Shell and Patum Oil help make a big difference to Thailand's sustainable palm oil production

'By the year 2050, the World Health Organization estimates the planet’s population will boom from 7 billion to 9 billion, placing increased pressure on global demand for energy as well as food and water supplies. Consequently, the need to develop and invest in more sustainable energy sources to meet the growing demand is mandatory.

For Shell, its sustainability commitments are focused on delivering more and cleaner energies in a responsible way to meet the world’s growing needs. In Thailand, one of Shell’s key aims is to help support the country’s growing reliance on biofuels, as outlined in the Alternative Energy Development Plan, by improving domestic palm oil production throughout the full supply chain as well as promoting positive economic impacts to local communities and the environment.

Over the past three years, Shell Thailand Ltd. and Patum Vegetable Oil Co. Ltd. joined forces in a project to provide financial and operational support for preparing palm oil crushing mills and smallholder farmers in the south of Thailand for Roundtable on Sustainable Palm Oil (RSPO) certification. In August this year, 797 smallholder farmers and five palm oil mills from Krabi, Surat Thani, Trang and Nakorn Sithammarat provinces received certification from the Roundtable on Sustainable Palm Oil.

Speaking at the certificate ceremony, which took place recently in Krabi province, Mr. Asada Harinsut, Country Chairman of Shell Thailand, said, “Shell is the first major oil company to invest in developing sustainable palm oil production and help farmers and mills to achieve RSPO certification. Every year, 100% of the palm oil Shell blends is independently certified by globally recognized organizations like RSPO and in 2014, we blended around 9 billion liters of biofuels in our petrol and diesel worldwide, making us one of the largest blenders of biofuels globally.”

“Shell is delighted for the farmers and mills for their dedication over the past three years to improve their processes and operations to receive RSPO certification. This also helps creates confidence that throughout the supply chain, from planting, processing and refining palm oil to the finished product of retail biodiesel, there are sustainability and social and environmental responsibilities. This reflects Shell’s commitment in making a difference in Thailand,” he said.

Mr. Sanin Triyanond, Chairman of the Thai Biodiesel Producer Association and Director of Patum Oil, said, “We are one of the largest palm oil refineries, biodiesel producers and consumers of crude palm oil in the country. Globally we estimate that only 20 percent of palm oil is RSPO certified. In Indonesia palm oil RSPO certification is 18-19 percent, Malaysia is 25 percent and Thailand RSPO certification is 1 percent. As you can see, Thailand accounts for a very small portion compared to Indonesia and Malaysia in terms of palm oil production and achieving RSPO certification.”

“Therefore, we would like to help our industry from its primary stage, which involves the farmers that need to comply with these global sustainability standards. There are eight principles for growers to be RSPO certified: number one is commitment to transparency; secondly, compliance with applicable laws and regulations; thirdly commitment to long-term economic and financial viability; fourth is the use of appropriate best practices by growers and millers; five is environment responsibility and conservation of natural resources and biodiversity; six is responsible consideration of employees and of individuals and communities affected by growers and mills; seven is responsible development of new plantings; and last but not least a commitment to continuous improvement in key areas of activity.”

Mr. Salahuddin Yacob, Technical Advisor from RSPO, said, “In Thailand, there are over 4,200,000 palm oil farms owned and managed by smallholders who are responsible for producing approximately 70 percent of the total volume of Thailand’s palm oil production. The RSPO intends to have smallholders certified in order to assist them to improve yields and raise more income levels while reduce the risk of lands conversion and safeguarding forest and diversity,”

“In addition, a heightened awareness of sustainability and the rise of ethical consumerism possess a strong influence on market demands and purchasing patterns in today’s economy. Compliance with the global RSPO standard is necessary for Thai farmers because many Thai and foreign corporations would select partners that have been RSPO certified during the procurement process. It is envisaged that incorporating RSPO certification into practices will help Thai farmers to maintain and or maximize palm oil trade to other countries,” Mr. Yacob said.

Mr. Chaowalit Wutipong, Chairman of the Community Enterprise For The Production Of Sustainably Grown Palm Oil in Krabi province, said that the benefits of RSPO certification provides smallholders with extensive knowledge on best agricultural practices, technical knowhow and skills in plantation management. RSPO certified palm oil can sell at higher rates when compared to general production, while helping ensure environments and communities are sustained responsibly. It also ensures Thai palm oil industry is prepared to be ready for the upcoming AEC.

“RSPO audits ensure that our group is able to achieve a higher yield of approximately 4 metric tons per 1,600 Square meters as a result of better knowledge of more robust farm management practices, proper planning and correct usage of fertilizer. The importance of RSPO benefits is to help reduce costs and increase palm oil product to gain more income,” Mr.Chaowalit said.

As a not-for-profit association, the RSPO unites stakeholders from the seven sectors of the palm oil industry, namely oil palm producers, processors or traders, consumer goods manufacturers, retailers, banks/investors, environmental and social non-governmental organizations, to develop and implement global standards for sustainable palm oil. These standards are based on economic, social and environmental principles. For economic benefits at the national level, investments in renewable energy by the public sector are important in helping drive energy security. For environmental benefits, RSPO is a long-term development strategy which adapts sustainability principles and encourages proper land use, non-deforestation and reduction in CO2 emissions. For social benefits, RSPO provides new knowledge for farmers that can contribute towards business development and strengthening relations between palm growers and mills by sharing the same standard of management practices.

Mr. Sanin shared with the farmers during the certification ceremony, “We hope this project will set the standard for Thailand’s palm oil industry to coordinate and drive its growth in a sustainable industry way, especially to expand to more small holders to achieve RSPO certification which will help drive up the percentage of smallholders RSPO certification in Thailand. This ultimately will help palm oil products to compete in the global market and help smallholders increase their personal income and have a good quality of life through increased profits and better environmental practices.”

For media enquiries, please contact:

Bongkod Paebunyong

General Manager- Communications and Corporate Affairs

Shell Thailand Ltd.

Tel:+662 262 6389

E: bongkod.paebunyong@shell.com

Wasinee Ratanaprug

Associate Director

Hill+ Knowlton Strategies Thailand

Tel:+662 627 3501 ext. 133

E: WRatanaprug@hkstrategies.com