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Carbon Footprint of Malaysian Palm Oil and Future Areas of Research
Dr Chan Kook Weng
Malaysian Palm Oil Board
No 6 Persiaran Institut, Bandar Bangi Baru, 43000, Kajang, Selangor
Abstract
The world has gone green. The palm oil industry to make itself heard, credible and authentic
has to minimize the risks of being accused of greenwashing. The increase demand for solid
data from the industry based on LCA approach to demonstrate carbon balance, the green
commitment and achievements require the industry to walk the talk. Things are changing
where singing the song like “sustainability of a hundred years without supporting data on
Greenhouse Gases (GHG) emissions” is tantamount to failing to match the fine words
without positive actions in implementing green policies throughout the business. Following
the release of the UNFCCC IPCC Fourth Assessment Report, the Stern Report, and the Bali
Roadmap in 2007, governments across the globe are developing regulations and incentives to
reduce GHGs emissions. Aligning the walk-talk requires companies to articulate and
communicate how their employees, investors, NGOs, stakeholders and customers are driving
the industry to give equal emphasis of a well-balanced three-pillared sustainable
development of economic growth, environmental protection and social development.
Companies become energy efficient and offset their emissions, measured in t of CO2
equivalence (tCO2e), by purchasing credits (of tCO2e that have yet to be emitted) voluntarily
or from a regulated scheme to balance their exceeded allowances (in tCO2e emitted) so as to
be carbon neutral. In the market, such transactions must require creditable data and
information on carbon to support environmental claims. Hence the industry in assembling a
carbon balance budget over a 25 year cycle will require urgent conformity to internationally
accepted methodologies to quantify the carbon footprint of their products, services and
events. This becomes critical to support claim, encourage carbon market growth and protect
consumers. Increasingly the code of good practice establishes a basic framework for
application of large number of ISO standards used by companies to measure and
communicate their carbon footprint.
The interest, centred on the GHG emissions reduction, requires inventories associated with
the carbon footprint of the products, services and events in the industry be examined from
LCA and eco-labelling approach. This is done to meet demand, firstly, of customers who
want reduction in carbon footprint; secondly, for companies that want less carbon intensive
or neutral products; and thirdly, for governments that want innovative ways to address
climate change. To avoid conflicting approaches to measure GHG emissions, ISO’s
harmonised set of common ISO 14000 series standards comprising of i) ISO 14040 life cycle
assessment of emissions from sourcing to end-of-life, ii) ISO 14064 and ISO 14065 to ensure
apples-to-apples comparison of emissions, iii) ISO 14025 to communicate carbon neutral
claim based on environmental product declaration for eco-labelling; and iv) ISO 14062 to
manage and reduce the environmental burden of carbon footprint, are used. Currently
ISO/TC 207 Sub Committee (SC 7) on greenhouse gas management and related activities has
began developing newer standards specifically for measuring and reducing the carbon
footprint of products, services and events worldwide. R&D focus on new practices aimed to
reducing GHG emissions, keeping yields and nutritional quality high, and maintaining
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resource input as low as possible before attempting “sustainability” branding is well on the
way to reduce climate change.
Introduction
In today’s globalized world, climate change will influence future development in any
industry. The overarching requirement is to look into ways to reduce the greenhouse gases
(GHG) emissions by applying ISO 14064 and ISO 14065 standards. The palm oil industry is
not excluded. Companies within the palm oil industry in order to have a wider global reach
must inspire trust and confidence in their products, services and events by demonstrating
conformity assessment to international standards, like ISO 22000 for those food products
which present high risk to health, ISO 18000 for safety and environment; and corporate social
responsibility standard ISO 26000 to drive big industries as well as small and medium
enterprises (SMEs) to embrace these standards to meet environmental and societal needs as
well as global market requirements.
In so doing, the challenge is to ensure that the activities in conformity assessment are seen to
have been performed adequately so that such products are firstly, not barred for sale in
specific markets and secondly, not led to establishment of trade barriers between exporting
and importing countries. As the reputation of a palm oil producing company is constantly
under scrutiny, it can easily be damaged when not careful. For instance, individuals can act
through internet to report or do blogging on information obtained on products that have not
been conducted according to the approved international standards that have been developed
based on international consensus. Such reputation, which can easily be destroyed, may take
years to rebuild. It is important therefore that Malaysian Palm Oil Board (MPOB) takes on
the responsibility to oversee that the integrity of conformity assessment over the whole
supply chain of the palm oil industry is above any type of criticism. Thus adopting
international standards effectively is likely to create a level playing field that allows
producing countries to operate from the same base. Most critically, the correct use of
international standards should assure all that GHG emission reductions are real and human
can make real progress towards climate change.
For this, five initiatives have commenced by the industry to explore global solution. They are:
1. Building Confidence in Harmonising Global Approaches in Computing Carbon
Balance: Currently, the oil palm industry has started working on carbon balance but
rather than rushing into it, the search is for some standardised methodologies that is
agreed multilaterally to allow for comparison of carbon use between competing oils.
Even before harmonising could be done, some companies have started to use some ad
hoc methods to calculate carbon balance with the hope of getting a share of the carbon
market with their carbon credit calculation. Such companies are aiming to trade in the
carbon market to gain some “green currency” from their sale of carbon credits by
offering them firstly, to the regulated market that is well developed, implemented and
enforced through regulations such as the European Union (EU) Emission Trading
Scheme (ETS); and secondly, to the voluntary market which is outside the formal
government regulation.
Irrespective of these two types of markets, it is important that credibility of the carbon
unit is maintained in that one tonne of CO2 or CO2 equivalent (CO2e) is indeed
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ascertained as one tonne as the “green” currency traded. The CO2e is a measure used
to compare the emissions from various greenhouse gases (GHG) based on their global
warming potential (GWP). In the agricultural field, the GWP of emission of one tonne
of GHG like methane (CH4) means that over 100 years, one tonne of CH4 is
equivalent to 21 tonnes of CO2. Likewise one tonne of nitrous oxide (N2O) emitted is
equivalent to 296 tonnes of CO2.
