RSPO & the Supply Chains

Promoting Trade and Consumption of Sustainable Palm Oil in China8 June 2016

Bob NormanGeneral Manager

• RSPO has 4 approved supply chain options

– Identity Preserved (IP)– Segregated (SG)– Mass Balance (MB)– Book and Claim (BC)

• GreenPalm operates the Book and Claim option

Supply Chain Options

RSPO Supply Chain

RSPO

Unit of Certification Mill + supply base

•All supply chains start at the Mill

•Mills can be certified to one of two programme levels:

•Identity Preserved

•Entire estate cert.

•Mass Balance

•Include non-cert FFB (smallholders?)

RSPO Supply Chain

•IP & SG allow Retailers/Manufacturers to say :

•“My product contains RSPO CSPO”

•MB & GreenPalm allows them to say :

•“My product advances the production of RSPO CSPO”

RSPO Options

Single Mill

Traceabilityback to a mill But it’s….

Expensive

&

Not taken up by the market

Kept separate from conventional oil palm

Even other RSPO certified palm oil

RSPO Options

Multiple IP cert. Mills

Traceability back to a mill is lost

Kept separate from conventional oil palm

Can be commingled at any stage of supply chain

Can claim product contains CSPO

RSPO Options

Mill

Cert

Cert

Not cert

Can be commingled at any stage of supply chain

Zero traceability

Mill Mass Balance

• Uptake in Europe very low in early years

• Fractionation yields

• Inflated premiums

• Chain of Custody

• Claim (same as GP)

RSPO Options

1000mt SG Palm

1000mt Conventional Stearin

1000mt MB Stearin

1000mt Conventional Palm

Downgrade

Upgrade

1000mt “MB”

Stearin

Refinery Mass Balance

Zero traceability No Sustainable material

MB Supply Chain

Refinery MB •Purchase SG Palm from mill

•Buy in conventional fractions

•Switch label SG to MB

•Sell MB products to customers

•Downgrade SG Palm

RSPO Physical S/C

• All require RSPO Chain of Custody

• Every actor to be RSPO member

• Every actor to be RSPO supply chain certified (audited)

RSPO Options

Traceable to mill

Inclusive of all certified mills

CSPO enter global supply chain No CoC

barriers

Same claim as MB (but with added traceability)

Offsetting option

End user receives no sustainable oil

Buy certificates representing CSPO

RSPO Certified Mills

Number of mills RSPO certified 279 (taken out IOI (12) & Felda (54))

IP5.8M mt

MB 5.3 M

mt

IP 125MB

154

Total certified volume 11.11 million MT (taken out IOI (0.75 million mt) & Felda (1.77 million mt))

18% of RSPO CSPO supply disappeared.

Considerations

• Supply chains facilitate• Premiums back to grower - how much do you want to pay?• Enable claims to be made – what do you want to say?

• Who needs the support?• Oil palm growers, smallholders etc. or supply chain actors

• Do we have the infrastructure capacity for physical supply chains?

• Once committed, it’s difficult to change. IOI/Felda