Annual Progress Report - Efeca · Annual Progress Report – UK Roundtable on Sourcing Sustainable...
Transcript of Annual Progress Report - Efeca · Annual Progress Report – UK Roundtable on Sourcing Sustainable...
AnnualProgressReport
UKRoundtableonSourcingSustainablePalmOil
December2017
Efeca
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil ii
TableofContents1. Introduction.......................................................................................................................................................................1TheUKRoundtableCommitmentandtheAmsterdamCommitment...............................................................1
2. OverviewofpalmoilusageintheUK.............................................................................................................3A. PalmOilUsageintheUKviaUKrefiners.................................................................................................................4ImportsofPhysicalCertifiedSustainablePalmOil....................................................................................................4PurchasesofGreenPalmcertificates................................................................................................................................5
B. PalmOilUsageviaNon-UKRefiners...........................................................................................................................7FinishedgoodsandIngredientsusageamongConsumerGoodsManufacturersandRetailers ................................................................................................................................................................................7OwnBrandvs.Brands........................................................................................................................................................8
C. SpotlightonOleochemicals,AnimalFeedandFoodService............................................................................9OleochemicalManufacturers..........................................................................................................................................9AnimalFeed.........................................................................................................................................................................11Foodserviceindustry......................................................................................................................................................12
3. Conclusionsandnextsteps..................................................................................................................................14Annex1. FractionsandDerivativesSupplyChain......................................................................................................iAnnex2. DevelopmentofMethodology.........................................................................................................................iiAnnex3. 2016Methodology...............................................................................................................................................vAnnex4. OilWorldFigures..............................................................................................................................................viiiAnnex5. Biofuels....................................................................................................................................................................ixAnnex6. Revised2015RefinerFigures.........................................................................................................................xAnnex7. Stakeholderquestionnaire..............................................................................................................................xiAnnex8. SummaryofStakeholderSurveyresults...................................................................................................xiAnnex9. QualitativeUpdatesfromRoundtableMembers..............................................................................xviii
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1. Introduction
TheUKRoundtableCommitmentandtheAmsterdamCommitmentTheUKRoundtableonSourcingSustainablePalmOil(Roundtable)isanindustryalliancethataimstopromotetheuptakeofsustainablepalmoilintheUK.Inexistencesince2012,membersincludetradeassociationsforkeypalmoilusingsectors,the4majorUKrefiners,andNGOs.1 TheRoundtablewasoriginallyformedwhenDefrapublishedtheUKstatementonsustainablepalmoilin2012,2whichbroughttogethertradeassociationsforpalmoil-usingsectors,theUKgovernmentandtheWorldWildlifeFundtoagreetoworktowards100%sourcingofcrediblycertifiedsustainablepalmoilby2015.3,4Followingtheendofthe2015commitmentperiod,theRoundtablereformedandagreedtosigntheAmsterdamCommitmentsupporting100%SustainablePalmOilinEuropeby2020.Withthesigningofthe‘CommitmenttoSupport,’theRoundtablejoinedvariousEuropeanprivatesectororganisationstoensureafullysustainablepalmoilsupplychaininEuropeby2020.TheCommitmenttoSupportwasoriginallyinitiatedbyIDH,theSustainableTradeInitiativeandMVO,theNetherlandsOilsandFatsIndustry,whoestablishedtheEuropeanSustainablePalmOilprojectinDecember2015.Inresponse,thegovernmentsofkeyEuropeanUnioncountriesdeclaredtheirsupporttowardstheprojectbysigningtheAmsterdamPalmOilDeclarationinsupportofa“privatesector-drivencommitmentto100%sustainablesourcingandincreasedtraceabilityofpalmoilbynolaterthan2020.”5ThewiderAmsterdamDeclarationsareintendedtostimulateprivatesectorcommitmentandprogressonagriculturalcommoditiesassociatedwithdeforestation(suchaspalmoil,soyaandcocoa).TheCommitmenttoSupportisnotazero-deforestationcommitment.Italsodoesnotcommitsignatoriestosource100%physicalCSPO.TheUKRoundtablesigningoftheAmsterdamCommitmentbuildsonpreviousworktosource100%CSPOby2015throughthe2012UKstatementonsustainablepalmoil.Aspartofit,theRoundtablehasagreedtocontinuetoreportannuallyonprogressintheUK,andworkwithothersignatoriestotheAmsterdamCommitmentonincreasingtheuptakeofsustainablepalmoil.
1TheRoundtableincludestheFoodandDrinkFederation,SustainableRestaurantAssociation,BritishHospitalityAssociation,ChilledFoodAssociation,BritishRetailConsortium,FederationofWholesaleDistributors,BusinessServicesAssociation,BritishAssociationforChemicalSpecialties,UKCleaningProductsAssociation,AgriculturalIndustriesConfederation,NationalEdibleOilDistributors’Association,SeedCrushersandOilProcessorsAssociation,RenewableEnergyAssociation,UKPetroleumIndustryAssociation,WorldWildlifeFund,ZoologicalSocietyofLondon,ForestCoalition,BritishandIrishAssociationofZoosandAquariums,andFoodAdditivesandIngredientsAssociation. 2https://www.gov.uk/government/publications/sustainable-production-of-palm-oil-uk-statement3The100%by2015commitmentcoveredtheuseofbothsustainablepalmoilandpalmkerneloil,butdidnotcoverpalmkernelmeal.Relevantsectorsalsoworkedtoencouragesustainablesourcingofpalmoilfractionsandderivatives.4ItfollowedsimilarstatementsthatweremadeintheNetherlandsandBelgium.ItalsowasalsoprecededbyDavidCameron’sannouncementinApril2012aboutnewmeasurestotackleillegaldeforestationworldwideinpartnershipwiththeGovernmentofIndonesiaandthebusinesscommunity.ThisincludedworkingwithUKbusinessesonsustainabletimberandpalmoilsourcing.TheStatementwasnotabindingpolicy,butavoluntarycommitment.Thecommitmentsandactionsvaried,andsomeorganisationshadalreadycommittedtoonlyusingsustainablepalmoilby2015.Othersmadecommitmentstoexploretheissues,andencourageandsupporttheirmembersintheswitchtosustainablesourcing.Thoseintherenewableenergyindustryhadlegislativerequirementsthatgoverntheiruseofpalmoil.5http://www.euandgvc.nl/documents/publications/2015/december/7/declarations-palm-oil
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ThisreportmeasurestheprogressoftheRoundtableinmeetingtheAmsterdamCommitment.Itwillbepublishedannuallyuntil2020.Itcoverspreviousdatapointsreportedoninthe2012-2015commitmentperiod,andexploresthewiderconsumptionofpalmoilintheUK.Foradetailedaccountoftheevolutionofthereportingmethodology,andthenewmethodologyagreedwiththeRoundtableforthisreport,pleaseseeAnnexes2and3.
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2. OverviewofpalmoilusageintheUK
Figure1ThePalmOilSupplyChain(Source:Efeca2017)
ThisdiagramillustratestheflowofpalmoilandpalmkerneloilintotheUKmarket.Palmoilcomesfromseveralsources.Column1(highlightedinblue)illustratespalmoilrefinedandprocessedbytheUKrefineries,orthemainUKvolumeandthefocusoftheheadlinefiguresofthisreport.SomepalmoilenterstheUKasrefinedoil,ingredientsorinfinishedgoods(bothfoodandnon-food),fromeitherEuropeansources(Column2)orInternationalsources(Column3).Functionalingredientssuchasemulsifiersorbakeryfatsaredeliveredtoconsumergoodsmanufacturers,whilefinishedgoodswilltendtoenterlowerdownthesupplychain.Forexample,theoleochemicalandanimalfeedmarketsplayaroleasprocessors,oftenbuyingfractionsandderivativesofpalmoilandpalmkerneloilfromorigin.InPartAofthisreport,weprovidedataontotalpalmoilusedintheUKthatcomesviaUKrefiners.VolumesforpalmoilenteringtheUKseparatelyfromthemainUKrefiners(Columns1and2)arenotavailableinthisreport.InPartBofthisreport,wemapoutthepotentialuseofpalmoilimporteddirectlythroughEuropeanorinternationalrefiners.Welookatingredients,CGM,andRetail,evaluatingwhatinformationwehaveonvolumesandthemarket,andassessingwhatinformationismissing.WealsolookatBrandvs.OwnBrandforRetailersandCGMtounderstandtheleveragebrandshaveoverCSPOsourcing.InPartDwelookatthreesectorsinmoredetail,tounderstandthechallengesofdatacollection,monitoring,andsustainablesourcing–Oleochemicals,FoodService,andAnimalFeed.Finally,weaddress
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widertrendssuchaszerodeforestationcommitments,andhowtheseimpactpalmoilsourcing.Wealsoproviderecommendations,andincorporatetheresultsofthestakeholdersurvey.QualitativeupdatesfromRTmembersarelistedinAnnex9.
A. PalmOilUsageintheUKviaUKrefinersThissectionlooksatimportsofphysicalcertifiedpalmoilviathemainfourUKrefiners,usingasimilarapproachtothe2012–2015progressreports.SomerefinerswereabletoconfirmthatthefigurestheyprovidedEfecaencompassedfractionsandderivativesofpalmoilthattheyimportandprocessfurtherbeforesellingon.PleaseseeAnnex1forfurtherexplanationofthefractionsandderivativessupplychains.Allconfirmedthattheydonotimportadditionalfractionsandderivatives,selltheseonwithoutprocessingthem,andreportthemseparatelyfromthesalesfigurestheyhaveprovided.Therefore,thefigureswehaveusedforthisreportshouldencompassallrefinercrudeandrefinedoil,aswellasfractionsandderivatives.ThefiguresbelowillustratehowtheusageofCSPOhasdevelopedsince2009.
ImportsofPhysicalCertifiedSustainablePalmOilThefindingsfor2016illustratedinFigure2indicatethatthevolumeofUKpalmoilpurchasessupportedbytheRSPOcertificationmodelsofMassBalance,Segregated,andIdentityPreservedrepresent328,139mt(excludingGreenPalmandderivativesandfinishedgoods),or78%oftotalpalmoilimportstotheUK.Thefigurebelowcompares2016figureswith2009-2015figuresthatdonotincludeGreenPalmcertificatespurchasedbycompaniesinthevolumeofCSPOpurchasedintheUK.WhenGreenPalmisremovedfromtheheadlinefigure,thepercentageofCSPOoftotalUKpalmoilconsumptionin2015equals77%,comparedto78%in2016.
Figure2CertifiedSustainablePalmOilpurchasesintheUKsupportedbyRSPOsupplychainmodels(2016notincludingGreenPalm),fromthe2009baselinefigureinmetrictonnes(Source:EfecaanalysisofUKrefinerydata,2017)
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In2016UKpurchasesofpalmoilsupportedbyMassBalance,Segregated,andIdentityPreservedRSPOcertification(notincludingGreenPalm)haveincreasedby1%since2015(whentotalpurchasesrepresented326,033mt).6Thisisamuchlowerrateofincreasethaninpreviousyears(2014to2015was12%).Howeveroverall,2016UKpurchasesofpalmoilsupportedbyMassBalance,Segregated,andIdentityPreservedRSPOcertification(notincludingGreenPalm)haveincreasedalmostsix-foldsince2009(whentotalpurchasesrepresented55,000mt).
PurchasesofGreenPalmcertificatesIn2016,UKcompaniespurchased84,949mtofGreenPalmcertificates,comparedto131,261mtofpalmoilsupportedbypurchasesbyUKcompaniesin2015.7GreenPalmconsumptiondecreasedfromlastyear,atamuchgreaterratethaninthepreviousyear(by35%from2015to2016,vs.by24%from2014to2015or7%from2013to2014).IfGreenPalmwereincludedinthetotalCSPOfigurebasedonUKrefineryfigures,itwouldrepresentproductionofcertifiedoilequivalentto20%ofUKimportbasedonFEDIOLdata.Thisrepresentsadecreasefrom31%of2015’stotalusage,andisdemonstratedintheFigurebelow.Inpreviousyears,theproportionofMassBalance,SegregatedandIdentityPreservedCSPOgrewmorerapidlythantheuseofGreenPalm.In2016,bothdecreased.IfthetotalpercentageofCSPOincludesGreenPalm,theUKhasachieved98%CSPOsourcing,comparedto108%in2015.