In the carbon markets, two types of carbon units: viz., “allowances” representing one
tonne of CO2e emitted into the air and “credits” representing one tonne of CO2e that
has yet to be emitted, are traded. Any individual or organisation emitting CO2e can
purchase “credits” either voluntarily or from a regulated scheme, to offset their own
emissions so as to claim to be “carbon neutral.” Carbon trading therefore has become
a potentially lucrative business and the aim is to build confidence in the carbon
market. Currently, the global carbon market stands at USD 30 billion of which the EU
ETS represents a very significant component at USD 25 Billion. On our part, the
industry must ensure that the carbon credit offered in the market is real in achieving
the reduction in GHG emissions in the world.
2. Ensure that the Palm Oil Industry is Green: As the world has gone green, the palm
oil industry must make itself heard, credible and authentic. It has to champion against
the accusations levelled at palm oil firstly, as a bioenergy or biofuel source generates
more GHG emissions that it seeks to reduce and secondly, diversion of palm oil to
fuel production may cause further shortage in supply. Are these accusations real or
wrong and short-sighted? An examination of the facts shows that as much as 90% of
palm oil is used for food, the rest of the solid biomass is being actively pursued
through research into the second generation biofuels to make the biomass-to-liquids
(BTL) a commercial reality. Efforts in improving the energy independency and at the
same time boosting local agricultural economies is done without threatening the food
situation since the biomass is a non-food item. Further, the palm oil industry is also
looking at producing sustainable biomass in order to minimise the risks of being
charged with greenwash.
This means that the industry in walking the talk has to ensure more implementation of
environmentally sound practices than what companies disclose in their annual reports.
The green commitments must be demonstrated and the process over the whole supply
chain towards such achievements be communicated to the customers. The irony is that
when companies stick out their necks in calling for attention to what the industry has
been doing right, very often the corporate risks they faced is unwittingly what they
expose to the customers as benefits are focused by the environmental NGOs to be
environmental issues. Thus many companies chose to remain silent on certain issues.
However, being quiet is no longer an asset as the industry is pushed to communicate
about what it is doing right and not doing, by consumers as well as other drivers such
as the employees, investors, activists and NGOs, players along the supply chain,
stakeholders and communities. In other words, the industry now has now to match
word with action.
3. Gaining Global Credibility for the Green Palm Oil Companies: Progressive
companies within the palm oil industry in adopting green policies do demonstrate a n
strong accompanying commitment to sustainability. The latter requirement has
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become the new impetus to put into practice, many positive environmental initiatives
such as SIRIM Malaysian Standards on Oil Palm Good Agricultural Practice
(MSOPGAP), Malaysian Palm Oil Association (MPOA) multi stakeholders’ initiative
in the Roundtable Sustainable Palm Oil (RSPO), and Malaysian Palm Oil Board
(MPOB) five Codes of Practice (CoPs) over the whole supply chain. International
ISO standards on GHG accounting and verification such as the ISO 14064 issued in
2006 and ISO 14065 published in 2007 are also applied to provide the users with
much needed credibility of standardised methodologies (based on consensus-building
process), broad applicability (being regime-neutral it is applied over all schemes
without bias), consistency, reproducibility, transparency (based on consistent,
reproducible and transparent processes for market confidence) and assurance (that
claims and declarations are fairly stated).
In general, these initiatives are aimed at reducing GHG emissions associated with
resource use and energy efficiency, conservation, recycling, smart energy and
reduction of fossil fuel use. Customers, at the end of the supply chain, are eagerly
looking to the industry for leadership in GHG emissions reduction so as to be assured
that they indeed receive good quality and safe oil for consumption. On its own part,
the industry has begun to collect and also to generate more data based on the complete
formal LCA studies on the actual GHG emission reduction over the whole supply
chain. Such data will be needed to silence the false accusations made on palm oil
sustainability by environmental and social NGOs who are also petitioning their
governments particularly those in European Union (EU) into dropping their subsidy
for palm oil use in biofuel production.
4. Boldness in Defining Sustainability for the Industry: This must be done as part of
the solution. By defining what sustainability meant in the context of the palm oil
industry will provide a valid basis for the whole argument on sustainability. Of
course, the common definition of sustainability as adopted by the World Commission
on Environment and Development (the Brundtland Commission) in 1987 of
“satisfying our present need without compromising the future generations’ ability to
meet their own needs” gives us the important clues of what is required. The definition
implies that the palm oil industry, at the highest level, must be able to go for the
“balanced development of the three pillars”, as stated in the Rio Declaration on
Environment and Development in 1992, of “Environmental protection, Economic
growth and Social development”.
Sustainability therefore demands that the balanced approach be given emphasis to the
three pillars of preserving the environment, satisfying human needs in a social
fairness way and stimulating development progress. In the context of the Malaysian
palm oil industry, RSPO has a definition of sustainability in its preamble while
MPOB’s view is that sustainability is “about the long-term security of our supply
chain if palm oil business is to continue with brand values and consumer trust.”
Defining sustainability indeed becomes increasingly strategic and integrated for the
industry. As a result, the palm oil business is now beginning to link its competitive
advantage and value creation to the wider societal expectations in sustainability. How
well the palm oil industry in integrating these wider societal issues will depend on the
shift in the systems approach thinking to root out the underlying causes of non-
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sustainability. The industry must proceed to have more leaders who are steeped in
these disciplines to move the industry quickly in this direction to thrive and adapt in
the coming years. Sustainability has begun to have one clear meaning in that the
relevant criteria to achieve it must have locally-specific elements and broad
agreement with stakeholders and communities in arriving at the consensual definition
to assure sustainable production in a specific area.
