PALMOILMAGAZINE, KUALA LUMPUR — The Roundtable on Sustainable Palm Oil (RSPO) 2025 placed smallholder welfare at the forefront of discussions, unveiling plans to explore a carbon-sequestration payment mechanism that would allow palm oil smallholders to earn additional income from sustainable cultivation practices.
According to Guntur Prabowo, Head of the RSPO Smallholders Unit, this initiative represents a promising breakthrough amid the growing global focus on green economy and carbon trading.
“We want to explore this opportunity further,” Guntur said during the Annual Roundtable Conference on Sustainable Palm Oil (RT2025) in Kuala Lumpur on Monday (November 3, 2025).
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Under the proposed mechanism, smallholders would be rewarded for capturing and storing carbon dioxide through climate-friendly practices such as zero-burning land preparation, soil improvement, forest preservation, and oil palm replanting. The amount of carbon sequestered would be measured, verified, and converted into carbon credits—each representing one ton of CO₂ equivalent—which could then be traded on international carbon markets.
“This won’t be an easy journey. There’s still a lot of complexity in how reward schemes and carbon markets function,” Guntur added, as quoted by Palmoilmagazine.com from The Edge Markets on Tuesday (November 4, 2025).
Further details on the initiative are expected to be outlined in a memorandum of understanding (MoU) to be signed on Tuesday (November 4, 2025). The agreement involves RSPO, the Asia School of Business (ASB) through its Centre for Sustainable Small-owners (CSS), and the National Association of Smallholders (NASH). The partnership aims to strengthen smallholder resilience through training, digital readiness, and access to sustainable financing.
“We support all initiatives that add value to smallholders implementing sustainable practices—whether through carbon credits, productivity enhancement, or stronger partnerships,” Guntur emphasized.
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Meanwhile, Solidaridad, an international civil society organization, also highlighted the economic potential of such a mechanism. In its Palm Oil Barometer 2025 report titled Procurement for Prosperity, Solidaridad noted that providing carbon sequestration incentives could offer smallholders an alternative income source while enhancing their contribution to climate change mitigation.
The report further explains that this approach would enable smallholders to participate in global carbon markets by selling verified carbon removal units—a model previously piloted in the coffee and cocoa sectors.
As a long-time advocate for inclusive and sustainable supply chains, Solidaridad continues to support palm oil farmers in adopting climate-resilient agricultural practices. With backing from various partners, RSPO hopes this initiative will mark a new chapter in smallholder empowerment amid the transition toward a low-carbon economy. (P2)
