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Cargill extends sustainable palm oil commitment

By Elaine Watson , 13-Jul-2011
Last updated the 13-Jul-2011 at 10:46 GMT

Cargill has upped the ante in the sustainable palm oil stakes with a commitment that all palm oil products (excluding palm kernel oil products) it supplies to Europe, the US, Canada, Australia and New Zealand will be certified by the Roundtable on Sustainable Palm Oil (RSPO) and/or originated from smallholder growers by 2015.

This commitment will then be extended to cover all of its palm oil products and customers worldwide – including China and India – by 2020, said vice chairman Paul Conway.

“We hope this commitment will encourage more participation across the supply chain and help RSPO palm oil become the mainstream.”

RSPO certification

All four of Cargill’s US palm oil refineries have now been audited and certified by the RSPO, with two – in Kansas and North Carolina – offering certified sustainable palm already. The other two in California and Ohio would supply it if demand increased, said Cargill Oils & Shortenings national sales manager Kris Knudson.

Knudson, who was speaking to FoodNavigator-USA at the IFT show last month, also highlighted some of the challenges around supplying fractions and derivatives of certified sustainable palm oil at affordable prices to food manufacturers.

As palm oil was intermingled at every stage of the supply chain, and traceability required physical segregation, buying 100t of [premium-priced] sustainable palm to fractionate into 80t of olein and 20t of stearin if customers were only interested in sustainable stearin was a challenge, he said.

“Palm olein is the global vegetable frying oil of choice, and China and India are not demanding sustainable product, so it’s hard to justify producing certified sustainable oil to fractionate it just for sustainable stearin.”

70 percent of Cargill’s crude palm oil from RSPO members by end of 2010

Cargill’s European, Malaysian and Australian refineries have also received RSPO certification, along with its oil palm plantation at PT Hindoli in Sumatra, Indonesia. At the end of 2010, 70 percent of its crude palm oil was purchased from RSPO members.

Cargill also has its own policies on responsible palm oil production on its own plantations including commitments not to plant on high conservation value forests; not to develop new plantations on deep peat land or land that would threaten biodiversity; and a strict no-burn policy for land preparation.

Is the US behind the UK in sustainable palm oil stakes?

The US is not as advanced as some European market on sustainable palm, notably the UK, where NGOs such as Greenpeace and WWF had pressured most of the major retailers and manufacturers into making firm commitments, according to Bob Norman, general manager at the GreenPalm certificate trading scheme.

“But we’ve had some very positive meetings in the US. Walmart has also made a commitment to source sustainable palm for all of its private label products by the end of 2015, so it will be interesting to see how that impacts on the rest of the market.”

Sustainable palm oil: The options

US food manufacturers have three choices on the sustainable palm front.

The first is to buy certified sustainable refined palm oil, which is made by plantations adhering to criteria laid down by the RSPO, segregated throughout the supply chain and fully traceable. AAK, Loders Croklaan and Cargill (as of May 30) all now supply this.

For manufacturers using more complex palm oil fractions and derivatives/blends, the most affordable options are the book and claim/GreenPalm scheme or the ‘mass balance’ system.

Buyers of GreenPalm certificates can guarantee that a tonnage of oil or derivatives equivalent to the tonnage they use has been produced from sustainable sources. While buyers can't guarantee the actual oil they are buying is from an RSPO-approved plantation, they at least know the amount they use has been produced sustainably.

The third option – mass balance –combines some segregated certified/traceable sustainable oil and some standard oil.

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