5. Readiness of the Palm Oil Industry to Tackle Climate Change: With the definition
of sustainability settled as far as MPOB is concerned, the industry must go about
developing principles, criteria and indicators to quantify sustainability in actual terms
so as to be able to tackle climate change. To assess sustainability in the oil palm
industry, certain risks to economic growth, preservation of the environment and social
development have to be identified, refined and given equal emphases at local settings.
All three dimensions of sustainability must be tackled simultaneously and the industry
must resist any pressure exerted by developed countries to emphasise only at one
dimension only.
For example, if economic performance of sustainable palm oil is emphasised, then
dependency on fossil oil price and the fluctuation of the oil markets upwards with
prices breaching the USD 100/barrel will curtail the economic growth of palm oil
production because high input costs like fertilisers and transport fuel especially in the
marginal, fragile and deep peat soils, where returns are not always guaranteed.
Problematic soils touch on the environmental aspect where life cycle emissions of
GHGs must take into consideration of the problem of deforestation for feedstock
production, degradation of soils, the consumption of water and loss of biodiversity
when factoring their risks impact on both the environment and economic growth.
These two dimensions in turn affect the social part, the third dimension. As palm oil is
a food item first and then an oleo-chemical next, there must be an assurance of food
availability from the oil given as a priority while the non-food biomass be seed as
offering new opportunities for the second generation biofuels production by
exploiting, for example, the biomass to liquids (BTL) technology. By providing
improved working conditions of employees and distributing improved benefits to
them, the environmental and economic components in concert will pave the way to
reduce the risks of imbalances in the social development.
As the consistent framework and a robust methodology with equal emphases on all
three dimensions with strong application of the MPOB’s CoPs, MSOPGAP, RSPO
and the ISO 14000 series of international standards becoming the basic building
blocks for standardised methodologies, the industry is now ready to embark ob a
proper contribution to assist in tackling climate change by reducing real GHG
emissions.
Developing a Sustainability Framework to Assess Palm Oil Production and Carbon
Balance:
In the hierarchical sustainability framework, five requirements are involved. They are:
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Have an Objective: The sustainability of the industry, assessed by an objective, has a
set of principles defined and verified by the fulfilment of a set of criteria that are
supported by measurements to obtain clear data set of the performance of the
indicators.
Provide Guiding Principles: Principles are actions based on social values, tradition
and scientific knowledge (FAO, 2002). Therefore a set of principles defines the
framework of sustainability of which the basis of criteria, indicators and compliance
by auditors or verifiers go about achieving the fulfilment of the objective of
sustainable palm oil. To satisfy a principle, a set of criteria is used.
Develop Criteria: Criteria are a set of conditions by which an objective is assessed
and given dimensions. Criteria define the rules to be satisfied in order to accomplish
the sustainability principle. Operationally, criteria provide the meaning to the
principle. The measurements for verifying the criteria are called indicators.
Assess with Indicators: Indicators provide a consistent and clear measure of the
attributes of the system under study. An indicator therefore is a quantitative or
qualitative variable that can be measured. Hence when a set of indicators satisfy the
rules of the criteria, then the indicators have contributed to the accomplishment of a
sustainability principle.
Audit with Verifiers: When testing the indicators’ fulfilment of the criteria a verifier
is introduced. A verifier is a set of data that provides meaning, precision and site-
specificity to an indicator. Very often when testing of indicators’ fulfilment of criteria
over time, the sustainability trend can be determined.
Urgency to Become Clean and Green: With the basic elements of the framework set, the
industry will focus on the call to increasingly narrow the gap in the compliance between the
industry’s stated intentions in the principles and their actual behaviour or performance of
indicators on the ground. The industry is doing its best to fulfil these principles, criteria and
indicators outlined in the sustainability framework but certainly not fast enough. There is now
an urgency to do it quickly in terms of speed to market yet possessing the scientific rigour to
meet international scrutiny.
The state of the data collection on the business and the environment aspects remains
fragmented. The industry has yet to obtain complete figures on the impact of reducing the
GHG emissions associated with the use of energy, water and materials on site-specific basis
in order to make a difference in moving the needle of sustainability scale to slow down
climate change.
The quantity and quality of available data while found to be wanting, the industry must do
some things quickly through multilateral agreement with players along the supply chain on
the action plan set out to measure properly the life cycle GHG emissions associated with the
products, services and events in oil palm plantations. There must be firm milestones
indicated. There must also be clear timelines, target and deliverables. What are the indicators
to show progress? Serious budget and resource allocations with periodic reviews for
assessment are suggested. Finally, ownership and participation by companies are only the
beginning of the tangible contribution of oil palm sustainability towards solving what climate
change is all about.
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Aim of Paper
From the urgency for both government and policy makers to take action to reduce their
carbon footprint of GHG emissions associated with the products, services and events, the
palm oil industry is dictated by deadline set for December 2009 at Copenhagen, Denmark
(two years down the Bali Roadmap) to commence reduction of GHG emissions targets of the
developed countries. The meeting at Bangkok in April 2008 has allowed manageable chunks
of commitment to GHG emissions reduction to be fulfilled.
Some details of these three events underlined the importance of taking action on GHG
emissions reduction to prevent climate change from bringing about abrupt and irreversible
global impacts and they are:
Firstly, the release of the Fourth Assessment Report (FAR) which summarized the
last six years of solid research since the release of Third Assessment Report by the
Intergovernmental Panel on Climate Change (IPCC). Incidentally IPCC is also the co-
winner of the 2007 Nobel Peace Prize. With FAR, everyone seems to have finally
accepted the critical importance of reducing GHG emissions to slow down global
warming and climate change. Further, FAR represents the most comprehensive and
authoritative assessment of climate change to-date by providing an integrated
scientific, technical and socio-economic perspective on relevant issues concerning
climate change.
