The breakfast cereal manufacturer said its uses approximately 0.1 per cent of the global supply of palm oil annually.
"While palm oil is a very small percentage of our total ingredients, as a socially responsible company, concerns about the sustainable production of palm oil are clearly on our radar screen,” said Celeste Clark, chief sustainability officer at Kellogg’s.
The manufacturer maintains that by offsetting 100 per cent of its palm oil use through the GreenPalm programme, it is funding sustainable palm oil production, and the World Wildlife Fund (WWF) has backed the company’s initiative claiming that Kellogg's, as the first in the US food industry to take the step, is “setting an example for others to follow."
The GreenPalm scheme attempts to reward the sustainable production of palm oil by giving sustainable producers the right to sell certificates to manufacturers for a premium price. Although the oil they receive is not necessarily sustainably certified, in buying certificates equivalent to a certain volume of palm oil a manufacturer is promoting the sustainable production of the crop.
Kellogg’s said its goal is to "purchase sustainable palm oil once a segregated palm oil supply is available that is financially and logistically feasible.” The food group added that it will encourage its suppliers in this direction.
IOI-Loders Croklaan landed its first shipment of certified sustainable palm oil in North America last month, with a segregated delivery docking at New Orleans on February 20, the company said.
Food manufacturers claim that palm oil offers unmatched cost efficiencies compared to other vegetable oils.
But as demand for palm oil has increased, so have concerns about its sustainability. Where palm oil plantation areas have expanded in producing countries this has been at the expense of tropical rainforests. Labour relations and use of pesticides at plantations are also causing concern.
And switching to palm oil that is sustainable or supports green palm certification has become a major trend for food manufacturers and retailers. So far a clutch of processors have given a date by which they will use only sustainable palm oil in their products.
Gavin Neath, senior vice president of sustainability at Unilever, said that its objective to derive all of its palm oil from Roundtable on Sustainable Palm Oil (RSPO) certified plantations by 2015 was achievable, particularly as suppliers Cargill, Unimills and IOI have been landing segregated certified sustainable palm oil (CSPO) in Rotterdam.
"We expect acceleration in the quantities of CSPO coming onto the market, as these companies now recognise the industry demand for this form of the ingredient," he added.
UK manufacturer, United Biscuits, claims that by the end of 2011 it will have all ingredients containing palm oil using oil that is sourced form sustainable and segregated sources.