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Europe imposes stricter standards for RI products

With increasing global demand for socially and environmentally responsible palm oil, Europe has raised the bar again for the industry in Indonesia by introducing a new sustainable standard, activists for the Roundtable for Sustainable Palm Oil (RSPO) standard revealed

Tama Salim (The Jakarta Post)
Jakarta
Mon, December 22, 2014

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Europe imposes stricter standards for RI products

W

ith increasing global demand for socially and environmentally responsible palm oil, Europe has raised the bar again for the industry in Indonesia by introducing a new sustainable standard, activists for the Roundtable for Sustainable Palm Oil (RSPO) standard revealed.

According to Edi Suhardi, sustainability director at oil-palm heavyweight Agro Harapan Lestari Group, Europe has introduced the RSPO-RED standard this year, which tightens access to its market by combining RSPO certification with the EU'€™s Renewable Energy Directive (RED) standard for sustainable palm-oil use in biofuel production.

'€œEurope has set RSPO as a standard, but is now asking [for more]. That'€™s why there'€™s the new RSPO-RED mechanism,'€ Edi said on the sidelines of a media briefing in Central Jakarta, on Thursday.

The certification is considered expensive at US$60 per ton when compared to the RSPO'€™s rate of $30 per ton, but it also fetches a higher premium in the market, he explained, without delving into details.

Edi, who also serves as deputy chairman of the RSPO board of governors, said the market had become segregated due to different demands for sustainable standards in different markets.

He explained that the oil-palm market was split into three: a premium market with tighter demands than the RSPO; the standard-bearing RSPO market; and traditional markets like China and India that were more relaxed in terms of the environmental impact of products.

To address this further complication, Edi suggested that the government be willing to recognize multiple standards in the industry.

'€œThe government should support and recognize multi-tiered standards given the characteristics of the market,'€ he said, citing how the European market did not readily accept the Indonesian Sustainable Palm Oil (ISPO) certification.

'€œIt should provide new incentives for companies to produce sustainable CPO, especially with prices so low.'€

Meanwhile, former agriculture minister Bungaran Saragih said on Thursday that the government should support independent small growers in achieving sustainable standards, so that they too would be able to access a wider market.

Bungaran, who served in former president Megawati Soekarnoputri'€™s Cabinet between 2000-2004, said the many standards that apply only signaled that the industry was still in the early stages of moving from the paradigm of development to one that adds sustainability to its process.

Currently, there are 11.6 million metric tons of RSPO-certified crude palm oil (CPO), or around 18 percent, in the total global output of around 59 million tons. Indonesia currently supplies 50 percent of this.

Indonesia is also the world'€™s largest producer of CPO, supplying around 31 million metric tons per year, or 50 percent of global palm-oil output, while Malaysia supplies around 40 percent and Africa and Latin America the remaining 10 percent.

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