A new assessment of palm oil exports from Indonesia (2018-2020) shows a nation-wide decline in the deforestation linked to the sector’s exports.
The data, released today by Trase, the data-driven transparency initiative, found exporters with zero-deforestation commitments (ZDCs) consistently sourcing with 70% of the per-tonne deforestation risk of their competitors.
“This is the first clear evidence of a link between ZDCs and lower deforestation risk in palm oil supply chains,” said Dr Robert Heilmayr of the University of California Santa Barbara (UCSB), who led the Trase research.
Refineries with traceability reports, which processed 87% of refined palm oil exports in 2018–2020, are also associated with lower deforestation risk. “Company transparency has now emerged as a positive factor, which has not always been the case previously,” said Dr Heilmayr.
According to the data, the largest markets for Indonesian palm oil – China, India and the domestic market – tend to rely on riskier supply chains, with 2.4 times the per metric ton deforestation risk of exports to the EU. China and Indonesia are both growing as destination markets.
Market concentration among exporters is declining. The top four accounted for 68% of exports in 2015, but only 59% in 2020.
“The fastest-growing smaller traders often lack strong commitments supported by transparent disclosures,” said Dr Heilmayr. “This raises concerns that the progress we’ve seen in the sector could falter – or even reverse.”
“Indonesia’s forests are not yet out of danger – 2.4 million hectares (ha) of intact forest remain in existing palm oil concessions,” said Auriga Nusantara Executive Director Timer Manurung. “Forest-rich areas in Kalimantan, Papua, Aceh and Sulawesi will face pressure if production expands, especially if new mills are built in areas with fewer mills today.”
“Trase data shows Indonesia making impressive progress,” said Helen Bellfield, Deputy Director of Trase at Global Canopy. “But the story of Brazil after 2012 warns us that gains in forest protection are fragile, and easily lost. This is the time to intensify both government and private sector efforts, such as strengthening the ISPO standard and stepping up implementation of ZDCs, including more detailed traceability reporting.”
“Deforestation for palm oil in Indonesia has declined significantly in recent years, and our data show that the greatest declines have occurred in supply chains governed by zero-deforestation commitments. However, these achievements are fragile, and rising palm oil prices and the growing role of traders who have lower levels of public transparency threaten to undermine progress. ”
— Dr Toby Gardner, Director of Trase and Senior Research Fellow at SEI
“Accelerating the implementation of existing commitments and ensuring that standards are raised across the sector, including through regulatory measures, is essential to maintain progress and continue to curb deforestation of these vitally important ecosystems,“ said Dr Toby Gardner.
Further key findings include:
- Annual deforestation for palm oil in 2018-2020 was 45 285 ha per year – only 18% of the average between 2008-2012, the period of peak deforestation over the last two decades.
- Borneo and Papua accounted for 77% of all palm-driven deforestation in 2018–2020. Palm oil produced in the province of Papua experienced a 24% increase in its deforestation risk, stemming from a near-doubling of its palm oil production from 2018–2020, which expanded onto recently cleared land from 2008–2017.
- KPN Corp, Astra Agro Lestari and Citra Borneo Indah (CBI), who are among the fastest growing traders, did not release traceability reports in 2020, despite adopting ZDCs. The average tonne of palm oil exported by these groups has a deforestation risk 1.7 times as large as the average of all other palm oil exports.
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Notes for editors
- From 15 September 2022, the data will be available on the Trase website. A launch webinar will take place at 14.00 (WIB) / 09.00 (CEST) / 08.00 (BST) with presentations by Dr Robert Heilmayr and Timer Manurung. Researcher Jason Benedict and Trase Deputy Director Helen Bellfield will also be present to take questions. Moderated by Gita Syahrani of the Sustainable Districts Association in Indonesia, the webinar will be bilingual (English and Bahasa Indonesia) with simultaneous interpretation. Register here.
- Deforestation risk is a metric describing past deforestation embedded in the trade of palm oil. It is calculated through a retrospective approach that aggregates past deforestation within the footprint of currently productive palm plantations. More information on the methods for calculating this is available on request.
- Auriga Nusantara is an Indonesian environmental NGO and Trase’s lead partner in Indonesia.
- Palm oil concessions are public lands allocated by governments to private companies for industrial-scale oil palm plantations.