- Deforestation for oil palm cultivation in Indonesia, Malaysia and Papua New Guinea dropped in 2021 to its lowest degree since 2017, in response to a brand new evaluation by Chain Response Analysis (CRR).
- This marks the second straight yr of declining palm-linked deforestation on this area, which produces greater than 80% of the world’s palm oil, regardless of the worth of the commodity hitting all-time highs final yr and this yr.
- Researchers attribute the decline in deforestation to an growing variety of firms adopting no-deforestation insurance policies, and smaller firms with out such commitments merely working out of forest to clear.
- However issues over future deforestation persist because the Indonesian authorities ramps up its palm-oil based mostly biodiesel program, which sources a few of its palm oil from firms which can be recognized deforesters.
JAKARTA — Deforestation related to palm oil within the area overlaying Indonesia, Malaysia and Papua New Guinea has declined for the second straight yr, a brand new evaluation exhibits, dropping to its lowest degree since 2017.
The decline bucks issues that palm oil deforestation would expertise a surge final yr, following the 2020 downturn, on the again of rallying palm oil costs.
The evaluation, by sustainability danger evaluation group Chain Response Analysis (CRR), exhibits that deforestation within the three nations for oil palm plantations amounted to a complete of 19,000 hectares (46,900 acres), an space the dimensions of Washington, D.C.
This represents a 50% decline from the 38,000 hectares (93,900 acres) of palm oil deforestation recorded in 2020, in response to the evaluation, which was coordinated by analysis consultancy Aidenvironment and Earth Equalizer, its Indonesian spinoff.
Glenn Hurowitz, CEO of U.S.-based advocacy group Mighty Earth, referred to as the findings “a giant deal,” noting that the determine for 2021 was lower than 5% of historic ranges.
“This progress occurred on the similar time that commodity costs are via the roof, with palm oil at an all-time file of $1,485 per ton,” he wrote on LinkedIn.
Commodity costs are sometimes related to deforestation. A 2021 examine, not peer-reviewed, by researchers from know-how firm TheTreeMap and different establishments discovered that charges of each plantation growth and forest loss correlated with palm oil costs.
In accordance with the examine, a value decline of 1% was related to a 1.08% lower in new plantations and a 0.68% lower in forest loss.
So when the palm oil value just lately rallied to a file excessive amid a plunge in world edible oil shares, and is predicted to proceed to climb to $1,900 per metric ton in coming months, environmentalists say this might spur the plantation business into broaden and clearing forests because the profitability of clearing for palm oil additionally will increase.
However deforestation continued to go down for 2 years in a row regardless of the palm oil value using on all-time highs.
This, Hurowitz mentioned, means “the hyperlink between deforestation and agricultural growth in palm oil appears to have been just about damaged.”
That may be the case for firms which have commitments to not deforest or clear peatland or exploit staff, often called an NDPE coverage, and function inside NDPE provide chains, in response to Aidenvironment Asia program director Christopher Wiggs.
Wiggs, one of many researchers for the CRR report, mentioned these firms are largely not deforesting anymore. However firms with no NDPE commitments are nonetheless clearing rainforests and might nonetheless promote their palm oil within the “leakage market,” which trades unsustainable palm oil from growers and producers, mentioned Aidenvironment Asia researcher Okita Miraningrum, who was additionally concerned within the CRR analysis.
“It means so long as the ‘leakage market’ nonetheless exists, it’s troublesome to realize zero deforestation,” she advised Mongabay.
A unbroken development — or a blip?
Palm oil deforestation reached a historic excessive of 400,000 hectares (1 million acres) per yr between 1997 and 2006 in Indonesia. The nation is the world’s prime producer of palm oil; along with Malaysia, the No. 2 producer, the 2 Southeast Asian nations account for eight-tenths of worldwide provide. The excessive deforestation fee in Indonesia was spurred by authorities insurance policies that inspired additional plantation growth on the islands of Borneo, Sulawesi and Papua within the early Nineteen Nineties.
Now that extra firms have adopted NDPE insurance policies, most deforestation is carried out by smaller firms that don’t function inside NDPE provide chains, Okita mentioned.
Prior to now, a few of these firms, which appeared in CRR’s lists of prime deforesters, have been recognized to provide palm oil to client manufacturers with NDPE insurance policies. In 2020, seven of the highest 10 deforesting firms may undoubtedly be linked to client manufacturers with NDPE insurance policies.
However 2021 marks the primary time that not one of the prime 10 deforesters are actively supplying manufacturers with NDPE insurance policies. In different phrases, all prime 10 deforesters in 2021 have been supplying to the non-NDPE market.
“The development is for deforestation to be carried out by small firms whose hyperlinks [to the NDPE markets] are comparatively unknown,” Okita mentioned. “The sizes of their concessions are additionally comparatively smaller than these owned by large firms. That’s why the deforestation fee additionally declined.”
