Apollo Asia Fund

Oil palm plantations & climate change
5 recommendations for companies; 5 for government & authorities

At CIMB's Cooler Earth Sustainability Summit on 23 Sept, the following practical recommendations for the plantation sector were proposed by Dato' Henry Sackville Barlow, Independent Non-Executive Director of Sime Darby Plantation Bhd. These are his personal views.

As a plantation man, I would like to suggest the five most important measures the plantation industry can and should take to tackle climate change, followed by five measures which the government/authorities can take to encourage/facilitate these changes.

Industry measures

  1. Eliminate totally the discharge of methane from mill effluent/ponds into the atmosphere by 2030.
  2. Maximize use of biomass in the form of fibre and empty fruit bunches (but not fronds or palm trunks, to maintain soil carbon content, soil structure and fertility) for regional biomass plants, generating electricity sustainably to replace current coal imports.
  3. Use coastal areas made unsuitable for cultivation by encroaching salinity or increased flooding due to sea level rise, and roofed-over areas at mills, for large scale solar electricity generation.
  4. Offset remaining CO2 emissions by purchase of carbon credits, ensuring permanent protection for all remaining forested areas in the country.
  5. Take aggressive steps to minimize the carbon cost of each tonne of crude palm oil produced, mill by mill. Buyers will soon be demanding this. This will involve 'retirement' of large areas of oil palm currently planted on peat.

National measures

  1. Agree accelerated depreciation rates for approved methane capture and reuse plants. Such favourable rates to be reduced over the next 5 years, then changed to an increasingly ferocious tax on every tonne of methane emitted.
  2. The national power company TNB to be encouraged to work with the industry (MPOA?) to set up biomass electricity generation units throughout the country, to maximize renewable electricity generation from fibre and empty fruit bunches from mills within a radius of 100 km.
  3. Government to offer favourable depreciation rates for large scale solar electricity generation projects.
  4. Federal and state governments to liaise to encourage internationally approved and audited carbon credit schemes to preserve in perpetuity all remaining forests.
  5. The stock exchange, Bursa Malaysia, to require all quoted plantation groups (and perhaps all quoted companies?) to move within the next two years to full compliance with recommendations of the Task Force on Climate-Related Financial Disclosures.

Henry Barlow, 23 September 2021

Apollo Asia Fund comments:

Action plans for each sector, designed to start a process of change now with the directional clarity required for strategic planning, would be invaluable.

Do they exist for other sectors?

Too much verbiage is being devoted to the avoidance of change, rather than to clarifying practical steps for useful transformation. Perhaps others with long experience in each sector who are concerned for the environment and humanity, and have the necessary independence of spirit, could be persuaded to list their own 5+5s?

It would be encouraging to see these suggestions quickly adopted in Malaysia, and then elsewhere. The world needs sustainable palm oil, and it needs to eliminate unsustainable palm oil. Buyers need to support this by buying the one and not the other. Consumers worldwide can play their part by demanding that all products use only palm oil certified as sustainable.

Thanks to CIMB for encouraging conversations vital to all of our futures.

Claire Barnes, 25 September 2021

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