The global warming of the climate change is equivocal on the increases in global
average air and ocean temperatures, wide-spread melting of snow and ice and rising
global average sea level. There will be serious concerns on the anticipated extinction
of numerous species around the world. The IPCC report besides pointing to issues
also proceeded to offer options for mitigating (e.g. zero-burn policy, EFB composting
and biogas capture) and adapting (e.g. breeding for drought resistance and water use
efficiency) to climate change. There will be a new ethic by which every human being
realizes the importance of the challenge faced by the world and starts to take action
through changes in individual lifestyle and attitude.
Secondly, the Stern Report in 2007 which noted that the cost of extreme weather
disruption alone could reach 1% of the world GDP by middle of the 21st century, and
such economic disruption could approach the scale of those associated with the great
wars and the great economic depression of the first half of the 20th
century. Many
companies therefore have to ensure effectiveness of their policies. They will have to
see climate change to have both a threat and an opportunity for new products, services
and trading, particularly in carbon emissions.
Companies in seeking to remain competitive will therefore need to view the world
through a broader and more realistic lens. Clearly they need to do better in their GHG
emissions reduction. Currently their annual reports invariably had too little
quantitative information, provided insufficient explanation of their business impacts
and trends, and had inadequate management goals for reducing GHG emissions. Most
of them are not revealing their public policy positions either of lobbying against
climate change regulations or making pronouncements about their climate change
leadership.
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Hence the need to quantify and report GHG emissions, for all purposes and intent,
represents inefficiencies yet opportunities to improve operations, reduce risks, save
money, become leaders in the eyes of the employees, stakeholders, customers and
others; and finally to embark on the commencement of a continuous improvement
cycle to discover other ways to become better corporate citizens and doing better
business. Only then will there be equity.
Thirdly, the Bali Roadmap in December 2007 is asking for enhanced national and
international actions on mitigation of climate change to obtain measurable, reportable
and verifiable commitments and actions which require quantified emission limitation
and reduction targets by all developed countries. This is to ensure that there is
comparability of efforts among these developed countries by taking into account
differences in their national circumstances as per Article 4.2a of the UNFCCC.
As for the developing countries, Parties in the context of sustainable development, be
supported and enabled by technology, financing and capacity building so as to be able
to take appropriate mitigation actions nationally in a measurable, reportable and
verifiable manner.
Overall the Bali process has achieved its own roadmap of action. Business is ready to
move into low-emissions era and the Bali Roadmap provides the framework for
governments to launch formal negotiations by setting 2009 as the deadline for
negotiation. Developed countries are to continue to take the lead on curbing GHG
emissions and also on the emphasis in providing incentives to act globally together
with developing countries, businesses and individuals on climate change.
Hence from the above three events, many Parties in COP/MOP of UNFCCC have recognized
that the debate is over and it is time for action. The responses are seen on three fronts:
Firstly, governments and countries across the globe have therefore developed a
complex array of regulations, taxes and incentives to help reduce GHG emissions as
spelt out in the KP. Many countries have also set up monitoring systems for
measuring climate change through technical basic equipment and geometric and
meteorology standards.
Secondly, businesses are increasing the awareness of their customers’ desires to buy
greener products, services and events. This is done by promoting good practice in
environmental management, quantifying GHG emissions and communicating on
environmental impacts
Thirdly, individuals, operational units, offices and homes are improving their energy
efficiencies and offsetting their GHG emissions. This is done by developing standards
for energy-efficient technologies and renewable sources, for solid-to-liquid (BTL)
biofuels to defuse the food versus fuel controversy, and for improving energy
management.
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All these are done with the aim of reducing carbon footprints and becoming carbon neutral.
Going forward, it is apparent that, given the stakes of the climate change challenge, there are
demanding needs for standardization for better global reach, effectiveness and actions. This
paper therefore tells about the effort of the Malaysian palm oil industry in reducing its carbon
footprint and becoming carbon neutral in the process.
Understanding Carbon Footprint, Carbon Offset and Carbon Neutral
The emerging consensus is that transformative changes need to take place in almost every
sector of the industry be it upstream-, mid- and down-stream, in order to successfully address
climate change. The objective is that the early adopters of green technologies must move
forward to acquire high quality GHG emissions credit to offset their unavoidable emissions
so as to become carbon neutral. The equation requires the carbon footprint to be offset in
order to achieve carbon neutral position. Thus the carbon footprint equation is as follows:
(Carbon footprint + Carbon offset = Carbon neutral)
Where,
Carbon footprint: (refers to the calculation of the amount of GHG emissions
associated with the company, activity, operation and event or the life cycle of a
product or service) and to this has to be added:-
Carbon offsets: (which are carbon credits from emissions reductions or removal
enhancements associated with projects such as energy efficiency, reforestation, etc
that can be purchased by individuals or companies to compensate for their impacts of
their company’s activities, operations, events, products and services) where these
credits are sold by a variety of providers, including project developers, aggregators,
wholesalers and retailers in order to assist companies to claim for:-
Carbon neutral: (which is a type of an environmental claim applied to a company,
activity, operation, events, product and service that obtains carbon offsets equal to its
carbon footprint) which then can be put into the eco-labels of their products.
A number of international standards related to climate change ranging from measurement of
specific greenhouse gas emissions to generic accounting standards leading to who should pay
the emission price for the footprint of goods produced and manufactured in Asia and sold in
the developed countries, are available. As palm oil is sold as a food, it is important to
highlight the food miles in crossing national boundaries to reach the consumers involves
burning of fossil fuels and has to be accounted for.
Avoid Conflicting Approaches
A Proper Detailed LCA Study is Ongoing in the Industry: In MPOB, being aware of the
requirements globally has commenced a detailed LCA study that conforms to international
standards. The work in progress involves distinct boundary settings as outlined by ISO 14040
standards are on:
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Upstream from planting from previous vegetation including land use change effects to
production and delivery of FFB to mill
Processing of FFB to palm oil including capture of methane
Kernel crushing with emphasis on reduction of energy requirement by integrating the
refinery close to the mill
Sending the palm oil for refining with better integration of refinery close to mill to
reduce energy
Manufacturing of refined palm oil into products like cooking oil, margarine and
shortening
Into soap
Into α methyl ester for cosmetic products
Into biodiesel.
