The future of palm oil hangs in the balance

Palm oil faces a complex future, with new regulations and pressures challenging the ongoing sustainability of the industry.

Palm oil — a versatile and widely used, although sometimes criticised, product — stands at a critical crossroads.

The European Union's new deforestation regulations threaten the industry, particularly major exporters such as Malaysia and Indonesia, by banning agricultural imports cultivated on lands deforested after 2020.

A Singapore-flagged palm oil tanker was found to have discharged oily waste into Malaysian waters, highlighting flaws in international pollution laws. Although this practice is legally permitted, critics arguet it is an overlooked environmental issue that needs stricter regulation.

In an attempt to showcase Malaysia's commitment to conservation and biodiversity, the country plans to introduce "orangutan diplomacy" similar to China's "panda diplomacy". However, many environmentalists claim such a move is problematic and hypocritical.

The Malaysian palm oil industry is making strides in addressing sustainability issues.

The industry is pursuing advancements in converting palm biomass into renewable energy sources, aiming to reduce its carbon footprint.

These efforts include leveraging palm oil's by-products to support Malaysia's transition towards a low-carbon economy.

But fully decarbonising the palm oil value chain involves implementing sustainable practices across all production stages.

Key remaining obstacles include ensuring that sustainability practices are uniformly adopted and overcoming technological barriers.

Palm oil has the potential to play a significant role in addressing the world's food security challenges. Its high yield per hectare makes it a valuable crop for meeting global nutritional needs.

Sustainable production methods, including improved land management and environmentally friendly farming techniques are crucial for ensuring that palm oil contributes to global food security in an eco-friendly way.

Empowering Malaysia's smallholder farmers is a critical aspect of advancing sustainability in the palm oil sector.

These farmers, who manage significant portions of palm plantations, can benefit from technological advancements and supportive policies that can help enhance their productivity and sustainability.

The expansion of large-scale monoculture plantations in northeast India has had severe environmental and socio-economic repercussions.

The push for extensive oil palm cultivation in this region has led to deforestation, loss of biodiversity and disruption of local communities' economic and social stability.

Indonesia’s smallholder farmers face their own challenges too. They struggle with inadequate legal protections and land rights insecurity, which affect their ability to manage their plantations effectively.

Addressing these challenges is crucial for ensuring fair and sustainable practices within the Indonesian palm oil sector and supporting the livelihoods of small-scale farmers.

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Shahirah Hamid is the Senior Commissioning Editor at 360info Southeast Asia

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