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<\/p>\nThe palm oil industry is largely unprepared for the EU\u2019s incoming Deforestation Regulation (EUDR), according to a new assessment by the Zoological Society of London (ZSL). The conservation charity warns the industry has a traceability gap, which puts businesses at risk of legal penalties and market exclusions, despite wide-scale anti-deforestation pledges. <\/p>\n
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Published on Tuesday, 14 November 2023, the latest SPOTT assessment confirms over two-thirds of the top 100 global palm oil companies have committed to zero deforestation ahead of the EUDR\u2019s December 2024 rollout.<\/p>\n
But, less than 12% have publicly disclosed the geolocations of their third-party supplier plantations, including independent smallholders, which ZSL argues is crucial data for verifying anti-deforestation pledges and partly the result of a lack of pressure from buyers and regulators and data protection policies.<\/p>\n
Meanwhile, only 53.8% of companies have publicly disclosed georeferenced maps of their own estates and a mere 15.9% for scheme smallholders \u2014 the small-scale farmers managed by those companies.<\/p>\n
\u201cWhile the EUDR doesn\u2019t dictate public map disclosure, it mandates comprehensive mapping of supplier plantations. The limited disclosures on SPOTT indicate a notable shortfall, impeding the verification of sustainable production practices,\u201d says Imogen Fanning, sustainable business project analyst at ZSL.<\/p>\n
\u201cOil palm plantations are grown in tropical forest regions, teeming with diverse wildlife. Without the precise geolocation of these plantations, it\u2019s exceedingly challenging to verify companies\u2019 adherence to their commitments to protecting forests and wildlife. Such omissions could also risk sidelining smallholders, compromising broader sustainable land management efforts.\u201d<\/p>\n
Costly transparency gap<\/strong><\/p>\n The EUDR requires companies to ensure products sold in the EU have not led to deforestation or forest degradation since 2021. Some companies are investing in geospatial technology to obtain the extensive GPS information required to comply with the law.<\/p>\n Companies that comply will be permitted to access EU markets, with consumers more confident the products they buy have been produced legally and without recent deforestation. But, companies that place non-compliant products on the EU market could face penalties.<\/p>\n \u201cThere are various potential penalties, including fines proportionate to the environmental damage and value of the items, which will gradually increase with repeated infringements. Other penalties include the confiscation of the products or revenues gained, temporary exclusion from public procurement processes and public funding,\u201d Eleanor Spencer, ZSL\u2019s sustainable business specialist for Asia, tells Food Ingredients First.<\/em><\/p>\n \u201cFor upstream companies, the repercussions of non-compliance are more likely to be felt through market exclusion.\u201d<\/p>\n Meanwhile, multinationals like Mondel\u0113z International are adapting their operations to comply with the incoming EUDR.<\/p>\n \u201cThe implementation date applicable to Mondel\u0113z International is December 30, 2024, and we are working diligently with a cross-functional team to prepare for compliance with the law in Europe, including the UK,\u201d a company spokesperson tells us.<\/p>\n Sustainability potential for palm oil<\/strong><\/p>\n ZSL acknowledges that palm oil can have a more environmentally sustainable future. Oil palm delivers 40% of the world\u2019s vegetable oil but is cultivated on just 6% of global land currently used for vegetable oils. Hailed by many as a \u201csuper-crop,\u201d it is 4\u201310 times more land-efficient than rivals and vital in many products from food to fuel, the charity notes.<\/p>\n \u201cPalm oil\u2019s future hinges on the industry\u2019s commitment to refining its production and supply chains. Companies championing traceability and actively backing smallholders not only uphold ethical and environmental values but also unlock avenues to a more expansive, discerning market,\u201d says Fanning.<\/p>\n NDPE (No Deforestation, No Peat, No Exploitation) commitments are often considered the cornerstone of sustainable palm oil production.<\/p>\n