Deforestation for palm oil exports falls in Indonesia

News / 15 Sep 2022

New Trase data reveals positive progress in Indonesia on deforestation linked to palm oil. For the first time there is also evidence that zero-deforestation commitments are linked to better performance.

A new assessment of palm oil exports from Indonesia between 2018-2020 shows a nationwide decline in the deforestation linked to the sector’s exports. The data, released by Trase, our partnership initiative with the Stockholm Environment Institute (SEI), found annual deforestation for palm oil was 45,285 hectares per year – significantly lower than when deforestation peaked between 2008 and 2012.

The data also showed that exporters with zero-deforestation commitments (ZDCs) had 30% less deforestation risk per tonne of palm oil. Refineries with traceability reports, which processed 87% of refined palm oil exports in 2018-2020, were also associated with lower deforestation risk.

Increased scrutiny from the importing markets of the EU, UK and US has spurred improved company disclosures. The data clearly shows deforestation risk tends to be lower in areas of production where more traceability information is provided about mills.

However, there are still areas of major concern. Palm-driven deforestation in Indonesia is concentrated in Borneo and Papua and together, these islands accounted for 77% of all palm-driven deforestation. Bucking the trend, palm oil production in Papua doubled between 2018 and 2020. 

In addition, market concentration among exporters is declining. The top four accounted for 68% of exports in 2015, but only 59% in 2020. And the increased market share is being captured by newer, smaller suppliers with comparatively poor performance on forests and transparency. Dr Heilmayr says that is a worry. “The fastest growing, smaller traders often lack strong commitments supported by transparent disclosures, this raises concerns that the progress we’ve seen in the sector could falter – or even reverse.”

The data also shows that zero deforestation commitments alone are not enough. The average tonne of palm oil exported by the fastest growing traders who have ZDCs, but didn’t release traceability reports in 2020 has a deforestation risk 1.7 times as large as the average of all other palm oil exports.

There are now calls for action from the largest markets for Indonesian palm oil, China, India and the domestic market. These tend to rely on riskier supply chains, with 2.4 times the per-tonne deforestation risk of exports to the EU. Buyers in Indonesia, India and China have real power to demand regulation and the adoption of ZDCs and disclosure across the whole sector through positive engagement with suppliers.  

Watch the Trase webinar in full, in either English or Indonesia Bahasa, or read a summary of the webinar

Source: Trase
Source: Trase
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