Carbon Footprint of Palm Oil Production in Indonesia

Seminars 06, Dec 2011


Background and Rationale of the Study

Palm oil production in Indonesia (and also in Malaysia) has become focus of debate on greenhouse gas (GHG) emissions, through its association in the public debate with deforestation and (over) use of peat land. The potential use of palm oil as biodiesel to reduce dependency on and emissions from the use of fossil fuel (so far involving small volumes only) has focused debate on the emissions caused by the conversion of land to oil palm and subsequent steps in the production. European countries have been leading in the development of environmental standards for bio fuel and developed a typical emission scenario for palm oil production. Current consumer demand is to secure good environmental practices in the production and processing stage, alongside attention to social and economic dimensions of viability and maintaining high product quality and safety. In response to these concerns, a new type of public-private-NGO partnership has emerged in the form of the Roundtable on Sustainable Palm Oil (RSPO). In its definition of standards for sustainable palm oil production, the RSPO has not yet agreed on specific level of allowable carbon footprint of palm oil and other greenhouse gas emissions, but the rules imply practices that will also reduce emissions compared to current business as usual.

If Indonesia wants to export palm oil to the European countries, specifically for use as biofuel, it has to comply with the Renewable Energy Directive (RED) regulation, an EU Directive of the European Parliament and Council on the promotion of the use of energy from renewable resources. The objectives of RED are focused on mitigation of climate change through the reduction of greenhouse gases emissions, sustainable development, secure supplies of energy, and the development of knowledge based industry creating jobs, economic growth, competitiveness and regional and rural development. The new EU directive excludes conversion of high-biodiversity land and high carbon stock areas such as peat lands, wetlands and continuously forested areas.

Production situations of oil palm in Indonesia are diverse and include peat versus mineral soils as main ecological contrast, large-scale plantations versus smallholders as socio-economic contrast and plantations developed from forest (after logging) versus plantations developed on lands with low current carbon stocks due to previous degradation. The sector (or at least the more progressive parts of it) is now willing to engage in debate on environmental impacts and GHG emissions, but needs support in understanding carbon (and other GHG) accounting procedures and in capacity development for data collection and analysis. Data for currently feasible ?best practice? will play a key role in the self-adjustment of the industry (closing the gap between average and best practice) and in efforts to maintain market share.

The targets set by the new EU guidelines on bio fuel are in reach for current good practice on mineral soils, not for oil palm on peat soils. Differentiation of product by geographic or ecological origin requires detailed data obtained with standardized methods and opens to public scrutiny. Key decisions on reference dates in the international climate policies (1990 for reforestation, possibly 2000-2005 for REDD, 2008 for EU footprint accounting of bio fuel) are still under discussion, as is the scope of the methods (deforestation/forest degradation or full C (+ equivalent GHG?s) accounting; inclusion of peat drainage issues); a comprehensive approach to data collection is needed, including timelines of C-stock loss ahead of oil palm plantations.

With the above circumstances in mind, a study was initiated entitled ?Reducing GHG emissions associated with oil palm in Indonesia: accounting for greenhouse gas emissions over the full life cycle on peat and mineral soils and building capacity for an industry response to emerging environmental regulation in European markets?. This report summarizes its technical results, as input to a wider policy debate.

Objectives and Expected Output of the Study 
The goal of the study was to assist in the reorientation of oil palm production in Indonesia to reduce emissions of greenhouse gasses and protect carbon stocks, while maintaining economic benefits, utilizing comparative advantage in global trade and supporting evidence-based environmental policies.

The study had four objectives:
(1) life-cycle analysis of emissions under current practice and the way these emissions vary with soil, management, yield levels and technology
(2) Analysis of what is achievable under current best practice in support of self-regulation of the industry and of external standards, such as EU bio fuel guidelines
(3) Economic analysis of oil palm production by plantations and smallholders to evaluate the opportunity costs ofr avoidable emissions ($/t CO2e) as the ratio of economic benefits and environmental costs, and in   the context of socio-economic impacts of palm oil production in rural economies; and
(4) Increased capacity of the applied research to assess GHG emissions with internationally accepted methods to at level

The expected outputs of the study were:
(1) Analysis of GHG emissions and C-debt of oil palm plantations across the main production areas (peat lands and mineral soils), focused on a) pre-plantation land use history and b) plantation management (up to harvested fruit bunch stage), based on at least 9 case studies representing the range on production conditions;
(2) Recommendations for technical opportunities to reduce emissions in the production stage and generic scheme for analysis and standardized methods to be used in further replication and refinement
(3) Abatement cost curves ($/t CO2e) for different oil palm production situations, refining analyses done under the Avoided Deforestation with Sustainable Benefits (ADSB) project; and
(4) Human capacity for further data collection and analysis.


