Palmoilmagazine.com, JAKARTA – Indonesia, the world’s top palm oil producer, is continuing to see steady growth in the development of a more sustainable industry. The Roundtable on Sustainable Palm Oil (RSPO), the leading global palm oil sustainability organisation, has witnessed significant growth in certification amongst the country’s independent smallholders and mills. The demand for and supply of RSPO Certified sustainable palm oil (CSPO) has been steadily increasing. In the first ten months of 2023 alone (January to October 2023), the RSPO, which operates through a voluntary membership-driven approach, has already seen a 19% increase in Indonesian membership, led largely by environmental NGOs, consumer goods manufacturers and smallholders.
Growth in RSPO Certification in Indonesia, prioritising support for smallholders
In 2022, Indonesia’s RSPO Certified area grew 4%, and continued to grow a further 6% from January 2023 to September 2023, to represent over 2.5 million hectares including plantations and independent smallholder (ISH) certified areas. In 2022, 25 new mills were certified against the RSPO Principles and Criteria (P&C) Standard, with numbers continuing to grow by a further 18 new units as of Q3 2023.
RSPO Certification amongst ISH groups grew by 41% compared to 2021, assisted by funding of up to US$180,000 disbursed through the RSPO Smallholder Support Fund (RSSF). To meet the growing demand for certification amongst smallholders in the country, between November 2022 and October 2023, close to US$141,000 was channelled to 17 smallholder projects mainly to offset certification-related audit costs, benefitting over 5,000 farmers.
Asian Agri, a palm oil producer whose subsidiary, PT. Inti Indosawit Subur, is a long standing RSPO Member, is amongst the many players operating in Indonesia who are committed to developing the country’s sustainable palm oil sector. Currently, all of its plantations in North Sumatra, Riau and Jambi provinces, as well as its scheme smallholder plantations have been RSPO Certified. In 2020, Asian Agri, alongside the palm oil processor, Apical, and Japanese global chemical and cosmetics company, KAO launched the Smallholder Inclusion for Better Livelihood & Empowerment (SMILE) Programme to assist independent smallholders in improving their yields and livelihoods.
“Independent smallholders today account for less than 20% of the total smallholders who are certified. SMILE is a multi-stakeholder collaboration that is designed to uplift independent oil palm smallholders in Indonesia, and secure a sustainable palm oil supply chain, through certification. Leveraging Asian Agri’s extensive experience in smallholder partnerships, we hope to support independent smallholders who face challenges such as inadequate agronomic knowledge and lack of access to larger markets. This is also part of our long term commitment to help 5,000 independent smallholders achieve RSPO Certification by 2030,” said Asian Agri Sustainability Officer, Doris Sukanto.
Transforming the downstream palm oil market in Indonesia
In Indonesia, CSPO production volumes grew 2.9% to 8.64 million metric tonnes in 2022 compared to 8.4 million metric tonnes in 2021. CSPO consumption is also on the rise, with volumes increasing by 3.9% to 318,400 metric tonnes in 2022, compared to 229,000 metric tonnes in 2021. In terms of overall domestic consumption in Indonesia, CSPO uptake grew from 1.2% in 2021 to 1.7% 2022.
Commenting on the progress made, Mahatma Windrawan Inantha, RSPO Deputy Director of Market Transformation, Indonesia, said, “Over the years, RSPO Members have played a fundamental role in steadily tipping the scale towards higher levels of sustainability within the Indonesian palm oil sector. In Indonesia, all signs point towards an industry that is ready to embrace the RSPO’s global sustainability standards, which is the best there is when it comes to the palm oil industry. Whether it’s the increase in certification amongst smallholders and mills or the increase in local uptake, remediation and even in conservation, we are seeing encouraging progress, and this comes down to the power of collaboration.”