Figure3ProportionofpalmandpalmkerneloilintheUKpurchasedthroughGreenPalmCertificatesandSegregated/MassBalancesupplychainmodels,comparedtototalUKimportsusingFEDIOL(Source:EfecaanalysisofFEDIOLdata,2017)62015totalrefineryfigureswereinrealityslightlydifferent,duetoinaccuratereportingbyonerefinerontotalusageandtotalCSPOusage.Correctfigureshavenowbeensubmittedbytherefiner,butarenotincorporatedhereforthepurposeofcomparisonwithpreviousyears’analysis.PleaseseeAnnex4foranexplanationofthischange.7ThesecompaniesareheadquarteredintheUK.
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TheRoundtableagreedtoremoveGreenPalmpurchasesfromtheheadlinefigureofUKconsumptionduetotheriskofdoublecountingdownthesupplychain(seeAnnex2forfurtherexplanation).Furthermore,manyofthecompaniesheadquarteredintheUKhaveinternationaloperations,andbuyGreenPalmcertificatestocoverthepalmoilusedbytheirinternationaloperations.WeareunabletoaccuratelyallottheportionusedbytheirUKoperations,sothetotalfigureofGreenPalmusageintheUKispotentiallysomewhatskewed.ItisalsoimportanttonotethatinJanuary2017,RSPOdiscontinueditsendorsementofGreenPalmastheserviceproviderofthetradeinBookandClaimcertificates.RSPOcertifiedvolumescannowbesoldviatheBookandClaimmodelontheRSPOPalmTraceplatform.AsofJanuary2017,RSPOallowsBookandClaimcertificatestobeboughtretrospectivelyorspeculatively.ThismeansthatallottingBookandClaimcertificatestoone-yeartimeperiodswillprovedifficultinfutureforthepurposesofreportingintheRoundtable’sAnnualProgressReports.GreenPalmtradingmayhavedecreasedsignificantlyfrom2015to2016duetotheseupcomingchanges,aswellasthegreatertrendtomovetowardsphysicalsupplychainmodels.Inaddition,in2016themajorityofanimalfeedmanufacturersintheUKdecidedtonolongerpurchaseGreenPalmcertificatestocovertheiruseofpalmoilandpalmkerneloil.Overall,thefiguresofCSPOthatenterstheUKthroughthefourmainUKrefinersindicatethatCSPOusagehasstabilizedaround77-78%.Theremaining22%maybecoveredbypurchasesofGreenPalmcertificates,thoughthisrequiresfurtherresearchandverification.ThesewouldnotrepresentphysicalCSPOhowever,andthechallengefortheUKmovingforwardwillbetoclosethisgap.Thereremainsomeobstaclesforingredientsandconsumergoodsmanufacturerstosourcephysicalcertifiedfractionsandderivatives,whichmaymakeupalargepartofthe22%.TheremayalsobeinsufficientdemandforphysicalCSPOfromcertainUKsectorsunwillingtopaythepremiumforCSPOorunawareofthereasonstodoso. NextstepsandrecommendationsforEfeca:
• Forannualmonitoring:expandthedataanalysedtoincludewiderEUandinternationalrefinersworkingwithEUcounterparts,ESPOetc.
• SharelessonsandapproacheswithEUMemberStatesreportingundertheAmsterdamCommitments,toimproveconsistencyindatagatheringandreporting,aimingtofillthegapsinthereportingofUKusage.
• TomovetheUKforwardto100%CSPO,viatherefiners(PartA):Betterunderstandthe22%gapandhowtoclosethegapinsourcing.Assesswhether/whatkindoftechnicalassistanceisrequiredforwhichsectors(seePartB).
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B. PalmOilusageviaNon-UKRefinersTheheadlinefigureforthisreportof78%CSPOpurchasedintheUKdoesnotcoverpalmoilrefinedbynon-UKrefinersthatisfoundiningredientsorfinishedgoods.8Thisoiliscurrentlynotmonitoredortracked,andthusisdifficulttoquantifyaccurately,thoughitdoespossiblyrepresentalargeamountofadditionalusage.PartBexplorestheuseofthispalmoilintheUKcomingviarefinersinEuropeorinternationally(everythingnotcoveredbyPartA),whichisthenusedbyingredientsmanufacturersandconsumergoodsmanufacturerseitherasoil,orinawiderangeofproducts(bothfoodandnon-food)asfractionsandderivatives,orasfinishedgoodsbyretailers.Italsoexploresthecertificationdynamicsamongprivatelabelmanufacturersandmajorbrands,assessingtheirlevelofinfluenceoverproductformulationsandthusthedemandforCSPO.
IngredientsusageamongConsumerGoodsManufacturersandfinishedgoodsusageamongRetailersInordertocomplementwhatweknowisimportedbythemajorrefiners,wehavelookedmorecloselyatmajorpalmoilusingsectorsandwherepossiblereportedinformationonCSPOusagereportedtotheRSPOthroughtheAnnualCommunicationofProgress(ACOP)toprovideasenseofusage.ThisincludesthepurchaseofSegregated,IdentityPreservedandMassBalanceCSPOproducts.BecausetheACOPdatadoesnotdisclosewhethertheusageisimporteddirectlyorpurchasedfromcompaniesintheUK,thesefiguresforfinishedgoodsandingredientsareexcludedfromthemainfindingsforimports,toavoidthesignificantriskofdoublecounting.ThisinformationisvoluntarilyreportedbyRSPOmembers,agroupwhichcurrentlyincludes116ordinarymembers,and272supplychainassociatesintheUK.Therefore,thisdataismerelyanindicatorofusage.Furthermore,theUKACOPdataencompassestheinternationaloperationsofcompaniesheadquarteredintheUK.Insomeinstances,palmoilusagereportedbyaUKcompanyislargerthanwhatisactuallyusedintheUK.Finally,ACOPdataisnotaudited,andmaycontainerrors.
ConsumerGoodsManufacturers58ConsumerGoodsManufacturers(CGMs)reportedtoACOPin2016,of71totalCGMcurrentmembers.Ofthe58thatreported,42arefoodanddrinkmanufacturers.In2016CGMMemberspurchasedapproximately547,778mtofpalmoilsupportedbyRSPOcertification,comparedto558,981metrictonnesin2015.ThispalmoilwasusedinthemanufactureofOwnBrandproducts.48%ofitrepresentedphysicalCSPO,orMassBalance,Segregated,andIdentityPreservedcertified.Ofthetotalamount,4,847mtofcertifiedfractionsandderivativeswerereportedintheACOPbyCGMs.
RetailReportsshowthatbytheendof2015,BritishRetailConsortium(BRC)membersthathadsigneduptotheBetterRetailingClimateinitiative,theAmsterdamCommitment,andtheRSPO)weresourcing100%sustainablepalmoil,89%ofwhichwasphysicallyCSPO,foruseintheirOwnBrand/PrivateLabelproducts.ThisisevidencedbytheAnnualCommunicationsofProgressreportsretailersandotherbusinessesprovidetotheRSPO.In2016,10UKretailersreportedtotheACOP.In2016palmoilsupportedbyRSPOcertification(includingGreenPalm)usedbyUKRSPORetailMemberswasapproximately49,081mt,comparedto55,675mtin2015.95%ofthisusagerepresentedphysicalCSPO,orMassBalance,Segregated
8 i.egoodsthathavecompletedthemanufacturingprocess,buthavenotyetbeensold.
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andIdentityPreservedcertified.Ofthetotalamount,12,997mtofcertifiedfractionsandderivativeswerereportedintheACOPasusedinOwnBrand/PrivateLabelmanufacturebyretailers.
OwnBrandvs.BrandsTheUKretailmarketutilisesalargeproportionofprivatelabelorownbrandmanufacturing.46%ofeverythingsoldintheUKcarriesaretailer’sprivatelabelbrand.ThisisamongthelargestpercentageinEurope–Spainhas50%andSwitzerland52%,withItalyonthelowendat21%.Accordingtoourresearch,allthemajorUKretailershaveRSPOCSPOpolices,coveringthisprivatelabelmanufacturing.Theremaining54%ofretailproductssoldintheUKaremadebycommercialbrands,whicharemanufacturingproductsforsaledirectlyortoretailers.AccordingtoBeyondtheBrands,a2013Oxfamreport,onlyafewlargemultinational(i.e.Mondelez)companiescontrolmostglobalbrands.
Figure4BeyondtheBrands(Source:Oxfam,2013)Manyofthesebrandsincreasinglyhavetheirownpalmoilsourcingpolicies(i.e.Nestle,whoseresponsiblesourcingguidelinesgobeyondRSPO9)basedontraceabilityforverification,butareonlypartiallymanufacturingwithRSPOCSPO.ThequestionshouldbeaskedwhetherthesepoliciesthatarealignedtocertificationstandardsareacceptabletotheAmsterdamcommitment,orwhethertheyarestrongenoughtoessentiallyensure100%CSPOsourcingbyproxy.TheUKretailgrocerymarket(whichincludespersonalcareandcleaningproductsaswellasfood)isperformingwellintermsofCSPOsourcing.Themarketisdominatedby4majorplayersthatrepresent69.2%ofthemarket:(ofthese4players,2reportedtoACOP.)10Intermsofpolicies,92.9%ofUKgroceryretailershaveclearpalmoilsourcingpolicies.11However,7.1%havenocommitmentsandthereforeanyprivatelabelproductstheysellwillnotbemadewithCSPO.Thesetendtobethesmallerretailers,which
10KantarWorldPanel,201711KantarWorldPanel,2017
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haveownlabelproductsthatmaybemanufacturedintheUKorinternationally.Theconversionofthe7.1%willbeimportanttoreachingtrue100%CSPOsourcingintheUK.Mainissuesoutstanding
• Fractionsandderivativesaredifficulttotrackduetothecomplexityoftheirsupplychains.Theyarenotalwaysavailableduetoconstraintsinthesupplychaintoo.TheyareoftenimporteddirectlytomanufacturersasaningredientintheUK,makingitchallengingforthemtobeincludedintheheadlinefiguresforthisreportoftotalUKusage.
• WearecurrentlyunabletoaccuratelytracktheamountofpalmoilinfinishedgoodsthatenterstheUKmarket–ACOPdataisincompleteandthereisnocentraldatabaseofimportscontainingpalmoilorasimplewaytocalculatethepalmoilinspecificproductformulations.
NextstepsforEfeca:
• TheRTshoulddiscusswhatappetitethereistoproduceamorein-depthcalculationofpalmoilinfinishedgoods.Isthisthemosteffectiveapproachtoimprovesourcing?OrshouldwemoveforwardininfluencingEuropeansupplychainstoprovideCSPO,toensurethatwhatcomesinthroughEuropeanmanufacturingiscovered?EfecatofacilitatethisdiscussionatthenextRTmeeting.
• ConsiderevaluatingactionsandreportingbyRetailersandCGM(brandandnonbrand)andassesswhetherwecanuseotherreports(e.g.WWFscorecards)toreportbackonprogressmadeeachyeartowardscompanycommitments.WecanthenuseasthisaproxytoshowthattotalconsumptioninUKismovingtowardsCSPO.
• Produceabriefingpaperonbrandandnon-brand,theimpactonCSPO,anddrivingchange.Formajorbrands,aretheirsourcingpoliciesadequatetoensure100%CSPOsourcing?
• Fromthis,identifyifthereareanyindicatorsthatwecouldusetoreportandmonitorprogressinthesector,towards100%CSPO.Thesecouldbeincorporatedintoourreportingin2018andsharedwithotherAmsterdamCommitmentmembers.
C. SpotlightonOleochemicals,AnimalFeedandFoodServiceAsaresultofourinitialassessmentofpalmoilusageandmonitoringintheUK,thisAPRfocuseson3broadsectorsfacingchallengesinsourcing–Oleochemicals,AnimalFeedandFoodService.Infutureyears,thissectionwillbetailoredtoreflectpertinentissuesamongtheseorothersectors,withfurtherdetailedresearchrelatedtoannualfindings.SectionCdescribesprogressintheoleochemicalsector(cosmeticsandhomecare)wherepalmoil,palmkernelmealand/orfractionsandderivativesmaybeimporteddirectlythroughcomplexsupplychains.ItalsodescribessomeoftheobstaclesinsourcingCSPOfacedbythefoodserviceindustryandtheanimalfeedindustryduetolimitedbuyerinfluenceoversupplychains,andthenon-consumerfacingnatureofthesesectors.