The work is necessary as MPOB wants to be identified with the consumers who are the
drivers of change and MPOB as the custodian of the palm oil industry is responsive to them.
Therefore by combining the emissions over the supply chain for which include the various
production, processes, refinery, manufacturing and transport processes, clear boundaries
identified under the LCA approach will mark out new research areas where carbon footprint
of GHG emissions of the industry is ready for quantification of carbon used a unit of product.
Both direct and indirect sources of emissions and sequestration or removal will be examined.
Further, the LCA technique also requires responsible influence through their purchasing
decisions to go for low carbon economy. In this way the industry hopes to provide in the near
future newer information and opportunity for consumers to make low carbon choices in their
purchase.
In the Interim: While pressure mounts globally for businesses, companies, governments and
civil society to manage their carbon impact, an interim effort has to be communicated to tell
the customers that the industry indeed is giving attention to its carbon footprint. A review is
made on the published work on the carbon budgets involving oil palm that have assessed
exchanges of CO2 and other greenhouse gases. It was found that different approaches had
been used as reported by Henson, 2004; 2005, Reijnders and Huijbregts, 2006; Melling et al.,
2007; Germer and Sauerborn, 2007; Reinhardt et al., 2007; Henson, 2008 and Henson and
Chang, 2008, Van Zutphen, 2008; Chen, 2008 and Yapp, 2008. Most of the researchers used
the non- or partial- LCA approaches based on historical studies some done over the last 20-25
years of planting and some even excluded the land use change effects over the various
previous crops prior to the planting oil palm. The aim of the interim communication is to look
at gaps in the methodologies and to improve on them.
Research into Oil Palm Carbon Footprint at Local, Landscape and National Levels
This has to be done at three levels.
i) At Local Level: Using the figures projected by Henson and Chang (2008) as an example,
the aim is to look for shortfall from the full LCA requirement and to caution researchers from
attempting to rush to rub away carbon footprint to meet market demand without applying the
acceptable international standard or methodology. From this simple exercise it is hoped that
the methods suggested will be used to reduce methodological differences by governments,
companies, consultants and NGOs in measuring and communicating carbon footprints,
offsets and balance to be neutral.
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In Henson and Chang (2008), the approach was to assemble annual carbon gains and losses
including the initial loss of biomass caused by land use change of clearing the land of
previous vegetation to plant oil palm. The biomass residue left to decompose on site is
similarly offset against the remaining biomass loss amortised annually based on
decomposition rates as described by Henson (2004, 2008).
Compiled over a period of 25 years, the carbon sequestrated by the oil palm crop was
assessed annually from the yearly carbon increment in dry biomass of the standing crop. The
changes in total C storage based on on-site and off-site include both oil palm and non-oil
palm components. Biogas from palm oil mill effluent needs to be accounted for. It is not
uncommon to see how the differences of positive to negative estimates of the carbon balance
calculations by tracing the footprints based on different background of the history of
cropping.
Table 1. Comparison of carbon budgets in tCe/ha/yr over major soil groupings
Carbon Peat1 Average
2 Coastal
3 Inland
4 Notes
Oil palm 2.021 1.628 2.015 1.902 Includes roots
Ground cover 0.095 0.059 0.048 0.052 Includes cover litter
OP litter 0.191 0.171 0.234 0.183 Frond, base,♂ inflorescence
Total On-site gain 2.307 1.858 2.297 2.137
Off-site gain
Mill & by-products 0.226 0.073 0.118 0.115 Po, Ko, Kc, Efb, F, S, Pome
Sub-total On &Off 2.533 1.931 2.415 2.252
Losses
Peat C oxidation 8.032 Mean rate over 25 years
Plantation inputs 0.392 0.336 0.336 0.336 Based on fossil fuel use
N2O emission 0.176 0.161 0.161 0.161 From N fertilizer
0.148 From peat
Initial biomass 3.474 2.466 1.991 0.199 2o forest, Discounted 25 yrs
Sub-total On-site 12.222 2.963 2.488 0.696
Off-site
CH4 from POME 0.759 0.605 0.812 0.586
Sub-total 12.981 3.568 3.300 1.282
Balance -10.448 -1.637 -0.885 0.970 (-) denotes Net C emission
(Source: Adapted from MPOB and Henson and Chang, 2008; tCe/ha/yr= t carbon
equivalent/ha/yr; Peat1= Based on 16 year extrapolated over 25 years with initial vegetation
as felled secondary forest; Average2=Based on average yield over 25 years with the previous
vegetation as rubber; Coastal3=Based on coastal soils over 25 years with higher yields at
25t/ha/yr and the previous vegetation as oil palm; Inland4=Based on low to medium
productive inland site with the previous vegetation as grassland; Po=Palm oil; Ko= Kernel
oil; Kc=Kernel cake; Efb=Empty fruit bunches; F=Fibre; S=Shell; Pome=Palm oil mill
effluent; 2o= Secondary forest.)
Looking at the calculations, the estimates over 25 years cropping from 1980-2005, as
summarized in Table 1, can differ between being an emitter of -10.488tCe/ha/yr for peat with
previous secondary forest and a net sequester of 0.970tCe/ha/yr for oil palm grown on ex-
grassland. How reliable can the consumers’ trust be on the information on the carbon balance
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data will depend on how complete the life cycle inventory (LCI) coming from the companies
in the palm oil industry? Do they have the historical records to discount the relatively larger
initial biomass such as in second, third or even fourth logged-over forest or secondary- forest
as compared from rubber, cocoa, coconut, grassland and from oil palm itself? The oil palm
plantations currently are at different stages ranging from being first planting on degraded
logged-over or secondary- forests to replants, some reaching up to the 4th
replant,
continuously replanted on the same land, with each cycle being 25 years.
