Carbon Credits for Palm Oil growers

Environment organizations like WALHI and Greenpeace have accused that Palm Oil growers are responsible for destroying forests therefore destroying the habitat of Orangutan.  

Is spite of these accusations, the Ministry of Forestry is planning to include Palm Oil growers among those eligible to get Carbon Credit i.e. a United Nations backed scheme aimed at preserving forest.

Please find below a related report by Reuters.

Indonesia may let palm oil growers collect CO2 credits         

Mon Aug 9, 2010 8:15am  

By Sunanda Creagh

JAKARTA Aug 9 (Reuters) - Indonesia may propose palm oil plantations be eligible to earn carbon credits under a U.N.-backed scheme aimed at preserving forests, a forestry ministry official said on Monday.

Such a move could potentially create a new line of revenue for the palm oil industry and listed firms like Wilmar (WLIL.SI) and PT Astra Agro Lestari (AALI.JK), but is likely to anger green groups who accuse planters of deforestation.

Indonesia was the first country to develop a national framework for a U.N-backed forest preservation scheme called reducing emissions from deforestation and degradation (REDD).

The scheme would allow forested developing countries like Indonesia to be paid potentially billions of dollars from rich nations not to chop down their trees. [ID:nJAK495718]

Countries began developing domestic legal frameworks for REDD in anticipation of a global agreement on the scheme at climate talks held in Copenhagen last year, which will be continued in Mexico in December.

"If there is agreement on REDD, we could put palm oil plantations to be eligible for that," said Wandojo Siswanto, a special adviser to the forestry minister and one of Indonesia's lead negotiators at global climate talks.

Siswanto said the forestry ministry was working with the national planning agency, Bappenas, on the feasibility of including palm oil in Indonesia's national strategy on REDD.

"I think it would be good if we just say that palm oil plantations could also mitigate climate change through carbon sequestration through the nature of the trees," he said, adding that both existing plantations and future plantations developed on degraded land could be eligible.

Monoculture forests trap climate warming greenhouse gases but not nearly as much as natural heterogeneous forests.

Moray McLeish, of the Washington-based environment think tank World Resources Institute, said clear definitions of what constituted a forest were needed.
"If a plantation is regarded as a forest, then you can cut down a virgin forest and replace it with a plantation and on paper you have no change," he said.
"On the ground you have massive carbon emissions, massive loss of biodiversity, loss of ecosystem system services and loss of livelihoods for local people.

OBSTACLES

The UN has yet to formulate its definition of forest for the purposes of REDD but has already developed a set of safeguards to prevent planters from clearing natural forest and then being rewarded with carbon credits.

Tim Boyle, the Bangkok-based regional coordinator for the U.N. REDD programme, warned that the global climate talks on a successor to the Kyoto Protocol may end up adopting a definition of forest that specifically excluded palm oil from REDD.

"It would be strange if it was assumed that palm oil was going to be counted as forest. That would seem risky to me," he said.

(Editing by Neil Chatterjee and Jonathan Thatcher)

SMART vs. Greenpeace

Environment organization Greenpeace has continuously alleged that Indonesia's largest producer of Palm Oil i.e Sinar Mas Agri (SMART) has massively cleared Peatland and Primary Forests as habitat of Orangutan in Indonesia.

Due to this fact, SMART has lost major customers of its products including Unilever, Nestle and Kraft.

So in order to counter the allegations, SMART has commissioned two independent inspection companies i.e. Control Union Certifications and BSI, to carry put an audit on this matter.

And last Tuesday, SMART president Daud Dharsono told reporters that the result of audit shows that the above allegations were largely unfounded and that SMART was not responsible for deforestation of primary forests and the destruction of Orangutan habitats.

However, Greenpeace denied this saying that said audit has actually "confirmed Greenpeace's findings" that the company cleared Peatland and Primary Forests.

Source : AFP/Google

Unilever still buys Indonesian Palm Oil

Last December, Unilever the world's largest consumer of Palm Oil stopped buying Palm Oil from PT Sinar Mas, the largest producer/supplier of Palm Oil in Indonesia.

However, according to Reuter (below) Unilever is still buying 65% of its Palm Oil from other suppliers in Indonesia.

In my humble opinion, as long as the Palm Oil producer/supplier do their business according to the valid laws and regulations therefore do not disturb/damage the forest and nature in Indonesia, there would not be any problem at all. 

Unilever unit says Indonesia remains key palm oil supplier

JAKARTA, May 5 (Reuters) - The Indonesian unit of Unilever (ULVR.L) (UNc.AS), the world's top palm oil buyer, on Wednesday said it gets 65 percent of its palm oil from Indonesia despite halting purchases from a unit of market leader Sinar Mas Group.

Unilever, which uses palm oil in such products as Dove soap and Ben & Jerry ice cream, cancelled its annual 20 million pound ($30.27 million) contract with one of its Indonesian suppliers, PT SMART (SMAR.JK) in December. SMART is part of Sinar Mas Group, Indonesia's biggest palm oil producer.

The move prompted speculation that Unilever might cut palm oil purchases from other Indonesian suppliers, but a spokeswoman for the company said it was still buying from Indonesia.
"About 65 percent of palm oil bought by Unilever worldwide comes from Indonesia. We only stopped buying from SMART but we are still buying from other Indonesian suppliers," said Maria Dewantini Dwianto, a spokeswoman for PT Unilever Indonesia (UNVR.JK).

SMART had shipped some palm oil cargoes up to April to fulfil an agreement made ahead of Unilever's decision to stop purchasing from SMART, Dwianto added.
Other palm oil suppliers in Indonesia include Musim Mas and an Indonesia unit of Singapore-listed Wilmar (WLIL.SI), she added.

Unilever consumes about 1.9 million tonnes of palm oil each year -- of which about four-fifths comes from Indonesia and Malaysia -- and has pledged to buy only from certified sustainable plantations from 2015.
Greenpeace has alleged that Sinar Mas, Indonesia's biggest palm oil producer and the second-biggest in the world, has been responsible for widespread deforestation and peatland clearance, practices which release vast amounts of carbon dioxide.

PT SMART and PT Unilever Indonesia agreed to appoint two independent auditors -- Netherlands-based Control Union Certification (CUC) and British Standard institute -- last month to investigate the environmental allegations.

SMART's president director, Daud Dharsono, has said that the independent auditors would complete their study by the end of June.

The allegations by Greenpeace prompted Nestle (NESN.VX) to stop buying palm oil from Sinar Mas, while agribusiness giant Cargill Inc [CARG.UL] has also threatened to remove Sinar Mas as a palm oil supplier. ($1=.6606 Pound) (Reporting by Telly Nathalia; Editing by Yoko Nishikawa and Sara Webb)