Sustainable Palm Oil, informed by Life Cycle Assessment

Starting in 1906, United Plantations Berhad (UP) is one of the pioneer and largest plantation companies growing and processing palm oil in Malaysia. With over 43,374 hectares of plantation, the company boasts one of the highest yielding and most efficient production of palm oil in the country. Since 2008, UP has worked intensively to reducing their environmental impacts by means of Life Cycle Assessment (LCA), from cultivation of oil palms to the gate of the refinery including all upstream emissions.

Being an active member of the Roundtable on Sustainable Palm Oil (RSPO) since 2004, UP built strong sustainable practices foundation by becoming the world’s first producer of certified sustainable palm oil according to RSPO Principles and Criteria in 2008, re-certified again in 2013 and 2017, following RSPO rules.

To increase its overall sustainability, UP has been using LCA for over 15 years to support decision-making and to predict the potential environmental benefits of new technologies and practices for palm oil production. Some years ago the company set itself a challenging target to drive efforts towards increased efficiency:

The Challenge

To reduce the GHG emissions by 50% per metric tons of neutralised, bleached and deodorised (NBD) Palm Oil by 2019 vis-à-vis the 2004 level (3.63 kg.CO2.eq./kg NBD oil).

The Process

Integrate life cycle thinking and assessment into decision making and new technologies and practices, to address systemically the key hotspots while addressing trade-offs.

The Result

United Plantations GHG emissions including iLUC and nature conservation went from 3.63 to 1.64 kg.CO2.eq./kg NBD oil between 2004 and 2019, achieving 55% reduction rate.

UP considers several environmental impacts in their LCA studies to avoid potential trade-offs between life cycle stages or environmental impacts (e.g., global warming, biodiversity and respiratory effects). The LCA studies revealed some key insights:

  • The oil palm plantation stage is the biggest contributor to global warming of the palm oil value chain, whereas the oil mill stage is a negative contributor (through the valorisation of by-products).
  • UP’s total GHG emissions amounted 697,000 t CO2-eq in 2019 (including iLUC and nature conservation).
  • Indirect Land Use Change (iLUC) accounts for 15% of UP’s total GHG emissions 1.65 kg CO2-eq per kg oil without iLUC compared to 1.90 kg CO2-eq with iLUC but excluding nature conservation).
  • With a total of 7,688 ha of nature conservation reserves, UP significantly reduces GHG emissions from 1.90 to 1.64 CO2-eq per kg oil. This reduction almost exactly offsets the impact caused by iLUC (see above).

New technologies help reduce GHG emissions significantly, mainly from biogas plants, avoiding methane emissions.

“The process of the LCA studies has brought down wastages and helped us minimise our dependency on fossil fuels thereby helping the Company improve on its profitability and the well-being of its employees” – Carl Bek‑Nielen, CEO

Overall, the Life Cycle Impact Assessment results indicate that UP undoubtedly performs better compared to other oils studied for as good as all impact categories (See figure 1).

Figure 1: Comparison of LCIA results (including only iLUC and both iLUC and nature conservation) for 1kg NBD palm oil at United Plantations Berhad in 2019 with industry averages for 2016 for certified and non-certified palm oil (Malaysia and Indonesia), rapeseed oil (Europe), and sunflower oil (Ukraine).

“After implementing the LCA studies and acting on the recommendations United Plantation has lowered its GHG emissions per kg of refined palm oil by 55% from 2004 to 2019. This has been  a tremendously inspirational journey as we now see the effects of these long term investments that have helped us improve on our efficiencies and also attracted new customers who value a more sustainable way of doing business” – Carl Bek‑Nielen, CEO

References

Additional information can be obtained from the summary reports.

Last update: July 2020