Have the calculation taken into account the on- and off-site sequestration and emission as
shown in Table 2? Have the innovations to take into account the continuous improvements in
best practices for incorporation through the formulation of new policies by the companies and
government so as to reduce the carbon footprint?
Table 2. Potential Carbon Balance based on Improvement in Good Agricultural Practice
Carbon Peat1 Average
2 Coastal
3 Inland
4 Notes
On-site gain 2.307 1.858 2.297 2.137
Off-site gain
Mill & by-products 0.226 0.073 0.118 0.115 Po, Ko, Kc, Efb, F, S, Pome
CH4 from POME 0.759 0.605 0.812 0.586 Assumed captured and used
Sub-total On & Off 3.292 2.536 3.227 2.838
Losses
Total On-site 12.222 2.963 2.488 0.696
Balance -8.930 -0.427 0.739 2.140 (-) denotes Net C emission
(Source: See footnotes of Table 1)
It can be seen that when on- and off- site sequestration and emissions are considered, the
carbon balance calculations are improved, underscoring the importance of getting the life
cycle inventory (LCI) to be as complete as possible.
ii) At Landscape Level: As pointed out by Basri and Chan (2007) over the last 25 years, there
have been significant changes made to the good agricultural practices and they are likely to
affect the carbon build-up when they are highlighted and incorporated into the new policies.
They include:
1. Since 1989 there has been zero burn policy in place (Teoh, 2003).
2. There is no cross ploughing of the soil whereby retaining much of the soil organic
carbon (Goh, 2004) in the underground roots accumulated (Khalid, et. al., 1996) at
14.9, 29.7 and 41.0tC/ha at 5, 10 and 20 years respectively and this has been reviewed
recently by Yew (2008) who found that the soil contain higher amount of carbon.
3. There is an increase emphasis to grow more legume ground cover mixtures to take
advantage of the nitrogen fixation through the root nodules of the legumes and to
reduce the N2O emissions from mineral fertiliser application.
4. Already many companies are improving their boiler efficiency in the mill with the
resulting less fibre, shell and even empty fruit bunches being combusted and more
available for mulching in the field and as an inorganic fertiliser substitute.
5. And many companies are intensifying their efforts to trap the methane (biogas)
thereby reducing a major source of GHG emissions
13
From Table 2, the whole impact of various plantings has to take into account of the oil palm
planting over the whole oil palm landscape in Malaysia as shown in Table 3.
Table 3. Application of the Potential Carbon Balance in tCe/ha/yr over the Whole Oil Palm
Landscape of 2,448,470ha average 1981-2005
1981-2005 Peninsular Sabah Sarawak Malaysia
Sequestration 2.505 3.396 3.905 2.919
Emission 2.486 6.344 12.076 4.010
Balance 0.020 -2.408 -8.176 -1.090
(Source: Basri and Chan, 2007)
In 2007, there were 4.304 million ha of oil palm in Malaysia with a proportion of 2.36 million
ha (60%), 1.28 million ha (30%) and 0.66 million ha (10%) of oil palms in Peninsular, Sabah
and Sarawak respectively. It can be seen that from Table 3 that when the carbon balance is
projected to the regional oil palm area, the carbon balance in Peninsular being of the largest
oil palm area has positive carbon balance at 0.020 while that of Sabah and Sarawak with
smaller areas are negative. This is due to the rapid planting of oil palm from previous crops or
different land use. More improvements can be made if in the future the planting and
replanting involve less logged-over and secondary-forest and peat and fields are replanted
from oil palm areas in terms of the land-use change and perhaps deep peat reverted to
regeneration to forest.
iii) At National Level: Further, at the Bali meeting, the Minister of Natural Resource and
Environment (NRE) confirmed that Malaysia has been able to maintain about 60% of the
land is under forest cover which is 10% higher than its 50% pledge made at Rio Summit in
1992. It was reported by that Minister that nearly all of the production forests in Peninsular
have been certified as being managed under the criteria and indicators that are based on
International Tropical Timber Organisation (ITTO) guidelines. On a national level on the
subjects of carbon balance, the Minister informed that Malaysia is a net sink where we absorb
more CO2 than producing it (Azmi Khalid, 2007)
The results in Table 3 also highlighted the need to integrate the oil palm figures into the
national inventory as required under the second national communication to the UNFCCC
international agreed guidance for land use, land-use change and forestry as spelt out in
Article 3, paragraphs 3 and 4 of the Kyoto Protocol. At the Bali COP/MOP meetings in
December 2007 have agreed that the final module format will be released in April 2009. The
sample of the calculation of accounting for GHG emissions monitoring activities is shown in
Table 4.
As seen from Tables 1-4, the call is for accurate and consistent GHG emissions data
collection to understand the land-use change effect. It is important to know what is meant by
claims of being carbon neutral and when can they be made? If green products, services and
events are to go main stream, then creditable data and information must be produced to
support environmental claims are to support market growth and protect customers. Therefore
there is an urgent need to use internationally acceptable practices to ensure a consistent and
creditable approach to quantify carbon footprint, offset and neutral claims. Fortunately, ISO
has developed a number of standards to support companies that want to measure and
14
communicate the carbon footprint of their operations, products, services and events. This will
allow for fungibility of carbon credits.