Agenda Acara Seminar Hasil Penelitian Jejak Karbon (Carbon Footprint) dari Produksi Minyak Sawit di Indonesia

Senin, 28 Nopember 2011 di Ambhara Hotel, Dirgantara Room, Lt. 2
Jl. Iskandarsyah Raya No.1, Jakarta Selatan

Waktu  Acara
 08:30 – 09:00 Pendaftaran Peserta
 09:00 – 09:25 Pembukaan

  1. Laporan Panitia (Dr. Rosediana Suharto/KMSI)
  2. Sambutan dan pembukaan resmi oleh Direktur Jenderal Perkebunan Kementerian Pertanian (Ir. Gamal Nasir, MS)
 09:25 – 09:40 Rehat kopi
 09:40 – 12:15 Sesi I: Pembahasan Laporan Hasil Penelitian Jejak Karbon (carbon footprint) dari Perkebunan Kelapa Sawit di Indonesia (Penelitian Biofisik) Moderator: Dr. Rosediana Suharto (KMSI)

  1. Penjelasan umum, tujuan dan pelaksanaan Penelitian Jejak Karbon (carbon footprint)
    dari Produksi Minyak Sawit di Indonesia (Dr. Rosediana Suharto/KMSI).
  2. Laporan Hasil Penelitian Jejak Karbon (carbon footprint) dari Produksi Minyak Sawit di Indonesia Penelitian Biofisik (Tim Peneliti Biofisik ICRAF).
  3. Tanggapan dan tinjauan tentang emisi GRK yang dihasilkan oleh perkebunan kelapa sawit
    di lahan gambut (proses emisi dan cara-cara menguranginya (Drs. Wahyunto, MSc/
    Balai Besar Litbang Sumberdaya Lahan Pertanian, Bogor).
  4. Tanggapan dari sisi EU RED criteria (Timo Haatainen/Neste Oil).
  5. Tanggapan dari sisi praktek pertanaman kelapa Sawit di lahan gambut (Dr. Lulie Melling/Tropical Peat Research, Sarawak).
  6. Emisi GRK dari perkebunan kelapa sawit di lahan Tanah mineral (J.P Caliman/PT SMART, Tbk).
  7. Diskusi/Tanya-Jawab
 12:15 – 13:30  Rehat sholat dan makan siang
 13:30 – 15:10 Sesi II: Pembahasan Laporan Hasil Penelitian Jejak Karbon (carbon footprint) dari Perkebunan Kelapa Sawit di Indonesia (Penelitian Sosial-ekonomi)
Moderator: Dr. Rosediana Suharto/KMSI
  1.  Laporan Hasil Penelitian  Jejak Karbon (carbon footprint) dari Produksi Minyak Sawit di Indonesia Penelitian Sosial-Ekonomi (Tim Peneliti Sosial-Ekonomi ICRAF).
  2. The abatement cost curve of oil palm plantation in Peatland in Indonesia (Martin Goetz/Mckinsey & Company).
  3. Tanggapan dan tinjauan tentang aspek sosial- ekonomi dari perkebunan kelapa sawit di lahan gambut, dan perbandingannya dengan lahan tanah mineral (Dr. Herman Hanafi/Riset Perkebunan Nusantara,Bogor).
  4. Diskusi/Tanya-Jawab
 15:10 – 15:30  Rehat kopi
 15:30 – 16:45 Sesi III: Presentasi tentang emisi dari tanah mineral dan gambut, serta perkembangan kriteria EU REDModerator: Suseno Budidarsono/ICRAF.

  1. The development of EU RED criteria on  indirect  land use change and grassland  (Timo Haatainen/Neste Oil).
  2. The methodology of planting oil palm on peatland and its relation with EU RED criteria
    (Dr. Lulie Melling/Tropical Peat Research).
  3. Emission reduction and best practices in peat soil
    (Faizal Parish/Global Environment Centre).
  4. Diskusi/Tanya-Jawab
16:45 – 17:15 Kesimpulan Umum dan Penutupan (Dr. Rosediana Suharto/KMSI)

Jakarta, 15 November 2011