OleochemicalManufacturersManyoleochemical12manufacturersintheUKimportpalmorpalmkerneloil,orfractionsandderivativesforfurtherprocessing,directlyfromproducers,notbuyingmaterialfromthefourmainUKrefiners.Insomecases,thisisbecausetheyareinternationalcompanieswithmanufacturingsitesinothercountries
12Oleochemicalsarechemicalsderivedfromplantandanimalfats,andareanalogoustopetrochemicalsderivedfrompetroleum.Theyhaveadiverserangeofapplications,includinginpersonalcareproductssuchasshampooorshowergel,infoodadditivessuchasemulsifiers,assurfactantsusedinfabricsoftenersandpersonalcleaningproducts,andinpharmaceuticals.Palm-basedoleochemicalsareproducedasby-productsoftherefiningprocess,beforefractionation.
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andestablishedglobalsupplychains,orbecauseitismoreconvenientorlessexpensivetoimportdirectly.WeareunabletocollectthiscommerciallysensitivedatafromcompaniesandthereforeunabletotrackthisusageintheUKforthisreport,thoughanecdotallyweunderstandthatasignificantportionofOleochemicalfractionandderivativesourcingintheUKiscoveredbyMassBalance.Asshowninthefigurebelow,palmoilandpalmkerneloilcanbeusedtoproduceanextensiverangeofoleochemicals.Thecomplexityofthepalmoilsupplychain,intermsoffractionationandthedemandforfractions,presentsakeyobstacletosomecompaniessourcing100%certifiedinputforoleochemicalmanufacture(seefigurebelow).
Figure5-Oleochemicalderivativesproduction(Source:RSPO,2015)Inthe2011Defrareport,cleaning,personalcare,cosmeticsandindustrialuseswereestimatedtoconsumeabout10%oftheUKtotalofpalmoilusage,mostlyintheformofoleochemicalderivatives.Thefoodsectorwasestimatedtoconsumeabout68%oftheUKtotal(435,000mt).13Becausetheextenttowhichpalmbasedoleochemicalsareconsumedbythesesectorsisnotfullytrackedandtheoriginalfeedstockoftheoleochemicalsisnotalwaysknown(butexpectedtobepalmkerneloilinmostcases),thisestimateshouldbetreatedwithcaution.Nevertheless,itshowshowprevalentpalm-basedoleochemicalsareincleaning,personalcare,cosmetics,andfoodproductmanufactureintheUK.Intermsoffoodanddrinkmanufacture,itisalsonotalwayspossibletodisaggregatebetweenproductsmanufacturedintheUKandfinishedproductscontainingpalmoilthatareimportedandsoldontheUKmarket(seethesectiononCGMabove).Amongthetop6oleochemicalmanufacturersintheUKaslistedinthe2011Defrareport,thereisavaryingdegreeofengagementwithsupplychaincertificationandthereforetheuseofcertifiedmaterial.Theoleochemicalsectorisabletosourcesomecertifiedfeedstock,frequentlyintheformofMassBalancecertified.Ofthetopsix,fivehaveachievedRSPOsupplychaincertificationforallorsomeoftheirmanufacturingsites.Twohaveachievedsupplychaincertificationforallsites,andoneisworkingtowardsusingallcertifiedpalmoilinproductsby2020.Onehasnopalmoilinitiatives.
13 http://randd.defra.gov.uk/Document.aspx?Document=EV0459_10154_FRA.pdf
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IntermsofbuyersofoleochemicalsmanufacturedintheUK,severalmajorindustryplayersinthepersonalcareandcleaningproductindustrieshavebegunworkingwiththeirsuppliersandmanufacturerstoidentitythesourcesandencouragesustainableproduction,withsomeevenestablishingverticallyintegratedsupplychainsthatcansourcesegregatedmaterialforoleochemicalproduction.Mainissuesoutstanding
• Lackofcleardataonpalmoil/palmkerneloilderivativeandfractionusebytheUKOleochemicalindustryduetocomplexsupplychainsandlackofmonitoring.
NextstepsforEfeca:
• Toimproveontheclarityofpalmoil/palmkerneloilderivativeandfractionusebytheUKOleochemicalindustryduetocomplexsupplychains,workwithOleochemicalmanufacturerstoscopeoutsupplychainintheUK.
• AbriefingpaperexploringinfurtherdetailtheusageofpalmfractionandderivativesbythemainOleochemicalmanufacturersintheUKtobepresentedatthenextRTmeeting.
• Fromthis,identifyifthereareanyindicatorsthatwecouldusetoreportandmonitorprogressinthesector,towards100%CSPO.Thesecouldbeincorporatedintoourreportingin2018andsharedwithotherAmsterdamCommitmentmembers.
AnimalFeedUnfortunately,reliabledataonthecurrentuptakeofSegregatedandMassBalanceCSPOacrosstheanimalfeedsectorisnotavailable.In2014anumberofcompaniesrepresentedonAgriculturalIndustriesConfederation(AIC)feedsectorcommitteescommittedtousingsustainablepalmoilthroughthepurchaseofGreenPalmcertificatesviatheBookandClaimscheme.InthemajorityofcasesthisisachievedbyaskingfatblendsupplierstopurchaseGreenPalmcertificatestocoverthevolumeofpalmoilintheproductsthatanimalfeedmanufacturerspurchasefromthem.In2015theuseofsustainablepalmoilbytheindustrywasestimatedtoexceed75%.In2016themajorityofanimalfeedmanufacturersintheUKdecidedtonolongerpurchaseGreenPalmcertificatestocovertheiruseofpalmoilandpalmkerneloil,astheyareunabletopassdowntheGreenPalmclaimandsellcertifiedproducttotheircustomers.Thecurrentchallengeisstillaroundthelackoffocusonpalmoil,whichmakesupaverysmallproportionoftheproductsusedbytheindustry(estimatedataround0.33%).Thisisexacerbatedbythefactthatmanyfeedmanufacturerspurchaseablendedoilwhichreducesthevisibilityofthepalmoilitself.WealsoknowfrominterviewswithfeedcompaniesthatsomeoilisimporteddirectlytomanufacturersfromEuropeansuppliers,andisnotincludedintherefineryfiguresoftotalimports,possiblyduetoconvenienceandprice.Theanimalfeedsectorisalsoalargeuserofpalmkernelmeal,whichisnotincludedintheheadlinefiguresinthisreportonpalmoilandpalmkerneloilusage.ImportsofpalmkernelmealintheUKaccountedfor455,000mtin2016,comparedto382,000in2015,and663,300mtin2009,accordingtoFEDIOLdata.AccordingtotheDefrareport(2011),in2009over80%oftheimportedpalmkernelmealwasusedforanimalfeed,withtheremaining20%goingintoelectricitygeneration.In2016nopalmkernelmealwasreportedtoOfgemasusedinelectricitygeneration,14butitisunclearhowmuchpalmkernelmealwasusedbytheanimalfeedsector.Nevertheless,itiscertainthatthissignificantvolumeofpalmkernelmealwillhavesustainabilityimpactsthatshouldbeaddressedinfuturework.Mainissuesoutstanding
• LackofunderstandingonhowpalmoilandpalmkerneloilisconsumedintheUKbytheanimalfeedsector;
14https://www.ofgem.gov.uk/publications-and-updates/biomass-sustainability-dataset-2015-16
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• LackofdemandfromanimalfeedbuyersforCSPOingredientsinfeedduetosmallvolumesinformulationsandnon-consumerfacingnatureofproduct;
• InabilitytopassB&Cclaimsdownthesupplychainwhentherestofsupplychainisnotmotivatedtoseesupplychainaccreditation(duetonon-consumerfacingnature);and
• LackofinformationonhowpalmkernelmealisconsumedintheUK.NextstepsforEfeca:
• DiscusswithRSPOandAIChowtore-engagetheanimalfeedsector.• FurtherresearchamongthetopanimalfeedmanufacturersintheUKundertakentounderstand
thescopeofthepalmoil/palmkernelmealusedbytheindustry,aswellashowtore-engageonsourcingCSPO.
• WorkwiththeanimalfeedsectortoidentifyindicatorsthatcouldbeusedtoreportandmonitorchangeandpotentiallysharewithotherAmsterdamCommitmentmembersacrossEurope.Abriefingnotewillbeproduced.
FoodserviceindustryThereareover400,000retailandfoodservicebusinessesacrosstheUK,fromindependentconveniencestorestofarmshops,hotels,schools,restaurantsandstaffcanteens.15Theserviceindustryincludesrestaurants,pubsandhotelsaswellasprovisionoffacilitiesmanagement(FM),contractcateringandcleaningtothepublicandprivatesectorestate.ThekeyplayersintheserviceindustryaretheFMprovidersandthewholesaledelivereddistributionnetwork.Foodservicecompaniessourcebothcleaningandfoodproductsthatcontainpalmoilintheiringredients.Accordingtothe2011Defrareport,thefoodserviceindustryaccountedforaround150,000mtofpalmoiluse.Ofthis,itwasestimatedthat30-50%quantitiesofpalmoilcouldbeattributedtothepublicsector,equivalentto45,000-75,000mtofpalmoil.Thisrepresented7%-12%ofthetotalimportofpalmoilandpalmkerneloilintotheUKin2009.ThefoodserviceindustrycurrentlylagsbehindretailintermsofCSPOusage.A2016GAINreportrecentlyrankedthetop15foodservicecompaniesintheUK.16Ofthese,10arenotRSPOmembers,4outof15havenopalmoilpolicyatall,and6haveissuedapalmoilstatementthatisnotverifiedanddoesnotensuretheuseofsustainablepalmoil.AccordingtotheBusinessServicesAssociation,apolicyandresearchorganisationwhosemembersincludebusinessservicescompaniesinvolvedinthecontractcateringandhospitalitysectors,themainissuecontractcaterersfaceastheyendeavourtomovetowards100%sourcingofsustainablepalmoilisthecomplexityofsupplychainsand,therefore,thetraceabilityofingredients,particularlywhentheyareacomponentpartofproducts.ManyBSAmembersoperateglobally,withtensofthousandsofclientlocations,andassuchhavedevelopedmulti-tieredsupplychains,ofteninvolvingasignificantnumberofSME’s.Itisalsoimportanttonotethatunlikeretailers,BSAmembersdonotmanufactureanyproductsorhaveanyownlabelproductsanddonotpurchasepalmoilproductsdirectly.Thismeansthatwhilsttheycanhelptoinfluencetheproductspecificationsthattheypurchasefromsuppliers,theydonothavedirectcontroloftheircomposition/ingredientssourcing.Furthermore,duetothenon-consumerfacingnatureof
15http://www.fwd.co.uk/content/8/Size-and-scale/16https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20Service%20-%20Hotel%20Restaurant%20Institutional_London_United%20Kingdom_12-13-2016.pdf
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keyplayersinthesector(FMandwholesaledistributors),thereisalackofdemandforCSPOduetothepremiumsattached.Intermsofgovernmentfoodservicecustomers,theGovernmentamendedtheGovernmentBuyingStandard(GBS)forfoodandcateringin2012toincludeanewrequirementaboutsourcingsustainablepalmoil,palmkerneloilandderivatives.Atargetof2015wassetfor100%sustainablepalmoil(withthefourRSPOcertificationmodelsbeingproposedasoneformofevidencethatcanbeusedindemonstratingcompliance).UptakeoftheFoodandCateringGovernmentBuyingStandardvariesacrosscentralGovernmentintheUK.Itisnotmandatoryfortwoofthebiggestfoodservicepublicsectors:healthandeducation.Itisalsonotmandatoryforoverseasdefenceoperations.Mainissuesoutstanding
• LackofvisibilityamongsectoranddemandforCSPOduetonon-consumerfacingnatureofsector;• Lackofcontrolfromfoodservicecompanies,astheydonotmanufactureproducts;• LargenumberofSME’sinsectorwithlowresources/knowledgeonresponsiblesourcing;and• LackofpublicsectorCSPOsourcingforfoodservice.
NextstepsforEfeca:
• EfecawillbeholdingaseminarformembersoftheSRA,FDF,andBSAonsourcingCSPOandhowtoinfluencethesupplychainforfoodservicecompaniesinJanuary.Efecacandevelopresourcesforcompanies,withafocusonSME’s,followingthisseminar,oncesupportareasofneedareidentifiedthroughtheseminar.
• Abriefingpaperwillbepreparedlookinginmoredetailattheissuesfacedbythefoodservicesector.ThispaperwillidentifywheretechnicalassistancecanbeprovidedandwhatindicatorscanbeusedinthereporttomonitorandreportonprogressandpotentiallysharewithotherAmsterdamCommitmentmembersacrossEurope.
