JAKARTA – Sustainability commitments and greater scrutiny of supply chains are helping to reduce deforestation rates associated with palm oil in Indonesia, a new analysis suggests.
The country is the world’s top producer of the commodity, and although prices are rising while production is increasing – factors that typically increase forest clearing for new plants – the rate of deforestation has decreased significantly, palm. The oil supply chain mapping initiative is found analyzed by Trace.
Experts attribute this trend to a growing number of companies adopting commitments to not deforestation, and smaller companies without such commitments are simply pulling out of the woods.
“This shows that Indonesia’s palm oil can be developed without deforestation,” said Timar Manurung, director of Indonesian environmental NGO Auriga Nusantara, which was not involved in the analysis. “So no-deforestation palm oil is not something that is impossible.”
Historically, the link between zero-deforestation commitments and low deforestation rates has not always been clear. Indeed, in the first few years after companies adopted zero-deforestation commitments, the supply chains tied to such commitments had relatively uniform deforestation risks for the wider region.
“Back in 2018, we didn’t see much evidence that exporters with zero-deforestation commitments were sourcing palm oil with a dramatically reduced deforestation footprint,” said Professor of Environmental Economics at the University of California, Santa Barbara. Assistant Professor Robert Heilmayer, who led the Trace research.
It shows that deforestation for palm oil has fallen by 82% over the past decade to 45,285 hectares (111,902 acres) annually from 2018–2020, which is only 18% of its peak from 2008–2012.
The annual area of forests in Indonesia converted to oil palm plantations (thousand hectares, red bars) and annual crude palm oil production (million tons, black lines) during 2001–2020. Image courtesy of Trace.