Table 4. Accounting for Activities under Articles 3.3 and 3.4 of Kyoto Protocol
GHG Source and Sink Activities Net Emissions/Removals
BY 08 09 10 11 12 Total Parameter Quantity
Cg CO2e
A. Article 3.3 activities
A.1 Afforestation & Reforestation x A1.1 Unit land not harvested X x x x x x
A.1.2 Unit land harvested x
Unit A X x x x x x
Unit B X x x x x x
Unit C X x x x x x
Unit D X x x x x x
Unit E X x x x x x
A.2 Deforestation X x x x x x
B. Article 3.4 activities
B.1. Forest Management X x x x x x
3.3. Offset x x
FM cap x x
B.2.Cropland Management x X x x x x x x x
B.3.Grazing Land Management x X x x x x x x x
B.4. Revegetation x X x x x x x x x
(Source: Adapted from FCCC/SBSTA/@))/L.21; BY= Base year; x=Data required to be filled
in; 08-12= years of commitment; Cg CO2e= Giga gram CO2 equivalent; FM cap= Value
inscribed for Party in Annex for forest management)
Climate Change, Carbon Markets and Standards
Why Use ISO 14064 and ISO 14065? Shortly after the publication of ISO 14064 standard for
GHG accounting and verification in March 2006 and the ISO 14065 in April 2007, the uptake
of these two standards by the leading GHG programmes and organisations dealing with
regulated and voluntary market worldwide has been widespread. The first standard ISO
14064 in three parts provided rigorous and credible accounting to maintain integrity in the
market while the second standard ISO 14065 allows the emissions reduction or inventories to
be verified or validated under ISO 14064 Part 3 by a validation or verification body
accredited to ISO 14065.
ISO 14064-1:2006, Greenhouse gases- Part 1: Specification with guidance at the
organisation level for quantification and reporting of greenhouse gas emissions and removal,
specifies verifiable requirements for organisations to design, develop, maintain and report on
emissions throughout the inventories, and deals with quantifying GHG emissions through
monitoring and reporting programmes.
ISO 14064-2:2006, Greenhouse gases- Part 2: Specification with guidance at the project
level for quantification, monitoring and reporting of greenhouse gas emission reductions or
removal enhancements, specifies verifiable requirements for GHG project programmes to
15
plan, monitor, quantify and report projects, including resultant GHG emission reductions or
removal enhancement units. This is useful for proponents of voluntary projects, regulatory
credit-based schemes and government administrators designing programmes and schemes.
ISO 14064-3:2006: Greenhouse gases- Part 3: Specification with guidance for the validation
and verification of greenhouse gas assertions, specifies verifiable requirements for
validation/verification bodies and validators/verifiers in providing assurance of GHG claims
from organisations using Parts 1 and 2 of the standard. The part 3 standard aims to be
applicable to any GHG scheme and will be of interest to validation/verification bodies,
validators/verifiers and GHG scheme administrators.
The ISO 14065:2007, Greenhouse gases- Requirements for greenhouse gas validation and
verification bodies for use in accreditation or other forms of recognition establishes the
requirements that allow accreditation bodies and others to assess the processes used, and the
creditability of GHG verifiers and validators.
A summary of the demand and uptake of GHG standards is shown in Table 5. It can be seen
that there is widespread market demand and uptake of the two standards.
Table 5. Widespread Market Demand and Uptake of ISO 14064 and ISO 14065
No. Application of ISO 14064 and ISO 14065 Date and Activity
1 ISO 14064-1, 1SO 14064-2 & ISO 14064-3 March 2007
2 ISO 14065 April 2007
3 World Resource Institute (WRI) and World Business
Council for Sustainable Development (WBCSD)
December 2007 signed
MOU with ISO
4 International Emission Trading Association (IETA) and
WBCSD launched Voluntary Carbon Standard (VCS)
November 2007
5 WRI/WBCSD GHG Protocol linked to UNFCCC Kyoto
Protocol CDM
November 2007
6 Greenhouse Gas Management Institute launched
(GHGMI)
October 2007
7 WRI/WBCSD Partnership with GHG Management
Institute (GHGMI)
December 2007
8 Canada “Technology Early Action Measures” Training courses 2005/06
9 Australia “Greenhouse Challenge Plus” WRI/WBCSD Protocol
10 USA DOE GHG Registry ISO14064-3
11 International Petroleum Industry Environmental
Conservation Association (IPIECA)
Adopts ISO 14064 in
accounting guidelines
12 New York Mercantile Exchange (NYMEX) Included VCS
13 GE Energy Financial Services and AES launched
Greenhouse Gas Services (GGS)
2007, Sell GHG credits
14 Det Norske Veritas (DNV) ISO 14064
15 Lloyd’s Register Quality Assurance (LRQA) ISO 14064
16 British Standards Institution (BSI) ISO 14064
17 Societe Generale de Surveillance (SES) ISO 14064
18 Canada Standards Association (CSA) ISO 14064
(Source: Baumann, 2008)
16
Being regime neutral, these standards are readily applied in a number of situations within the
major national and industry initiatives as indicated in Table 6.
Table 6. Industries using the ISO 14064 and ISO 14065 GHG standards
No. Industries Project Protocol Using ISO 14064 and ISO 14065
1 Bioenergy Biofuel, Biogas, Biomass, Energy efficiency
2 Energy and electricity Wind power, Small hydro power, Electricity grid baseline
3 Oil and gas Enhanced oil recovery, Oil and gas sector
4 Mining Coal mine methane, Abandoned mine methane
5 Waste recovery Waste heat recovery, Waste water treatment, Landfill gas
6 Forestry Afforestry
7 Meat Beef feeding, Beef life cycle, Diary operations, Pork operation
8 Soil Composting, Tillage, Soil carbon sequestration
9 Industrial N2O destruction, Municipal operations on energy systems
10 Transportation Fuel switching
(Source: Baumann, 2008)
The growing widespread use of ISO 14064 and ISO 14065 in both regulated and voluntary
trading schemes is a testament to the versatility in linking GHG markets of the world. The
broad appeal has created consistent requirements irrespective of the country in which the
project or industry is located. It further implies that regular users and multi stakeholders have
effectively promoted the use of these ISO standards as a means to introduce innovations into
the industry. This is because standardisation provides a floor but cautions against using it as a
ceiling since the ultimate objective ensure that agreed measurable and verifiable targets for
significant reduction of GHG and improvement in climate change are met. This will facilitate
greater performance of the industry and better free trade in the global economy.
