Palm oil and its derivatives are part of thousands of products across the globe today. One can find it in biodiesel, soap, doughnuts as well as soap, to mention only a few. Since 1990, palm oil consumption has quintupled worldwide. The demand in Asia, where palm oil is used in cooking oil, accounts for a $44 billion industry. Indonesia is the world’s largest producer of palm oil, with a forecasted annual growth in production of 10%. Early 2013, exports from Indonesia hit a five-year high.
In 2012, the total plantation area for palm oil production in Indonesia was estimated to account for approximately 7.65 million hectares generating 22 million tons of palm oil. Indonesia aims to double its current palm oil production to 40 million tons by 2020. Estimates vary how much land this will require vary widely, ranging from 5-20 million additional hectares. This expansion threatens remaining tropical forest and peat land.
However, there are opportunities for production increases through productivity gains and use of degraded lands. The need to balance growth and economic potential and maintaining healthy ecosystems and communities is fundamental to secure the future of both forests in Indonesia and improved livelihoods through economic growth.
The government recently established a national certification scheme called ISPO, which requires producers to comply with existing regulations for palm oil production, environmental management, responsibility to workers and social communities. UNDP supports the operationalization and optimization of ISPO, as it covers all producers in Indonesia to ensure compliance with the Indonesian legal system. RSPO (Roundtable for Sustainable Palm Oil) is also important in that it provides best practice standards. Therefore collaboration between these two schemes is crucial for the sustainable future of the Indonesian palm oil sector.
'The objective: Promoting sustainable palm oil by reducing deforestation and facilitating structural change in the palm oil sector'
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