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3. Conclusionsandnextsteps
HeadlinefiguresSincethe2009baseline,theoverallvolumeandtheproportionofUKpalmoilimportssupportedbyRSPOsupplychainmodelshasincreasedalmostsixfold.AccordingtoFEDIOLfigures,thevolumeaccountedforbyimportsofIdentityPreserved,SegregatedandMassBalanceCSPOtotals328,139mt(excludingGreenPalmandderivativesandfinishedgoods),or78%oftotalpalmoilimportstotheUK.GreenPalmpurchasesreducedby35%fromlastyear,likelyduetoJanuary2017changesintheBook&Claimsystem,andthegreatertrendtomovetowardsphysicalCSPOsourcing.Whilethisheadlinefiguredemonstratesasignificantimprovementonthe2009baseline,italsodemonstratesthatworkremainstobedoneonreaching100%sourcing.Theremaining22%ofconventionalpalmoilindicatesthatsomesectorsarenotsourcingenoughCSPOorpossiblynotreportingonwhattheyarebuying.ItisrecommendedtoundertakeaformalassessmentwithRTmembersoftechnicalassistancerequiredformemberstopromote100%sourcing.Stakeholdersconfirmedthatthiswouldbehelpfulintheirresponsestothestakeholdersurvey,listedinAnnex8.Intermsofthebroadercontext,itisinterestingtonotethatUKrefinersuse1.89%oftotalCSPOproductionof62milliontonnes.Whilethisrepresentsasmallamountoftotalconsumption,itremainsimportantthattheUKmaintainitsleadershiproleinCSPOsourcing,drivingchangeamongEuropeanconsumers,aswellassharingknowledgewithwiderpartnersingrowercountries.
Palmoilusagevianon-UKrefiners/manufacturersItisdifficulttotrackpalmoilimportedintotheUKintheformoffinishedgoods,orimporteddirectlyasingredientstomanufacturers.Theoleochemical,animalfeedandfoodservicesectorsareallimportantusersofingredientsandfinishedgoods.Somepalmoilfractionsandderivativescometooleochemicalmanufacturersdirectlyfromnon-UKrefinersandsomepalmkernelmealgoesdirectlytoanimalfeedmanufacturers.ACOPfiguresprovideanindicationofpalmoilthattheCGMandRetailsectorsbuyintheformofcertifiedoilandgoods,aswellasfractionsandderivatives,butthedatahaslimitationstoitsincompletenatureandtheriskofdoublecountingbetweenCGMandRetail.AnalysisshowshowinfluentialOwn-BrandorprivatelabelmanufacturingisintheUK–thisislargelycoveredbyCSPOpoliciesforfoodandnon-food.Majorbrands,representingwhat54%oftheretailsectorsells,areshowingatrendtocreatetheirownresponsiblesourcingpoliciesandnotengagewithRSPO.Thefoodserviceindustryislaggingbehindpossiblyduetoalackofvisibilityofingredientsandthenon-consumerfacingnatureofthebusiness,similartotheanimalfeedindustry.Itwouldbehelpfultoassesstheoleochemical,animalfeedandfoodserviceindustriestounderstandinmoredetailthesupplychains,improvemonitoring,andaddressissuesinsourcing.Followingthis,itisrecommendedthatEfecaworkwitheachsectortodevelopindicatorsthatwouldbeusedintheannualmonitoringandreporting,perhapsbasedonproxymeasuresifexactdataisnotavailable.TheRTcouldthensharethesewithEUAmsterdamCommitmentcounterparts.Again,stakeholdersconfirmedthatthiswouldbehelpfulintheirresponsestothestakeholdersurvey,listedinAnnex8.
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WiderdeforestationcommitmentsWiderzerodeforestationgoalsthatcoverahostofforestcommoditiesandsocialissuesaregrowinginnumberamongcompaniesandorganisations,possiblydrivenbytheNewYorkDeclarationonForestsforexample.ThisisalsolinkedtothewiderAmsterdamDeclarationwhichaimstoimprovesustainablesourcingofrelatedforestcommoditiesbeyondpalmoil(soya,cocoa).Becauseofthesecommitments,manycompaniesarecreatingcomprehensivesourcingpoliciesthatinsomeinstancesgobeyondtherequirementsofRSPOcertification,focusingissuessuchasforcedlabourorpeatlandburning,orrequiringtraceabilitytomills.ThistrendhasbeenencouragedbyRSPOitself,withtheRSPONextcertification.IthasbeenreportedattherecentRTmeetingthatsomebuyers,intheirdesiretomovebeyond,areunderminingthedemandforRSPOwiththeserequirements.Asaresult,itisrecommendedthatEfecaexploreothermonitoringprotocols(e.g.TRASE,WWFscorecards)thatlinktowiderdeforestationgoals,andevaluatewhetherthesealignwithAmsterdamCommitmentgoals,andhowtheycouldbeconnectedtotheAPRreportingfortheUK.Asafirststep,abriefingpaperontheimpactofwiderdeforestationgoalsandtraceabilitypoliciestosharewithRTatthenextmeetinginMarch/Aprilwillbeproduced.ItmayalsobebeneficialtolookatdemandsfortraceabilitytomillandtheimpactofUKCSPOusageonthegroundincountriesoforigin.ThiscouldbelinkedwithwiderprogrammessuchastheUNDPplatforminIndonesia,andanareaofcollaborationwithotherEUAmsterdamCommitmentmembers.ThiswillbefurtherexploredandEfecawillreportbackintheMarch/AprilRTmeeting.TheUKRoundtableonSourcingSustainablePalmOilcanmakeanimportantcontributiontotheeffortsoftheprivatesectoracrossEuropetoremovedeforestationfromtheirsupplychains,andtoensurefullysustainablepalmoilsupplychainsby2020.ItwillreportannuallyonprogressintheUK,andworkwithothersignatoriestotheCommitmenttoSupportonincreasingtheuptakeofsustainablepalmoil.MeasuringpalmoilimportedintheUKinfinishedgoodsandensuringitssustainability,switchingto100%physicalCSPOusage,andworkingwithinternationalpartnersonincreasingthenumberofglobalCSPOsupplychainsareimportantnextsteps.
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Annex1. FractionsandDerivativesSupplyChainThisAnnexprovidessomebackgroundonfractionsandderivatives,inordertoillustratehowthesupplychainworksandwhysourcingsustainablefractionsandderivativescanbechallenging.Palmoilandpalmkerneloilarecomplexduetotheversatilitygainedfromthelargenumberoffractionsandderivativesthatcanbeproduced.Infact,about60%ofthepalmoilandpalmkerneloilconsumedgloballyisintheformoffractionssuchasoleinandstearin.Thesupplychainsforthesederivativesaremulti-layeredandhavebeenhistoricallydifficulttotrace.The2011Defrapublishedreportestimated435,000MToffractionandderivativeusageintheUK.ItwasnotalwayspossibletodisaggregatebetweenproductsmanufacturedintheUKandfinishedproductscontainingpalmoilthatareimportedandsoldontheUKmarket,butthisdoesgiveanindicationoftotalusage.Topsectorsusingfractionsandderivativesincludedfoodanddrink,personalcare,cleaningproducts,andindustrialmanufacturing.17ItisextremelydifficulttoobtainaccuratedataontheamountofpalmoilimporteddirectlyintotheUKintheformofderivativesandfractions,asthisinformationiscommerciallysensitiveforsomecompaniesandnotpubliclyreported.Furthermore,althoughtraceabilityisimproving,thederivativescanalsobechallengingtosourceassustainable,duetotherestraintsofthesupplychain.First,becausethecertifiedsustainablecostpremiummustapplytotheoriginalfeedstockandthenbecarriedfromderivativetoderivative,theimpetusforallfacilitiesalongthederivativechaintobecomecertifiedisnotalwayspresent.Thisappliestoallpartieswithinthesupplychain,whethermanufacturersofbrandorprivatelabelorthemanyothermanufacturersupstreamsupplyingarangeofingredientswithderivatives.Someareunwillingtobearthecostofcertificationduetocostimplications–especiallywhenthevolumeofapalmderivativeinproductsisverylow.Second,becausefractionationresultsinunequalratiosoffractions(i.e.4:1oleinvs.stearin),certainderivativesofthesefractionsaremoredifficulttosource.Inorderfor1tonneofcertifiedstearintoexist,4timestheamountofcertifiedoleinmustbeproduced.Furthermore,palmkerneloilhasamorecomplexsupplybasethanpalmoil.Thekernelsaresenttocrushingfacilities(asopposedtoprocessedbythepalmoilmillsthatproducepalmoilfromthepalmoilfruit)wheretheycanbemixedwithuncertifiedpalmkernel.Atpresent,onlysomeofthesefacilitiesareRSPOcertified.Again,becausethecertifiedsustainablecostpremiummustapplytotheoriginalfeedstockandthenbecarriedfromderivativetoderivative,theimpetusforcrushingfacilitiestobecomecertifiedisnotalwayspresent.Finally,majorbuyersdonotbuyfractionsorderivativesbutfinishedingredientscontainingthem.Theymaynothaveaccesstoinformationaboutthefeedstockoriginofthederivativestheybuy.Thederivativescanvaryandbereplacedbyotherplant-basedoilsandfats(i.e.fromcoconut),dependingonmarketprice.Therefore,theyareoftennottracked.
17http://randd.defra.gov.uk/Document.aspx?Document=EV0459_10154_FRA.pdf
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Annex2. DevelopmentofMethodology
TheEvolutionofReportingFrom2012-2016,theUKRoundtablereportedontheconsumptionofsustainablepalmoilintheUKannually,andmetbi-annuallytogiveupdatesontradesectorprogressanddiscussanyissueswithsourcing.ReportingwascompletedbytheCentralPointofExpertise(CPET),18abodywhichprovidedadvice,supportandcommunicationontheGovernment’sTimberProcurementPolicy(TPP),palmoilandsustainablewoodfuelsourcing.CPETprovidedfourannualupdatestotheUKgovernmentonprogresstowardsitsgoalto100%sourcecrediblycertifiedsustainablepalmoilproductsby2015throughtheAnnualConsumptionofSustainablePalmOilReport,basedona2009baseline.19Theresultsofthe2015commitmentperiodaredocumentedinthe4thAnnualConsumptionReport(ACR).TheyshowthattheUKperformedwellintheperiod2012to2015,withfiguresshowingeither87%or108%sourcingofCSPObyendof2015,dependingonwhichsetofbaselinesfiguresareused.
