investments. “These developments will greatly impact the way companies operate, as corporations with better sustainability commitments and efforts will gain an edge over their corporate peers,” she said.
However, Wan Aishah said industry stakeholders without sufficient financial, technical and manpower support will be adversely affected, especially for independent smallholders in Malaysia, which have struggled to achieve 100 per cent certification for sustainable palm oil certification schemes, and will now be burdened with these additional sustainability requirements.
Hence, she said through IPOSC 2022, industry stakeholders will have a better understanding of how these issues will impact the palm oil industry, what are the potential market barriers and the opportunities to forge partnerships and collaborations.
Close to 300 local stakeholders and representatives from embassies of the EU, China, France, Romania, Spain, and Sweden attended the conference.