What role does transport play in the palm oil sector?

At present most palm oil travels long distances before it is consumed. It is transported from plantations to mills in the producing countries, then onwards to refineries in Europe, and finally to manufacturers and consumers in India, China, Europe, America, and the rest of the world. As with many internationally traded agricultural commodities, palm oil is transported by various modes, including trucks, ships, trains, and aeroplanes, all of which add to the cost and the negative impacts on the environment. Efficient transportation is essential for palm oil as it quickly deteriorates in quality after the crop has been harvested and milled.

What are the key challenges facing the transport sector?

When selecting the most appropriate supply route for transporting palm oil fractions and derivatives, companies face some key challenges, including:

  • evaluating the environmental and social impacts of transport
  • maintaining segregation and traceability of CSPO
  • establishing appropriate standards for infrastructure development and stakeholder involvement

Palm oil plantations are often situated in remote areas, with limited access by road. When plantations are first established, the companies involved will often build roads with the support of government agencies and investors. However, these developments have a large environmental impact, opening up once difficult to access forest to poachers and illegal logging and mining activities, causing pollution, and creating physical barriers for wildlife. Poorly maintained infrastructure and imprudent mill location can also have negative social impacts. The Reforming of extension services to improve palm oil milling and waste management case study by the Anjong Young Farmers Group highlights how infrastructure and transportation services can play an important role in maintaining supply, minimising cost, and supporting smallholders.

Balung Tawau Sabah Apas Balung Mill © CEphoto, Uwe Aranas via Wikimedia Commons

Balung Tawau Sabah Apas Balung Mill © CEphoto, Uwe Aranas via Wikimedia Commons

Large volumes of palm oil are exported globally by sea. Although this is one of the least carbon intensive modes of transport, the environmental impact of shipping must be taken in to account. The most efficient way to transport palm oil is in large containers, with oil from different sources mixed together in a single container. This mixing of oils makes traceability very difficult. Therefore the transportation sector faces similar challenges to refineries in terms of cost and efficiency in addressing the demand for segregated sustainable palm oil.

What can be done to improve practices in the transport sector?

Lifecycle analysis of company supply chains is a technique for assessing the environmental impact of a product over its entire lifecycle—in the case of palm oil, from plantation to consumption. This technique can help to improve company monitoring systems and prioritise actions in areas where the most serious impacts are identified. Companies from different sectors can calculate their greenhouse gas emissions using tools such as the BioGrace tool. The RSPO has also developed an emissions calculator specifically for the palm oil supply chain, the PalmGHG tool, which has been trialled by Rea Holdings as described in the case study Using the RSPO PalmGHG Greenhouse Gas Emissions Calculator.

There is increasing concern over the greenhouse gas emissions associated with the palm oil supply chain. There are a number of different international and regional initiatives underway to protect the environment from the impact of international shipping. Click here for more information.

The development of new infrastructure for transporting fresh fruit bunches and palm oil should take into consideration regional conservation priorities and be integrated within government land use plans to complement other land uses.

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Last updated: 05/08/2016