PreviousApproachCPET’sACRanalysisbuiltonthemethodologyusedtoobtainestimatesofUKsustainablepalmoilconsumptionintheDefraresearchreport(2011)‘MappingandUnderstandingtheUKPalmOilSupplyChain(EV0459)’.Thatreportestimated643,400MTofpalmoilwasimportedin2009includingPalmOil(PO)andPalmKernelOil(PKO),andincludingdirectfractions,oleinstearinandpalmfattyaciddistillate.The2009importfiguresweredevelopedusingtradedata.VolumesofPOandPKOimportedintotheUKwereusedintheDefraresearchreport(2011)asareliableindicatorofconsumptionintheUKmarketandconsequentlywereusedforall4ACR’scompletedbyCPET.Importsoffinishedproducts,derivatives,oleochemicalsandPalmKernelMeal(PKM)wereexcludedfromthe2009estimate.Consequently,toensurethatthe2009estimatecouldbeusedasabaseline,theestimateofCSPOinthe2012-2016CPETACR’salsoexcludedPKM,importsoffinishedproducts,oleochemicalsandderivatives.BasedontheDefraresearchreport(2011),UKpalmoilpurchasessupportedbyRSPOcertificationincludedIdentityPreserved,SegregatedandMassBalanceCertifiedSustainablePalmOilproductsandGreenPalm’sBookandClaimsystem.ThevolumeofpalmoilsupportedbyRSPOsupplychainmodelswasestimatedbycollatingthesubmissionsofdatagenerouslyprovidedfromGreenPalm,UKrefinerieswiththehelpoftheSeedCrushersandOilProcessorsAssociation(SCOPA),togetherwithdatafromRSPO’sAnnualCommunicationofProgress(ACOP)20.ThiswasusedtoestimatetheproportionofPOandPKOimportsaccountedforbySegregatedandMassBalanceCSPOandpurchaseofGreenPalmcertificatesbyUKcompanies.AfurtherdescriptionoftheACRMethodology(2012–2016)canbefoundinAnnex1ofthe2012-2016ACR’s.21
FEDIOLvs.OilWorldIntheACRreports,thetotalvolumesofUKimportsandsalesofPOandPKOweregatheredfromtwodatasources,FEDIOLandOilWorld,fortheyears2009,2010,2011,2012,2013,2014and2015,as
18 CPETwascontractuallymanagedbyLTSandtechnicallyrunbyEfeca. 19AllpreviousAnnualConsumptionReportsonSustainablePalmOil(ACRs)intheUKcanbefoundhere:http://www.efeca.com/our-work/resources/cpet-resources-palmoil/20http://www.rspo.org/en/annual_communications_of_progress21AllpreviousAnnualConsumptionReportsonSustainablePalmOil(ACRs)intheUKcanbefoundhere:http://www.efeca.com/our-work/resources/cpet-resources-palmoil/
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intheoriginalDefraresearchreport(2011)‘MappingandUnderstandingtheUKPalmOilSupplyChain’.Between2012-2016,CPETandtheRoundtablehadseveraldiscussionswithDefraaboutchangingthemethodologytoonlyuseonebaselinefiguresource.Thestakeholdergroupneverreachedaconsensusonwhichfiguretouse,andpresentingbothbaselinesshowedarangeinresults,whichwasconsideredvaluable,sotheACRcontinuedtousebothsourcesuntilthefinal2015report.Intermsofthedifferencebetweenthedatasets,bothFEDIOLandOilWorldusetradedatafromEUROSTAT,takingintoaccountthesametarifflinesforpalmoilandpalmkerneloil.EUROSTATreliesuponsubmissionsoftradedatafromindividualcountries.FEDIOLusesEUROSTATdata,withoutanyfurtherrevision,althoughitcollectstheEUROSTATdatalaterintheyearonceithasbeenrefined.OilWorldontheotherhandusestradeintelligencetorefinetheirestimatesofPOandPKOdataincludingimportsintotheUK.
IssueswiththeACRmethodologyAsthe108%CSPOsourcingfigurebasedonFEDIOLtradedataindicatedin2015,thereweresomelimitationsintheACRanalysis,duetoissueswithdataaccuracyandcompleteness.First,thebaselinedatausedfromOilWorldandFEDIOLmayonlyberelieduponasbestestimates.ThetonnageofUKconventionalpalmoilconsumptioncouldbeunderoroverestimated.FEDIOLhasestimatedalowerimportofpalmoilintotheUKthanOilWorldandreliesontheaccuracyofindividualcountriescustomsdata,andaccuracyandmethodologymayvaryamongreportingcountries.22OilWorldontheotherhandattemptstoaccountforthisdiscrepancybytriangulatingwithmarketintelligence,butcannotclaim100%accuracyeither.IfUKconsumptionofconventionalpalmoilbasedontradefiguresisunderestimated,thiscouldleadtoafigureofgreaterthan100%CSPOintheUK.23WhilstthiscouldbethecaseforFEDIOLdata,itshouldbenotedthatinthestakeholdersurvey,50%ofrespondents,severalofwhomrepresentindustryexperts,preferredtheFEDIOLestimate.Second,becausethepercentagesofsustainablepalmoilarebasedonbothrefinerysalesfiguresofsustainablepalmoil,inadditiontothepurchaseofGreenPalmcertificatesbyUKcompanies,thereisapotentiallysmallriskthatdoublecountingmayoccur,contributingtoanoverestimationofCSPOintheUK.ThisisbecausesomephysicalCSPOproductsmaybesoldintheUKasconventionalpalmoilproductsanddownstreamsupplychainbuyersofprocessedproductsmaybeunawareofupstreamclaimsandpurchaseGreenPalmcertificatestocovertheirpalmoilconsumption.Nodataisavailabletoestimatetheriskofdoublecounting,althoughindustryexpertshaveindicatedtheyfeeltheriskislow.Furthermore,theanalysisdidnotaccountforpalmoilimportedandconsumedintheUKdownstreamintheformoffinishedgoodsandderivatives.Dataonthesevolumesisextremely
22EurostatDataQualityissuesarediscussedhere:http://ec.europa.eu/eurostat/statistics-explained/index.php/International_trade_statistics_-_background23In2015,theFEDIOLfiguresofhowmuchconventionalpalmoilwasimportedintotheUKwereactuallylowerthanthevolumesofconventionalpalmoilreportedtobeimportedbythefourmainrefinersthatcontributeddata.(Volumesofconventionalpalmoilsoldbyrefinersarenotpublishedinthisreport,astheyarecommerciallysensitive,buthavebeenusedtocalculatetheheadlinefigures.)Thismeansthateithersomeadditionalpalmoilwasimportedbytherefiners,butnotreportedinthetotaltheyhavesharedforthe2015AnnualConsumptionReport(whichisunlikely),or,thattheFEDIOLfigureswereunderestimated.ItismorelikelythattheFEDIOLfigureswerefundamentallyunderestimated,anddidnotcaptureallpalmoilimportedbythefourmainrefinersortrulyreflecttheUKmarket.ThisfurtherunderlinestheinaccuracyoftheresultingfigureofthepercentageofCSPOusedintheUKin2015.
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difficulttotrackandobtain,andsowhatmaybeaconsiderablevolumeofpalmoilconsumedintheUKinimportedfinishedgoodswasleftoutofthemeasurement.Afurtherdiscussionofthelimitationsofthe2012-2016analysesmethodologyandthedatacollectedcanbefoundinAnnex1ofthe2015ACR.InresponsetoCPET’sannualstakeholdersurvey,aspartoftheACRreportingprocess,somestakeholdersexpresseddissatisfactionwiththeACRmeasurements,andfeltthatsustainablepalmoilusewasnottrulyat100%whentakingtheincompletenessintoaccount.
NewApproachAfterconsultationwithstakeholders,thisAnnualProgressReport,whilebuildingonpreviousACR’s,takesanewapproachtomeasuringandanalysingdataonUKconsumptionofsustainablepalmoil.
BaselineDataForthiscommitmentperiod,theRoundtableagreedtouseFEDIOLfortheheadlinefigure,andreporttheOilWorldbaselineinAnnex4tothisreport.ThiswasagreedbecauseitwasconsideredvaluabletoalignwiththeotherEuropeanPalmOilAlliances,whicharereportingintotheAmsterdamCommitmentSecretariatusingEurostattradedata.
GreenPalmPreviousanalysesfocusedonUKpalmoilpurchasessupportedbyRSPOcertification,includingtheimportandsaleofSegregatedandMassBalanceCSPO(excludingderivativesandfinishedgoods)byUKrefinersandthepurchaseofGreenPalmcertificatesintheUK,asthecentralfigureindicatingsustainableconsumptionofpalmoilfortheUK.Giventhehighlycomplexnatureofpalmoilsupplychainsandtheriskofsignificantdoublecountingofsustainablepalmoilclaims,thisanalysispresentsGreenPalmseparately,notincorporatingthemintoheadlinefigures.
FinishedGoodsandPalmKernelMealPreviousanalysesalsoattemptedtoillustrateprogressinthefinishedgoodsandbiofuelssectorsandprovidesomecommentaryontheconsumptionofpalmkernelmeal.Wecontinuetoreportonfinishedgoodsseparately,outliningsomeanalysisforkeypalmoilusingsectorsbelow.Wealsocontinuetoprovidecommentaryontheconsumptionofpalmkernelmeal.BecausebiofuelsuseintheUKhasnotencompassedanypalmoilconsumptionforthepast5years,wenowlistthesefiguresinAnnex5.Thisreport’sanalysisontheoleochemical,retail,animalfeed,andfoodservicesectorsalsocoversissueswithtrackingandmeasuringpalmoilderivativesandfractions.Efecahassentamodifiedquestionnairetoallstakeholders,basedonthisnewreportstructureanddraftdataresults.ResultsarelistedinAnnex8andreferredtothroughoutthereport.EfecahasalsocollectedqualitativeupdatesfromRoundtablemembers.Notallmembersrespondedwithupdates,butthosethatdidarelistedinAnnex9.
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Annex3. 2016MethodologyThisAnnexdescribesindetailhowthetotalofUKsustainablepalmandpalmkerneloil,asapercentagetotaloftotalUKconsumptionwascalculated.ThisanalysisbuildsonthemethodologyusedtoobtainestimatesofUKsustainablepalmoilconsumptionintheDefraresearchreport(2011)‘MappingandUnderstandingtheUKPalmOilSupplyChain(EV0459)’,undertakenbyProforest,andthemethodologyofpreviousAnnualConsumptionReports(ACR’s)preparedbyCPETfrom2012–2015.Theinitial2011Defrareportestimated643,400mtofpalmoilimportedin2009includingPOandPKO,includingdirectfractions,oleinandstearinandpalmfattyaciddistillate.These2009importfiguresweredevelopedusingtradedata.Importsoffinishedproducts,derivatives,oleochemicalsandPKMwereexcludedfromthe2009estimate.The2012–2015ACR’susedthesamemethodology.Consequently,toensurethatthe2009estimatecanbeusedasabaseline,andacomparisoncanbemadewiththe2012–2015figures,thisstudyalsoexcludedimportsoffinishedproducts,oleochemicalsandderivativesfromtheimportfigures.Wehaveincludedadditionalinformationonimportedfinishedproducts,derivativesandfractions,andvariouspalmoilusingsectorsundersection2.
EstimatingUKconsumptionofsustainablepalmoilandpalmkerneloilThehighlycomplexnatureofpalmoil(PO)andpalmkerneloil(PKO)supplychainsmeansthatitisnotcurrentlypossibletodevelopareliableindicatoroftotalpalmoiluseintheUK,includingPOandPKOfoundinfinishedgoods.However,volumesofPOandPKOimportedintotheUKwereusedintheDefraresearchreport(2011)andthesubsequentAnnualConsumptionReports(2012-2015)asareliableindicatorofconsumptionintheUKmarketandconsequentlyhavealsobeenusedforthisAnnualProgressReport(APR).Previously,CPETincludedUKpalmoilpurchasessupportedbyRSPOcertificationincludingIdentityPreserved,SegregatedandMassBalanceCertifiedSustainablePalmOilproductsaswellasGreenPalm’sBookandClaimsysteminthecalculationsfortheACR’sfrom2012-2015(basedonthe2011Defraresearchreport).Asagreedin2016bytheRoundtableonSourcingSustainablePalmOil,astakeholdergroupofindustryassociationsandNGO’s,thisAPRreportsGreenPalmusageasseparatefromtheheadlinefigure.
ImportsofsustainablePOandPKOTotalvolumesofUKimportsandsalesofPOandPKOhavebeengatheredfromtwodatasources,FEDIOLandOilWorld,fortheyears2009,2010,2011,2012,2013,2014,2015and2016.BothFEDIOLandOilWorldusetradedatafromEUROSTAT,takingintoaccountthesametarifflinesforpalmoilandpalmkerneloil.EUROSTATreliesuponsubmissionsoftradedatafromindividualcountries.FEDIOLusesEUROSTATdata,withoutanyfurtherrevision,althoughitcollectstheEUROSTATdatalaterintheyearonceithasbeenrefined.OilWorldontheotherhandusestradeintelligencetorefine
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theirestimatesofPOandPKOdataincludingimportsintotheUK.Previously,twoscenariosweredevelopedtoreflectthedifferentdatasets.24AsagreedbytheRoundtableonSourcingSustainablePalmOil,astakeholdergroupofindustryassociationsandNGO’s,thisAPRwillreportoneheadlinefigurebasedontheFEDIOLbaselinedata.ThefigureresultingfromtheuseoftheOilWorlddataislistedinAnnex4.ThiswasdecidedbecausestakeholderswantedtoalignwithEurostatdataasmuchaspossible,inordertomirrorwhatotherEuropeancountriesaremeasuring.ThevolumeofpalmoilsupportedbyRSPOsupplychainmodelswasestimatedbycollatingthesubmissionsofdatagenerouslyprovidedfromUKrefinerieswiththehelpoftheSeedCrushersandOilProcessorsAssociation(SCOPA).ThiswasusedtoestimatetheproportionofPOandPKOimportsaccountedforbyMassBalance,SegregatedandIdentityPreservedCSPO.
ConsumptionofPalmKernelMealTotalvolumesofUKimportsofPKMhavebeengatheredfromtwodatasources,FEDIOLandOilWorld,fortheyears2009,2010,2011,2012,2013,2014,2015and2016.FEDIOLfigureshavebeenlistedinthemainbodyofthereportfor2016,withOilWorldfigureslistedinAnnex4.