Towards the use of ISO Standards for Carbon Footprint, Offset and Neutral Claim
Due to the great demand for measuring carbon footprint, there are a number of existing
protocols and emerging efforts underway around the world to develop carbon footprint
methodologies but these are often inconsistent. Thus ISO standards could play an important
role in bringing together a common set of rules outlined in ISO 14064 and ISO 14065 as the
basic building blocks in these emerging protocols and this has broad agreement multilaterally
with ISO. The benefits of using ISO standards base for the quantification of carbon footprint,
offset and carbon neutral claims are seen in several areas.
In countries that did not signed the Kyoto Protocol: Where the regulatory market has
yet to be firmly established, voluntary market is thriving as in USA which has not
signed the Kyoto Protocol. Here in USA about 68% of the customers understandably
use the voluntary carbon standard (VCS). The popularity is due the founders of the
VCS having included the ISO 14064 and ISO 14065 into VCS to ensure rigorous and
creditable accounting of carbon to maintain integrity in the market. In the VCS, the
emission reductions and inventories are verified and validated in accordance with ISO
14064-Part 3 to use a validation or verification body accredited to ISO 14065.
17
Use in CDM Projects: Interestingly, the use of ISO 14064 is growing in Asia and
Africa especially in the former where CDM projects are more than rest of the world.
Through the WRI/WBCSD cooperation, ISO 14064 and ISO 14065 together with the
WRI/WBCSD GHG Protocol are being used in the quantification of GHG emission
reductions in CDM projects.
In UNEP Programme: The United Nation Environment Programme (UNEP) at the
end of February 2008 had launched a new Carbon Neutral Network to provide on line
support for sharing experience and good practices. It involves a network of countries,
cities, companies and others who are bold enough to commit to climate neutrality.
UNEP has always encouraged voluntary action by business to complement regulation
and deal with environmental issues in a more proactive manner. This includes use of
voluntary standards and Codes of Practice. Much progress has been achieved through
regular and multi stakeholder discussion and revision to ensure effective promotion of
new technologies and innovations in matters such as eco-labelling and life cycle
management of carbon footprint.
Use of other ISO Standards: Besides ISO 14064 and ISO 14065, tracking carbon
emissions would need to use ISO 14040 LCA standard. It provides the confidence of
meeting the robust and practice-proven requirements for performing transparent and
acceptable carbon footprint calculations over the life cycle of a products, service and
events. The standard provides guidance on how to measure the potential
environmental impacts of resource use, wastes and emissions from both the product
system as well as climate change impacts.
Communication of carbon neutral claims: The ISO 14020 series of standards on
environmental labelling provides specific environmental communication tool and
guidance related to product labels and declarations. In particular, ISO 14025 provides
guidance on producing environmental product declaration which can be used to
document the environmental performance of a product across its life cycle. This
standard is intended to support informed choices of environmentally preferable
products for the customers.
Integrating environmental aspects into product design and development process: The ISO 14062 standard provides guidance on how to manage and reduce
environmental burden including carbon footprint of both organisation and products.
Further ISO Guide 64 also helps writers to take environmental impacts into
consideration in the development of products standards.
The Way Forward
While it is clear that ISO standards and guidance documents can help companies measure and
reduce their carbon footprint, there are other areas where use of international ISO standards
can help to harmonise the best practices to measure the carbon footprint of a product, services
and events. This is to ensure apples-to- apples comparisons between products. Consumers
18
need this confidence that companies indeed are using fair and accurate approaches when they
calculate their carbon footprint.
Through the adoption if ISO standards the quantification is standardised to overcome some
approaches that
measure only some greenhouse gases e.g. CO2 only
measure a portion of the production system e.g. measuring emissions during
manufacturing
Measure GHG emissions during transport
Do not include emissions associated with material production
Use of different emission factors
Ignore variation of how energy and transportation fuels are treated
Use economic input/output model
Thus ISO standards can help to harmonise Codes of best practice improving the measurement
of the carbon footprint with better informed choices on:
- where to draw the boundary of the analysis,
- selection of quantification methodologies,
- Collection of credible primary and secondary data
- Appropriate emission factors
- What greenhouse gases to include
As ISO 14040 LCA is being recognised worldwide, especially by European Union (EU), the
standards provide guidance on how to measure the potential environmental impacts,
encourage users to look at climate change impacts and their normalisation in terms of the
other categories of impact e.g. acidification. The ISO standards also help in communication
of carbon neutral claims by documenting the environmental performance of a product across
its life cycle so that customers can have better informed choices of environmentally preferred
products. More importantly, the ISO environmental management systems standards on
product design and development process provide valuable guidance on how to reduce
environmental burden including carbon footprint of both organisation and products.
Currently ISO TC 207 SC7 is developing two new standards viz., ISO 14066 on how to verify
the verifiers and ISO 14067 on carbon footprint of product, services and events. These newer
standards are developed to support the measurement on the reduction of carbon footprint of
organisations, products and services worldwide.
Conclusion
Consumers, businesses, other stakeholders and well as climate change watchers can examine
the contribution of the oil palm industry to carbon footprint. The industry may well be better
served by the emerging carbon footprint standards by ISO. All in all, a comprehensive suite
of International ISO Standards covering GHG emissions tracking and accounting will
facilitate other organisations operating in a wide range of sectors to have an important role to
play in reducing their carbon footprint and fight against climate change.
Acknowledgement
19
The author gratefully acknowledged the approval by the Director General MPOB, Dato’ Dr
Mohd Basri Wahid for the financial help to attend and chair the standards development on
greenhouse gases and related matters. The author also thanked the Director Biology Division,
MPOB for the support and encouragement in writing this paper.
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