Consumer governments role in supporting sustainable pam oil production

1. GOVERNMENT’S ROLE IN SUPPORTING
SUSTAINABLE PALM OIL
Sara Eppel
Head of Sustainable Products and Consumers
Defra

2. About the presentation
1. Current UK Government actions on sustainable palm oil
2. Evidence study on UK palm oil consumption
3. Possible future Government actions
4. Questions

3. UK Government interests in sustainable
palm oil
• Defra: Ministers; green economy, global environment, food
and animal feed.
• Other Government Departments,
 Department for Energy and Climate Change
 Department for International Development
 Department for Business, Innovation and Skills
 Foreign and Commonwealth Office
 Department for Transport.

4. Policy approach
• Complex issue and shared responsibility - businesses,
Governments and NGOs working together
• A lot already being done (eg RSPO standards and
certification; big business commitments to sustainable
sourcing; third sector publicity about good and bad
practice)
• Assist the transition towards sustainable production and
consumption. Not duplicate or take over action by others.

5. Government Actions
1. Intergovernmental forest finance agreements
2. Bilateral working with the Indonesian government
3. Sustainability criteria for biofuels (EU Renewable Energy
Directive, UK Renewable Fuel Obligation, ROCs).
4. Project with RSPO on a robust greenhouse gas standard.
5. Project with the Chinese Chamber of Commerce.
6. Evidence study to map UK palm oil supply chains

6. The evidence study
• Announced by Caroline Spelman July 2010
• Being published today
• Aim was to bring together data to:
 map UK palm oil consumption,
 understand how far current commitments
will take us
 consider how much further there is to go, and
 consider where efforts should be focused.

7. Method and evidence sources
3 main approaches to data and information collection:
1. Desk-based review
2. Systematic interviews and questionnaires to supply
chain.
3. Collecting stakeholder views at meetings, presentations,
workshops
Caveat: The report is designed to give a best estimate of flows
and quantities, it includes assumptions about market shares
and product ranges so the numbers are only a guide.

8. About 595,000 metric tons of palm oil was imported into the
UK in 2009. Most of this came from Malaysia, Indonesia and
Papua New Guinea and the Solomon Islands.
In addition to the palm oil shown in this
diagram the UK imported:
• about 660,000 metric tons palm kernel
meal, mainly from Indonesia, 5x oil import
about 45,000 metric tons of palm kernel oil,
also mainly from Indonesia, and
•a significant volume in finished products,
likely more than 300,000 metric tons

9. Global significance and trends
The UK import is equivalent to
• Approx 1.2% of global palm oil and palm kernel oil production.
• Approx 10% of the global output of palm kernel meal.
Quantities of palm oil imported to the UK have decreased by 40%
over the past five years. Reasons may include
• Changes in commodity prices, ??brand damage??
• Food manufacturers seeking to reduce saturated fats, and
• Drop in use of palm methyl ester for biodiesel (by 50% between
2009/10 and 2010/11).

10. Main UK uses of palm oil
• Food sector use is estimated to be 68% of the total UK import of
palm oil and palm kernel oil. Biscuits make up the largest share of this,
using over 20% of the total import of palm oil. Frying fats, snacks,
confectionary and dairy and dairy replacers also use significant
quantities.
• Animal feed use (also ultimately for food) also very significant.
Estimated 23% of the imported palm oil and palm kernel oil, plus over
80% of the imported palm kernel meal, is used for animal feed

11. Main UK uses of palm oil are in food and animal feed.
Chart shows palm oil, palm kernel oil, biofuel fractions and oleochemicals
but not finished products.
Also additional 660,000 metric tons palm kernel meal mainly used for
animal feed (but this is a by-product and does not drive production).

12. Sustainability
• Of the 643,400 metric tons of palm oil and fats the UK
imported in 2009, it is estimated that 24% is sustainable.
• It comprises:
o approximately 54,500 metric tons RSPO certified (about 40,000 mt
from UK refineries and 15,000 mt from European refineries)
o 93,000 metric tons GreenPalm certificates purchased by UK
companies

13. Sectoral progress towards sustainable palm
oil consumption
• Biofuels industry is covered by mandatory EU sustainability
standards.
• Food sector: c37% volume of palm oil and palm kernel oil supplies
being sustainable. Hospitality industry lagging behind manufacturers
and retailers.
• Animal feed industry lagging (certified sustainable palm kernel meal
has not been available for as long as certified palm oil and palm
kernel oil.
• Government Buying Standards do not currently mention palm oil
sustainability
• Significant progress made by big businesses, but much of the UK
market is made up of small and medium sized enterprises.

14. Policy options and next steps
Study is just being published today, next steps under
consideration:
1.Support for key business sectors and government
procurers
2. Voluntary agreements
3. Business reporting guidance
4. Government procurement
5. International influencing

15. Further information
2 evidence study reports -
supply chain mapping and
policy options at:
www.defra.gov.uk/environment/
natural/deforestation/
Sara.Eppel@defra.gsi.gov.uk or
Alice.Baverstock@defra.gsi.gov.uk