ConsumptionofsustainablePOandPKObyConsumerGoodsManufacturersandRetailersVolumesofPOandPKOreportedintheRSPOACOP2015-16wereusedtoanalyseUKRSPORetailandConsumerGoodsManufacturersMemberssustainablepalmoilconsumptionintheSectorsectionslistedunderSection2,PartC.25ThiswasdonebycollatingtheRSPOACOPdataforvolumesof‘RSPOcertified’palmoilinmetrictonnes(whichincludesSegregated,IdentityPreservedandMassBalanceCSPOandGreenPalmcertificatesfromcompaniesoperatingintheUK).ItshouldbenotedthatRSPOmembers’datareportedthroughtheRSPOACOPdigesthasbeenusedastheonlydatasourceforestimatingtheconsumptionofsustainablePOandPKObyfinishedgoodsproducersandretailers.RSPOmembershipaccountsforarelativelyhighproportionofallconsumergoodsmanufacturersandretailers,butnotall.Thismeansthattheestimatedtotalconsumptionandestimatedsustainableconsumptionislikelytobeanunderestimate.
StakeholderconsultationAnonlinequestionnaire(foundinAnnex7)wassenttokeystakeholders.Questionsweredesignedtotriangulatethetrade,refineryandRSPOACOPdatawithstakeholderviews,byaskingstakeholderstoselecttheirrelevantsectorandchoosewhichsetofimportfiguresbestreflecttheirexperience.Thisapproachaimedtoenhancethelevelsofstakeholderfeedbackfromthepreviousstudy,whilstmaintainingcommercialconfidentiality.Thequestionnairesalsoallowedtheopportunityforstakeholderstocommentandprovidetheirownestimatesanddatawheretheywished.
FinalanalysisOncestakeholderfeedbackontheinitialestimateshadbeengathered,figureswererefined.
24Withtheirlatestannualstatisticspublication,OilWorldrevisedtheirpalmoilfiguresretrospectivelyfor2012and2013by2%and3%respectively.Thesenewfiguresarenotreflectedinthisreport’sfindings,inordertomaintaincontinuityinreporting.25http://www.rspo.org/en/annual_communications_of_progress
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AssumptionsandLimitationsDuetothecomplexnatureofpalmoilsupplychainsandtheavailabilityofdataithasbeeninevitablethatanumberofassumptionshavebeenmadeateachstageoftheanalysis.Wherepossiblethesehavebeeninlinewiththepreviousresearchand/orinformedbystakeholderengagement.Thissectionexplainswhatassumptionshavebeenmadeduringtheanalysis.CalculatingthetotalconsumptionofUKpalmandpalmkerneloil:
• TotalUKconsumptionhasbeendefinedasthetotalimportsinvolumeforagivenyear(metrictonnes).UKimportsarebaseduponsolelyEUROSTATdataprovidedbyFEDIOL.
• Derivatives/fractionsandfinishedgoodshavenotbeenincludedintheimportfigures.Thismeansthattheimportfiguresarelikelytobeanunderestimate.
Calculatingthevolumesofsustainablepalmandpalmkerneloil:
• ThisanalysisdefinesCSPOdifferentlyfrompreviousreports,whichincludedRSPOsupplychainmodelsMassBalance,SegregatedandIdentityPreservedCertifiedSustainablePalmOilandGreenPalmcertificates.ThisreportdoesnotincludeGreenPalmcertificatesintheheadlinefigures.
• The2011DefraresearchreportidentifiedarangeofcompaniesthatimportedpalmoilintotheUK.AsthemajorimportersofpalmoilintotheUK(assubstantiatedbystakeholderengagement)thisanalysisrefinedtheoriginalapproachtakenin2011andfocusedsolelyontherefinerydata,asthemostrobustmeanstocapturetheupstreamsupplysustainablepalmoilintheUK.Refinersprovidedsalesdata,asopposedtoimportdata.Salesandimportfiguresareassumedtobeessentiallythesame,thoughaveryminoramountofpalmoilandpalmkerneloilmaybelostintherefiningprocess.
• ItshouldbenotedthattheestimateofimportsofSegregated,MassBalanceandIdentityPreservedCertifiedSustainablePalmOil(CSPO)islikelytobeanunderestimateasitisbaseduponimportdatafromUKrefinersonlyandexcludesimportsbyothercompanies.
• TheRSPOAnnualCommunicationofProgressdatawasusedtoassessthedownstreamconsumptionofsustainablepalmoilfortheUK(the‘consumergoodsproducers’and‘retailer’classifications),althoughthisislikelytobeanunderestimateasitexcludespurchasesmadebynon-RSPOmembers.AllUKregisteredcompanieswereincludedintheanalysis.ThisconsumptiondatawasnotincludedinoverallfiguresshowingsustainablepalmoilconsumptionintheUK.
• InadditionthisstudyalsoincludesinformationaboutpalmoilconsumptionforbiofuelsundertheInternationalSustainability&CarbonCertificationassustainableforbiofuelsreportedundertheRenewableTransportFuelObligation(RTFO)andRenewablesObligation(RO)aslistedinAnnex5.
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil viii
Annex4.OilWorldFiguresOilWorldandFEDIOLfigureswereonly10%differentin2016,asopposedto24%and21%in2014and2015respectively.AccordingtoOilWorlddata,importsofpalmoilandpalmkerneloilintheUKaccountedfor467,400mtin2016.Usingthisbaselinedata,purchasesofMassBalance,Segregated,andIdentityPreservedCSPOrepresents70%ofUKpalmoilusage.ThebelowfigurecomparestotalOilWorldimportswithMassBalance,Segregated,andIdentityPreservedCSPOuseandGreenPalmpurchasesfrom2012–2016.
AccordingtoOilWorlddata,importsofpalmkernelmealintheUKaccountedfor463,300mtin2016,comparedto382,000mtin2015,or663,000mtin2009.ThereisverylittlediscrepancybetweenFEDIOLdataandOilWorlddataforpalmkernelmeal.
9% 15%30% 35% 38%
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AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil ix
Annex5. BiofuelsSustainableconsumptionofpalmoilwithinthebiofuelssectoriscontrolledbytheRenewableFuelsTransportObligation(RFTO)andtheRenewableObligation(RO).ThestatisticsoftheRFTOareintheirninthyearofreportingwiththemostrecentrunningfromthe15thApril2016tothe14thApril2017.VolumesoftotalaswellassustainablepalmoilusedinbiofuelsweregatheredfromtheRFTOstatisticsforthelast9yearperiodsandwereusedtoproducethebelowfigure.ItshouldbenotedthatthisRFTOreportingcalendardoesnotdirectlycorrespondtothereportingcalendarusedbyRSPO’sAnnualCommunicationofProgress.Inyearnine,100%ofbiofuelsweresustainable.Biofuelshavebeen100%sustainablesinceyear5.Therehasbeenasubstantialdecreaseinthevolumesofpalmoilinthelastsixyearsofreportingfrom127,008,760litresinYear1(2008-9),whichrepresented9.9%ofallbiofuels,tozerolitresinYear9(2015-16),or0%ofbiofuels.ThisdeclineintheuseofpalmoilasabiofuelintheUKhasbeenattributedtopolicychangessuchastheintroductionoftheRenewableEnergyDirective(RED).ThiswasadoptedbytheECin2009andadaptedintotheUK'sexistingRenewableTransportFuelObligation(RTFO).ChangestotheRFTO,asaresultoftheRED,includedmandatorysustainabilitycriteriasuchasrobustGreenhouseGasEmissiontargetsandlandcriteria,toensurethelifecycleGHGemissionsofbiomassareacceptableandtopreventadverselandusechangesuchasdeforestation.Somebiofuelsuppliersmayhavefoundithardtopurchasepalmoilandpalmkerneloilproductsthatcompliedwiththeserequirements,leadingtoareductionintheiruseinthebiofuelssector.TheRenewablesObligation(RO)providesincentivesforlarge-scalerenewableelectricitygenerationbyrequiringUKsupplierstosourceaproportionoftheirelectricityfromeligiblerenewablesources,includingpalmoilplantations.PalmKernelExpeller(PKE,alsoknownaspalmkernelmeal)andPalmFattyAcidDistillate(PFAD)arethemainpalmproductsconsumedbytheelectricitygeneratorsintheUKclaimingsupportundertheRenewablesObligationScheme.AccordingtotheAnnualSustainabilityReport2015-2016(Ofgem,2017),in2015-16therewasnoPKEorPFADconsumed,comparedtotheconsumptionofamixtureofPKEandPFADinsomepreviousyears-48,012mtin2011-12,17,735mtin2010-11and113,090mtin2009-10.Thisfluctuationislikelytobedrivenbyanumberoffactors,whichcouldincludeavailabilityofPKEandPFAD.
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil x
Annex6. Revised2015RefinerFiguresThe2015totalrefineryfiguresweresomewhatincorrect,duetoinaccuratereportingbyonerefinerontotalusageandtotalCSPOusage.Correctfigureshavenowbeensubmittedbytherefiner,butarenotincorporatedinthemainbodyofthereportforthepurposeofcomparisonwithpreviousyears’analysis.Thecorrect2015totalrefinerimports,whenincludingGreenPalm,shouldequal473,320mt,asopposedto457,294mt.Thecorrect2015totalrefinerimports,whennotincludingGreenPalm,shouldequal342,059mt,asopposedto326,033mt.Thegraphbelowdetailsacomparisonof2012–2016totalCSPOuse,includingGreenPalm,usingtherevised2015figures.
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AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xi
Annex7. Stakeholderquestionnaire Background
TheRoundtableonSourcingSustainablePalmOilhassignedtheAmsterdamDeclarationtoworktowards100%sustainablepalmoilsupplychainsinEuropeby2020,andhasagreedtocontinuereportingonsustainablepalmoilconsumptionintheUK.EfecahasproducedadraftAnnualProgressReport(APR)focusingontheimportofpalmoilintheUKasthecoreindicatorofsustainableconsumptionofpalmoilfortheUK.TheresultsoftheAPRareaddressedinthisquestionnaire.AboutthissurveyYourinputintothisAPRisessentialtoouranalysis.Thesurveyconsistsof18questionsandshouldtakeapproximately15minutestocomplete.PleasecompletethesurveybyDecember1statthelatest.Inthefollowing,wewouldliketoaskforyourviewsonourinitialpreliminaryfindings.Pleasenotethatthefindingshavenotyetbeenapprovedforpublicationandmaychange.Ifyouwouldliketoshareourpreliminaryfindingsexternally,pleasecontactus.Wewouldalsoliketogatheryourinputonobstaclestosourcing100%andideasonwherefurthersupportwouldbehelpful.HowtocompletethissurveyPleaseselecttheanswer(s)whichbestreflectyourviewandmakeasmanycommentsasyouwouldlike.Itwouldbeveryhelpfulifyoucanprovideexamplesthatsupportyourviews.Notethatsomequestionshaveanoptiontoselectmorethanoneanswerandyoucanalwaysinsertcomments.Ifyouwouldlikemoreinformationorneedhelpcompletingthisquestionnaire,[email protected].
Methodologyfor2016analysis AsanindicatorfortheconsumptionofsustainablepalmoilintheUKthisanalysishas
focusedontheimportandsupplyofRSPOmassbalanceorsegregatedCertifiedSustainablePalmOil(excludingderivativesandfinishedgoods)byUKrefineries.IthasnotaccountedforthepurchaseofGreenPalmcertificatesbyUKbasedcompaniesintheheadlinefigure.ThishasbeensupplementedbyRSPOACOPfiguresonUKretailandmanufacturingforadditionalcommentaryonprogressonthesustainableconsumptionofpalmoilintheUKamongRetailersandConsumerGoodsManufacturers.TotalvolumesofUKimportsofpalmandpalmkerneloilhavebeengatheredfromonedatasource:FEDIOL(representingtheEUvegetableoilandproteinmealIndustry)inordertomaintainconsistencywithEuropeancounterparts.InpreviousyearsdatafromOilWorldwasusedaswell.