One other doable clarification behind why deforestation declined on the time when palm oil costs surged is that these small firms have been clearing forests of their concessions for years and have primarily run out of forests. The most important deforester in 2021, PT Bengalon Jaya Lestari (BJL), as an example, was additionally within the prime 10 in 2020. That yr, it cleared 2,790 hectares (6,900 acres) on concessions held by its subsidiaries, PT Kartika Nugraha Sakti and PT Wana Jaya Abadi, in Indonesia’s North Kalimantan province, in response to CRR.
In 2021, it cleared 3,200 hectares (7,900 acres) on the 2 concessions.
“The deforesting firms are the standard suspects,” Okita mentioned. “My guess is that they’ve began working out of forests to be cleared.”
One other doable driver for the decline in deforestation is the COVID-19 pandemic and related motion restrictions, Okita mentioned.
“Palm oil deforestation began to say no drastically in 2020 [down by 58% from 2019],” she mentioned. “At the moment, palm oil costs have been down earlier than rocketing in 2021. So in my view, the decline in deforestation is extra affected by the pandemic and restrictions in mobility.”
These uncertainties imply it’s too early to say whether or not the declining deforestation will probably be a long-term development, in response to Wiggs.
“We gained’t know till COVID has handed whether or not this can be a blip or a seamless development,” he mentioned.
One factor that may decide the way forward for palm oil deforestation is the dimensions of the leakage market, Okita mentioned.
“How large will it develop? One of many firms within the prime 10 deforesters is a agency that operates in [Indonesian] Papua, and the deforestation continues to be ongoing. Who will purchase [palm oil] from them?” she mentioned. “The dimensions of the leakage market would be the principal determinant of the deforestation development in oil palm concessions.”
One supply of the leakage market in Indonesia is the federal government’s biodiesel program, which goals to extend using palm oil-based biodiesel within the nation. Nevertheless, not the entire biodiesel for this system is provided by firms which have NDPE insurance policies, Wiggs mentioned.
Whereas many of the quantity will probably be provided by NDPE-committed firms, that also leaves 13.3% of the availability, or 1.3 billion liters (343 million gallons) that may come from firms with out an NDPE coverage.
Compounding the issue, in 2019 Indonesian state-owned power firm Pertamina, a key participant within the biodiesel program, ended an settlement with Italian oil main Eni to construct a palm oil-to-biodiesel refinery, citing Eni’s extra stringent sustainability requirements: Eni, it turned out, refused to simply accept non-sustainable or non-traceable crude palm oil.
This leaves Indonesia’s biofuel sector with weaker requirements than the NDPE market, and means it now offers the leakage marketplace for a number of suppliers that might in any other case be shut out of the NDPE provide chain on account of deforestation.
“We’ve seen with the case of Jhonlin that firms with substantial deforestation are being given entry to the home biofuel market,” Wiggs mentioned.
The Jhonlin Group, via a subsidiary, Jhonlin Agro Raya, is among the many 22 refinery firms which were awarded a biodiesel allocation by the federal government.
This regardless of the corporate having well-documented deforestation points. Jhonlin was in CRR’s listing of prime 10 palm oil deforesters in Southeast Asia from 2018 to 2020. It cleared roughly 11,900 hectares (29,400 acres) of forest throughout its subsidiaries’ oil palm concessions throughout that interval.
With Indonesia’s biodiesel program using weaker sustainability requirements, there are issues that deforestation will choose up once more as the federal government retains pushing for larger biodiesel manufacturing. The federal government has introduced that manufacturing this yr will probably be up 6.4% from 2021, amounting to 10 billion liters (2.64 billion gallons).
“Growing use of palm oil diesel in Indonesia and different Asian nations might improve stress on forests,” Wiggs mentioned.
Deforestation for palm oil in 2021 additionally occurred exterior recognized concession boundaries, together with in smallholder-managed plantations, which Okita mentioned CRR doesn’t embrace in its evaluation.
However a 2021 examine exhibits that deforestation in smallholder plantations has additionally been declining. It mentioned general plantation growth, each industrial-scale and smallholder, dropped in 2019 to pre-2004 ranges, with the latter experiencing a sharper dip. The examine attributed this to numerous components, together with a decline in crude palm oil costs in recent times.
Nonetheless, the examine additionally mentioned that demand from Indonesia’s biodiesel program may stimulate growth, notably on the expense of forests that aren’t lined by a clearing moratorium imposed by the Indonesian authorities.
Dedy Sukmara, director of knowledge on the Indonesian environmental NGO Auriga, which additionally contributed to CRR’s 2021 examine, referred to as on the Indonesian authorities to subject a coverage defending all pure forests inside current concessions, even when permits to clear the forests have already been issued.
“If firms have acquired permits, then the forests of their concessions can’t be protected [by law],” he advised Mongabay. “However they’ll nonetheless be protected with market mechanisms, equivalent to excessive conservation worth [HCV]. The Indonesian legal guidelines and rules ought to have offered the safety, however as an alternative we now have to depend on market mechanisms.”
Banner picture: A fireplace burning in oil palm plantaions in deforested Sabah, Malaysia. Picture by Rhett A. Butler/Mongabay.
FEEDBACK: Use this manner to ship a message to the writer of this submit. If you wish to submit a public remark, you are able to do that on the backside of the web page.