1 Doyouhaveanycommentsonthenewmethodologyused?
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xii
2 Doyouhaveanycommentonpotentialnon-refineryimportsweshouldincludeinouranalysis?
3 DoyouhaveanycommentontheuseofFEDIOLasthemaindatasource?4 Doyouhaveanycommentonothertradedatasourcesthatshouldbeconsidered
duringtheanalysis? Summaryfindings-yourviews5 Doyouagreeordisagreewiththeestimatethatin2016approximately328,139metric
tonnesofUKimportsofpalmandpalmkerneloilweresustainablethroughmassbalance,segregatedoridentitypreservedCertifiedSustainablePalmOil?
6 Doyouagreeordisagreewiththeestimatethat84,949metrictonnesweresustainableasaccountedforbyGreenPalmcertificates?
7 ThepreliminaryfindingsindicatethatvolumesofmassbalanceandsegregatedCertifiedSustainablePalmOilshowedaslightincrease,whilethenumberofGreenPalmcertificatespurchasedintheUKdecreasedgreatlysince2015.Pleasecommentbasedonyourexperienceonwhatyouthinkmaybedrivingthesetrends.
8 Doyouagreeordisagreethatthe328,139metrictonnesofUKimportsofpalmandpalmkerneloilrepresent78%ofUKpalmoilconsumption,ordoyoufeelsomeimportdataismissingfromthisanalysis?
Meetingthe2020AmsterdamCommitment9 Didyoursectorortradeassociationmemberssource100%CSPObytheendof2016?10 Ifnot,whatwerethemainobstaclestosourcing100%CSPO?11 Hasyoursectorortradeassociationsetanewtargetmovingforward?12 HowwillyoucommunicatetheAmsterdamCommitmenttoyourstakeholders?13 Whatactionscantheprivatesector,NGO’s,andthegovernmenttaketosupport
progresstowardssourcing100%crediblycertifiedsustainablepalmoil?14 WoulditbehelpfulfortheRTtoundertakeaformalassessmentwithmemberson
areaswheretechnicalassistanceisrequired?15 Woulditbebeneficialtodevelopindicatorsforspecificsectorsthatusedifficultto
quantifyamountsofpalmoil,i.e.animalfeed,foodservice,oleochemicals?16 ShouldtheRTliaiseformallywithEuropeancounterpartsonmonitoringandtechnical
assistance?17 Haveyoubeenaskedbybuyerstosupplyinformationinadditiontothatrequiredby
RSPOcertification(i.e.accordingtoothercorporateresponsiblesourcingprotocols)? Pleasefeelfreetomakeanyadditionalcommentsyouwouldlike.
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xiii
Annex8. SummaryofStakeholderSurveyresultsTheStakeholderSurveywassentto64stakeholdersfrom44organisations,includingallmajortradeassociations.Outofthe64stakeholderscontacted,16responded.Manyrespondentsskippedseveralquestions.
CPETmethodologyfor2016analysis
1.Doyouhaveanycommentsonthenewmethodologyused?• WeagreewiththeuseofFEDIOLdataonlyandwelcomethereviewofACOP
data.• Withtheexpectedtransitionfromcertificatestophysicalsuppliesofpalmoil
thenewmethodologymakessense.Itshouldbeclearlyexplainedinthereportandcommunicationstoensurethereisnomisunderstanding.
• Betternowwehavejustonetradedataset.ACOPisalsogoodtotriangulatebutthequalityofACOPisvariablecompanytocompany.
• It'sprobablythebestavailable.• Itwouldbegoodtohavephysicallycertifiedpalmoilasonecategory(IPand
segregated),andmassbalanceasanother.Massbalancebeingaweakerstandard,sowecandrivetowardsphysicallycertified.
2.Doyouhaveanycommentonpotentialnon-refineryimportsweshouldincludeinouranalysis?
• Itwouldbeusefultoattempttodeterminederivativeconsumptionbyengagingwithindustrybodiesandhavingthemasktheirmembershipfordata
• Itwouldbeusefultoestimatehowmuchofourpalmoilconsumptionisbasedinimportedfinishedgoodsevenifitistoodifficulttocollectprecisedataonexactcontent.
• Wouldbeamazingtohavethem.Perhapsthroughasamplesurveyofatypicalbasketofgoods(likeforinflation)andanestimationofPO/PKO?
• Ideallyproductcominginreadyrefinedandpackedorasaningredientshouldbecountedalso.butacceptthisisinthetoodifficulttray!However,theFWDoughttobeabletohelponthereadypackedoil.
3.DoyouhaveanycommentontheuseofFEDIOLasthemaindatasource?
• WeagreewiththeuseofFEDIOLdataonly.• Noproblemwiththisaslongastherationalefortheselectionofthisdata
sourceisclearlyexplained.• PerhapswesayitisEuroStatratherthanFEDIOLwhichisthetrade
association.EuroStatisanofficialEUdataagency.• Justdon'tcallitFEDIOLdata!ItisEurostatdatathatFEDIOLpublishontheir
website.
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4.Doyouhaveanycommentonothertradedatasourcesthatshouldbeconsideredduringtheanalysis?
• RSPOdata;scorecarddataSummaryfindings-yourviews5.Doyouagreeordisagreewiththeestimatethatin2016approximately328,139metrictonnesofUKimportsofpalmandpalmkerneloilweresustainablethroughmassbalance,segregatedoridentitypreservedCertifiedSustainablePalmOil?
Agree Disagree(pleasecommentbelow)7(70%) 3(30%)
• Seemsfeasible• Wetrustthefigureisaccuratebutnotsureweunderstandthequestion–does
thismeanthatthesupplycomesfromsustainablesourcesorthatthequantityimportedwascertifiedunderthesestandards?
6.Doyouagreeordisagreewiththeestimatethat84,949metrictonnesweresustainableasaccountedforbyGreenPalmcertificates?
Agree Disagree(pleasecommentbelow)5(83%) 1(17%)
• Asabove,thefigureisprobablyaccuratebutGreenPalmdoesnotofferthesamelevelofassuranceandsustainabilityasphysicalsupplychains.
7.ThepreliminaryfindingsindicatethatvolumesofmassbalanceandsegregatedCertifiedSustainablePalmOilshowedaslightincrease,whilethenumberofGreenPalmcertificatespurchasedintheUKdecreasedgreatlysince2015.Pleasecommentbasedonyourexperienceonwhatyouthinkmaybedrivingthesetrends.CompaniesswitchingfromGreenPalmto
massbalanceorsegregatedReformulationofproductstoreducepalm
oilcontent13 2
• MostlikelyswitchtoMBALorSEGphysicalsupplychainsIdonotbelieve• Companiesareincreasinglylookingforphysicalsupplychains,whichare
becomingmoreavailable.ProducerscertifiedunderRSPOareincreasing,butcertifiedproductbeingsold(globally)hasstagnated.Nowitiscriticalthatsustainablepalmoilcertificationworkstoincludemoregrowers.ItwouldalsobeusefultounderstandwhybuyersarenotpurchasingRSPOCredits.Theremayalsobeincreasedconcernaboutthepopularityandviabilityof“palmoilfree”certification.
• Companiesaremovingtomorephysicalsuppliestostrengthentheirclaims;toincreasetraceability;inresponsetoNGO/otherpressureandasthenextstepfromcertificatebasedpurchases.
• Oruseofcompanyleveltraceabilityprocedures.• NGOslikeGreenpeacehavestatedthattheydonotseeGreenPalmasan
acceptableproofofsustainability.8.Doyouagreeordisagreethatthe328,139metrictonnesofUKimportsofpalmandpalmkerneloilrepresent78%ofUKpalmoilconsumption,ordoyoufeelsomeimportdataismissingfromthisanalysis?
• Broadlyagree
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xv
• Thedataismissingestimatesofembeddedpalmoil,importedwithinproductssuchassoapormargarinethatweknowaremajoruses.
• Notsure• Can'tcomment• Nocomment
Meetingthe2020AmsterdamCommitment9.Didyoursectorortradeassociationmemberssource100%CSPObytheendof2016?
• No• No• Weareabletosourcewhateverthemarketdemands• Yes,byendof2015
10.Ifnot,whatwerethemainobstaclestosourcing100%CSPO?
• webuylittlePO/PKoilsbutlargervolumesofderivatives• DifficulttosourceCSPOinanimalfeeds,especiallythroughwholesalers.• POderivativesandfractions
11.Hasyoursectorortradeassociationsetanewtargetmovingforward?
• ZSLhasatargettoensurethatallpalmoilinprocessedanimalfeedandcleaningproductsisCSPObyend2018.
• Yes100%by2020forEurope-acrossallsupplychains.• No• No
12.HowwillyoucommunicatetheAmsterdamCommitmenttoyourstakeholders?
• Constantengagementwithsuppliersandcustomers• ThroughtheBritishandIrishAssociationofZoosandAquariums(BIAZA),
whichprovidesresourcesformembersonitswebsite.WealsoprovideinformationonSPOTT.org
• Yes-thisisanimportantenablingcommitmentnotjustforpalmoilbutforotheragriculturalcommoditiestoo.
• Regularlywithourexternalcomm'sworkonsocialandmainstreammedia.• It'sdone• Tobedetermined
13.Whatactionscantheprivatesector,NGO’s,andthegovernmenttaketosupportprogresstowardssourcing100%crediblycertifiedsustainablepalmoil?
• Again,engagementwithindustrybodiesWecansupply100%• WorkwiththeRSPOandcompaniestoensurethecredibilityofthestandard
andincreaseitsuptake• Privatesector-strengthenedanddeepenedcommitmentse.g.tonon-own
brand;advocacytoencourageothercompanies;collaborativetransparency/workwithsupplychainactors;projectsonthegroundNGOs:continuedpressure,collaborationandsupport;pressureandengagementin
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xvi
newmarketsetc.Government:deepenedandextendedcommitment;supportservicesandadvice;widerengagement.
• Positivestoriesaboutpartnershipsinthegroundandimpactthatitishaving.UKGovernmentshoulddevelopanactionplaninsupportofAmsterdamDeclarationandsustainableproductionwithODAtosupportorigincountries.
• Encouragefoodserviceandpublicprocurement• publicprocurementcommitments,collaborativeactionondifficultsupply
chains• Asaninvestor,wecancommunicatethisexpectationtoourholdings.
14.WoulditbehelpfulfortheRTtoundertakeaformalassessmentwithmembersonareaswheretechnicalassistanceisrequired?
• Yes-specificallyforderivatives/fractionsandfinishedproducts.AlsohelpfulforasimilarRTonothercommoditieslikesoy.
• Yes• Yes• Yes• Yes• Maybe
15.Woulditbebeneficialtodevelopindicatorsforspecificsectorsthatusedifficulttoquantifyamountsofpalmoil,i.e.animalfeed,foodservice,oleochemicals?
• Yesbutnotrepeatingwhatalreadyexistsbutbringingtogetherusefulsources.• YesIthinksomeagreeduponassumptionsandproxyindicatorswouldbe
helpful.• Yes• Yes• Possibly
16.ShouldtheRTliaiseformallywithEuropeancounterpartsonmonitoringandtechnicalassistance?
• Itwouldbegoodtolooktowardsconsistentmonitoringapproachestoenablecomparisonandsharedexpertise/resources.
• Yes-weshouldaimforacommonmonitoringandreportingframeworkandcycle.
• Yes• Yes• Yes• Yes• Yes
17.HaveyoubeenaskedbybuyerstosupplyinformationinadditiontothatrequiredbyRSPOcertification(i.e.accordingtoothercorporateresponsiblesourcingprotocols)?
• Yesspecificallyahigherdegreeoftransparencyinthesupplychain• Requestsfromvisitorsregardingpalmoilcontentinfoodsoldonsite.
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xvii
Pleasefeelfreetomakeanyadditionalcommentsyouwouldlike.• WethinkitwouldbebettertocallthegrouptheUKStatementonSourcing
SustainablePalmOiltoavoidconfusionwiththeRSPO.ItmightalsobeusefultoanalyseifthereisadiscrepancybetweenUKimportsofCSPOsoldasCSPO,andimportsofCSPOsoldwithoutthepremiumasnon-CSPO.
• Thecommitmenthasbeenreallysuccessfulandisdemonstrativeoftheprogressthatcanbemadewhenthereisgovernmentsupport/encouragement.Iwouldliketoseecontinuedeffortto'getthejobdone'andtheextensionintootherforestriskcommoditiesinc.soy.
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Annex9. QualitativeUpdatesfromRoundtableMembersBritishandIrishAssociationofZoosandAquariums(BIAZA)BIAZAisaconservation,educationandwildlifecharityrepresentingover100memberorganisationsincludingallthesignificantzoosandaquariumsinBritainandIreland.BIAZA’sEnvironmentalSustainabilityandClimateChangeWorkingGroupaimstosupportmembersinhelpingtomeetbothlocalandglobalsustainabilitychallenges–thePalmOilSubgroupreportstothisgroup.During2016/2017,BIAZAmadeconsiderableprogressinraisingawarenessaboutpalmoilamongstitsmembersandprovidinginformationandguidelinestosupportmembersinboththeprocurementofsustainablepalmoilandincommunicatingtheissuetothepublic.Attheendof2016,BIAZAupdatedtheirpalmoilstatementandadvicetomembers.The2016statementreflectsthefactthatwenowencourageourmemberstoensureunsustainablepalmoilisremovedfromtheirsupplychainsbysourcingproductscontainingonlycertifiedsustainablepalmoil(CSPO),ratherthanboycottingpalmoiluseentirely.Beingamembershiporganisation,BIAZAguidesmembersonbestpracticeandhasprovidedguidelinesformembersoncreatingpoliciesandprocuringCSPO,andwillcontinuetodoso.However,achieving100%CSPOisnotapolicywhichBIAZAhasadoptedforitsmembers,althoughwewillcontinuetoadvocatethisasbestpractice.TheBIAZAPalmOilSubgroupisworkingtoprovideaccreditedcollectionswithstraight-forwardresourcestoinformandsupportthemonpalmoilissues.Toimproveandmaintaintheeffectivenessofsuchresources,weareconductingongoingmonitoringofdevelopmentsinpalmoilpolicyacrossthemembershipusingashortseven-questionqualitativesurvey.Inearly2017,were-ranthesurveywhichwasinitiallyconductedin2014.Theoverallresultsofsurveysconductedin2014and2017suggestincreasinginterestinandengagementwithpalmoilissuesacrosszoosandaquariumsintheUK.Of16institutionsthatrespondedtothesurveysinboth2014and2017,seventhatdidnothaveanofficialpalmoilpolicyorstancein2014nowhaveoneinplace.Inaddition,fiveinstitutionsthatdidnotsupportorwereunsureofsupportingsustainablepalmoilin2014nowreportthattheysupportsustainablepalmoil.InMay2017,thePalmOilSubgroupdeliveredatalkattheBIAZAAnnualConferencetomembersregardingthejustificationforthenewpositiononsustainablepalmoil.Aninternalpalmoilcampaignwaslaunchedformemberswhichincludedtheavailabilityofnewresourcescreatedbymembersonpalmoilforusebyothercollections.OurprocurementadvicewasupdatedtoreflectchangesintheindustryandtotheBIAZApositionstatement,andthiswasrolledoutagaintomembersviathememberscampaignpageonthenewwebsite.Anumberofnewinitiativesarecurrentlyunderway,includingthedevelopmentofacommunicationgroupformembersonpalmoilandsharedprocurementresourcesandsupplierinformationformembers.OnekeyobjectiveforBIAZAistoincreasetheextenttowhichzoosandaquariumsworldwidecollaborateinordertoinfluencetheindustrywithaviewtoreformingtheirpractice.FollowingaworkshopgivenbyBIAZAmembersattheEuropeanAssociationofZoosandAquaria(EAZA)ConservationForum,anewEAZApalmoilgrouphasnowbeensetuptoworkwithmembersacrossEuropeonpalmoilissues.BIAZAmembersarealsoworkingwithotherzoosataninternationalleveltoencouragemorecollaborativeworkonpalmoilgloballythroughtheWorldAssociationofZoosandAquariums(WAZA).
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xix
Althoughgoodprogresshasbeenmadeinthesector,challengesstillexistformemberslookingtosourceCSPO;understandingthepalmoilcontentuseintheanimalfeedsectorisparticularlyprohibitivetoreaching100%CSPO.Theanimalfeedsectorisverymuchbehindthefoodsectorintermsofknowledgeofpalmoilanditsderivativesuse,andobtainingaccurateinformationfromsuppliersisthereforeanothermajorchallenge.BIAZAwillcontinuetoreachouttorelevantorganisationstoovercomethischallenge.BritishRetailConsortium(BRC)BRCmemberscontinuetoleadeffortstodeliverresponsiblysourcedproductstotheircustomers.Bytheendof2015,leadingUKretailersreachedthemilestoneachievementofvoluntarilysourcing100%certifiedsustainablepalmoil.ThroughtheRetailerPalmOilGroupBRCmembersareworkingtoimprovethecredibilityofcertificationstandardsandsupportthesustainabletransformationofthewiderpalmoilindustry.Manychallengesstillremainintheproductionofpalmoilandcoordinatedactionisrequiredfromallstakeholdersinthesupplychain.ThroughtheUKRoundtableonSourcingSustainablePalmOil,BRCbackstheCommitmenttoSupport100%SustainablePalmOilinEuropeby2020.ChilledFoodAssociation(CFA)CFArepresentsmanufacturersofchilledpreparedfoods,predominantlysupplyingthemajormultiplesintheUK’sretailmarketunderretailers’ownlabels.TheUK’s£10billion-pluschilledpreparedfoodsectorhasneverbeenamajoruserofpalmoil.Asinpreviousyears,intheorderof99%ofpalmoilusedbyCFAmembersinchilledfoodproductioninUKoperationsisSPO,allcertified.Onlysmallquantities,asconstituentsofingredients,remaintobecertified.ThemajorityofSPOusedisRSPOsupplychaincertified.Ifthishasnotbeenpossible,suppliershavefoundalternativestopalmoil.RSPOAnnualCommunicationofProgressreportshavebeencompletedeachyearsince2012anddataarereportedtoretailcustomers.Thelimitedavailabilityofsomederivativesisaproblemwherethesearerequiredforfunctionality.Thisdisproportionatecostofpursuingcertificationisalsoabarrierforthesmall,insignificantremainingquantitiesoutstanding.RetailcustomercommitmentstodeforestationarehelpingtodriveuseofSPO.SeedCrushersandOilProcessorsAssociation(SCOPA)SCOPAisthetradeassociationforcompaniesengagedinoilseedextractionandoil/fatprocessingintheUnitedKingdom.SCOPArefinermembershavebeeninthepositiontosupply100%CSPOsince2012.SCOPAhaswelcomedtheUKStatementandarepleasedtohavemetthegrowingdemandforCSPO.SCOPAmembersareallmultinationalcompaniesandlong-standingRSPOmembersandtheirindividualglobalandnationalcommitmentsandprogresshavebeenpubliclystated.Thechallengescontinuetobepoordemandfromsomesectors,andsecuringcertifiedsustainablesuppliesofpalmkerneloilandfractions,althoughtherehasbeensignificantprogresswiththeseproducts.
AnnualProgressReport–UKRoundtableonSourcingSustainablePalmOil xx
SustainableRestaurantAssociation(SRA)TheSustainableRestaurantAssociationisanot-forprofitorganisationwhosemembershiprepresentsabroadspectrumofthehospitalityindustry,allunitedintheircommitmenttosustainabilityandmakingpositivechangestowardsabetterfoodsystem.TheSRAcurrentlyprovidesmemberswithafactsheetonpurchasingsustainablepalmoilproductsandresearchesalternativesuppliersofsustainablepalmoilformemberrestaurants.TheSRAencouragesandsupportsitsmemberstoproducesustainablepalmoilsourcingpoliciesandtopromotetheirintentionsandactionsforsustainablepalmoilsourcingtotheircustomers,suppliersandfellowfoodservicebusinesses.TheSRAfeelsthereareanumberofchallengesforitbeingabletoreportonitsprogressandasa“smallnot-for-profit”organisationthereisalimitedamountoftimetheSRAcanputintoactivitiesthatarenotcoretoitsmembership.Furthermore,theSRAconsidersthatitcanonlyrepresentitscurrentmembersandcannotspeakforthewholeofthehospitalityindustryandsoislimitedinthescopeofitsreporting.TheSRAisworkingcloselywithotherorganisationsintheindustrytocollaborativelyimproveandprovideuptodateinformationonsustainablepalmoil.The“FoodMadeGood”programmeishowtheSRAcollaborateswiththehospitalityindustrytoworktogethertowardsasharedgoal.Itsmonthlycampaignsfocusonselectedsustainabilitythemesandcallstoaction,wherebothmembersandnon-membersarebeabletoparticipateandjointheconversation.NewforthisyearisTheFoodMadeGoodonlinecommunityhub-aplatformformemberstodiscussspecifictopics,includingsustainablepalmoil.Foodservicebusinessesfromdifferentsectorsareencouragedtoshareknowledgeandbestpractice,discusschallengesandfindcommonsolutions.ZoologicalSocietyofLondon(ZSL)Asaninternationalwildlifeconservationcharity,ZSL(ZoologicalSocietyofLondon)workstoinfluenceboththepublicandprivatesectorsonsustainabilityissues.InMarch2017,ZSLpublishedareport–HiddenLand,HiddenRisks–ontheneedforimprovedcorporatereportingoflandholdingsassociatedwithpalmoilproduction(https://www.spott.org/palm-oil/landbank/).ZSL’sSPOTT(formerlytheSustainablePalmOilTransparencyToolkit)initiativeprovidesassessmentsof50ofthelargestpalmoilproducersandtraders,againstarevisedframeworkof125indicatorsrelatingtoenvironmental,socialandgovernance(ESG)bestpractice.SPOTTiscurrentlyexpandingitsfocusfrompalmoiltoothercommoditieswithhighimpactsonbiodiversity.ZSLwillpublishassessmentsof25timber,pulpandpapercompaniesoperatingintropicalregionsinOctober2017,followedbyupdatedpalmoilcompanytransparencyassessmentsinNovember2017atRSPORT15.InJune2017,SPOTTalsolaunchedanupdatedwebsite(https://www.spott.org/palm-oil).SPOTTcontributestotheKELOLASendangproject,apioneeringpartnershipforsustainablelandscapemanagement.TheprojectwasdevelopedbyZSLandpartnersincollaborationwithlocalcommunities,theprivatesectorandtheGovernmentofSouthSumatra,Indonesia.SupportedbyDFIDandotherfunders,theprojectaimstoaddressthechallengesofdeforestation,peatlanddegradation,wildfiresandtheirassociatedclimateimpactswithinthecontextofgreengrowthandbiodiversityconservation,inordertopilotasustainablemanagementpartnershipmodelacrosstheSembilang-
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DangkulandscapeofSouthSumatra,criticalhabitatfortheCriticallyEndangeredSumatrantigerandmanyotherspecies.AsanactivememberoftheRSPO,ZSLservesasanalternatememberontheRSPO’sBoardofGovernors,andparticipatesinitsBiodiversityandHighConservationValue(HCV)WorkingGroup.FollowingaZSL-ledresolution(http://www.rspo.org/file/ga12/GA12-Resolution6g.pdf),theRSPOSecretariathasimproveditsAnnualCommunicationofProgress(ACOP)reportingprocess.ZSLattendedandpresentedattheRSPOEuropeanRoundtableinJune,andhostedaneveningreceptionatZSLLondonZootointroduceRSPOmemberstoZSL’swiderconservationwork.ZSLisalsoactivelyparticipatingintheInternationalUnionforConservationofNature(IUCN)OilPalmTaskForce,establishedtoinformthedebateonthesustainabilityofpalmoilusingthelatestresearchandscientificinformation,andprovideguidancetoIUCNaboutitspoliciesandstrategiesthataffectorareaffectedbypalmoil.ZSLiscurrentlycontributingtoasituationanalysisasrequestedatthe2016WorldConservationCongressinResolution061on“Mitigatingtheimpactsofoilpalmexpansionandoperationsonbiodiversity”(https://portals.iucn.org/library/node/46478).TogetherwiththeBritishandIrishAssociationofZoosandAquariums(BIAZA),ZSLhascontinuedtopromotesustainablebehaviourchangeamongvisitorsandbest-practiceinzoologicalmanagement.Althoughgoodprogresshasbeenmadeinthesector,oneofthemainbarrierspreventingzoosfromreaching100percentsourcingofCSPOisthecurrentlackoftraceability,levelsofRSPOmembershipanduptakeofRSPOcertificationinanimalfeedsupplychains.ZSL’sPalmOilPolicynowincludesatime-boundcommitmenttoensurethatallpalmoilusedinprocessedanimalfeedandcleaningproductsatbothZSLLondonZooandZSLWhipsnadeZoowillbeCSPObyend2018.Foodforhumanconsumptionatbothzoosisalready100percentCSPO.