High Carbon Stock (HCS) Science Studyand its implications for the

Malaysian Oil Palm Industry

A presentation to theRAISE MEOA SEMINAR

11th August 2015

S. ParamananthanB.Sc., (Hon), Dip. Trop. Agron., D.Sc.,

FIGM, FMSSS, FISP, FAScPARAM AGRICULTURAL SOIL SURVEYS (M) SDN. BHD.

SUSTAINABLE PALM OIL MANIFESTO

Initiators : Asian AgriIOI Corporation BerhadKuala Lumpur Kepong BerhadMusim Mas GroupSime Darby Plantation

CargillUnilever

Apical Group

Wilmar InternationalGreenpeace

STEERING COMMITTEE

Source: http://www.carbonstockstudy.com/Structure/The-Steering-Committee

Note- All Steering Committee Members agreed to: Stop all new plantings on potential HCS areas Implement its principal recommendations

HIGH CARBON STOCK STUDYDRAFT SYNTHESIS REPORT

John RaisonThe Mullion Group, Canberra

Philippa AtkinsonIndependent author, consultant and researcher in Liberia

Jerome Chave Laboratoire Evolution et Diversité Biologique, Toulouse

Ruth DeFriesColumbia University, New York

Goh Kah JooApplied Agricultural Resources Sdn Bhd, Malaysia

Hans JoostenUniversity of Greifswald, Greifswald

Peter NavratilRemote Sensing Solutions, GmbH, Munich

Florian Siegert Ludwig-Maximilians-Universität München, Munich

Authors:

Released for Public Comment1st June to 31st July 2015

BACKGROUNDAgus, et. al., 2013: - Indonesia / Malaysia / Papua New

Guinea

Gunarso, et. al., 2013:

Land conversion Oil Plam 20% of GHGs

Oil Palm Development

- Must be sustainable- Eradicate poverty

Meet United Nations (2015) sustainable Development Goal

Natural ForestLogging,Forest Fires,and Others

Degraded Forest

Oil Palm Plantations

6

PAST / PRESENT APPROACHES

Improved Sustainability

of Oil Palm

Best Management Practices (BMPs)

Roundtable for Sustainable Oil Palm (RSPO)

Free Prior and informed consent (FPIC)

New Players: Indonesian Sustainable Palm Oil (ISPO) Malaysian Sustainable Palm Oil (MSPO) Other Certification Schemes

PAST / PRESENT APPROACHESHCS APPROACH – Proposed by GAR/TFT/GP (2012, 2013)

- Golden Agri Resources - PT SMART- The Forest Trust - Green Peace

Note: - This study aims to conserve as much forests as possible- Uses HCS Threshold of 40tC/ha- All vegetation that is NOT scrub or grassland should be conserved- Used in fragmented forests

RECENT DEVELOPMENT ISSUES

Roundtable for Sustainable Palm Oil: (RSPO)o Global not for profito Multi-stakeholders initiativeo Transform the oil palm markets by making sustainable

palm oil the normo Over 2000 members

RSPO Criterion 5Estates must regularly report mitigation measuresRSPO Criterion 7New planting must meet criteriao Deforestation and GHG Emissionso No Peat Developmento Focus more on conservation

OTHER NEW DEVELOPMENTS

Indonesian Sustainable Palm Oil(ISPO)

Malaysian Sustainable Palm Oil(MSPO)

Can they be = RSPO or RSPO+

DEFINITIONSo Free, prior and informed consento A community has the right to give OR

withhold its consent to a proposed project

o High Conservation Value: - Biological, Ecological, Social & Cultural

o Roundtable for Sustainable Palm Oil:- Certified Palm Oil

o Developments that meets the needs of the present without compromising the need of future generations

RSPO

SUSTAINABLE DEVELOPMENT

HCV

FPIC

FOREST DEFINITIONS

UNFCCC – United Nations Framework Convention on Climate Changeo Forest can have very low carbon stocko Young natural stands and all plantations which have yet to reach a

crown density of 10-30% OR tree height of 2-5 meterso Areas normally forming part of the forests which are temporarily

unstocked due to human intervention or natural causeso Conversion of old growth forest to oil palm is not deforestation.

i.e., OK to plant oil palm

Forest definitions differs between agencies:

FAO – Food and Agriculture Organisation Excludes stands of trees established primarily for agricultural production, and oil palm is ‘non-forest plantations’, but rubber wood plantations are OK, but rubber cannot be converted to oil palm

CARBON STOCK = BIOMASS

Above Ground Vegetation (AGB)

Below Ground Vegetation (BGB)

(Soil Peat)

Total Carbon StockHCS + looks at Carbon Stock

Not Emissions But Potential Emission

SOILS: Sandy Soils = <100 tC/haDeep Peat = Many Thousands tC/ha

HCS+ METHODOLOGYo Differs from the GAR / TFT / GP - HCS Approach o Does not apply strict definitions of “Forest”o Forests can have different carbon stockso Uses Carbon Stock to define plantable areas

Approximate range of carbon stocks held in biomass (AGB) andsoil carbon (BGB) in tropical forests.

HCS+ METHODOLOGY (continued)Provides an approach how to use socio-economic factors when

balancing GHG Emissions with local development impacts

Example of how changing the threshold for agreed levels of C emissions from biomass and soils can markedly affect the area of land potentially available for development.

HCS+ METHODOLOGY (continued)

Contrasting relationships between the area of forest land converted, and total GHG emissions.

HCS+ METHODOLOGY (continued)o Uses information on potential GHG Emissionso Socio-economic impacts of applying different emission levelso Work with RSPO, who are currently further developing these approaches to GHG Emissions in oil palm sectoro Biodiversity NOT fully used, except in forests with high carbon stocks

HCS+ METHODOLOGY (continued)

o HCS+ only concerned with GHG Emissions within CONCESSIONo Does not consider

N2O emissions from fertilizersCH4 emissions from processingCO2 emissions from transport

Occurs in all plantationsDo not help

differentiate in choice of land to be developed

o Emissions only considered first 25 years cycleo Emissions can be expressed per unit of land areao OR per ton of oil produced

If per ton of oil used – productivity of the land is accounted for. Highly productive land may have greater emissions/ha,

But lower lower emissions/t oil produced

DECISION PROCESSSETTING THRESHOLD FOR CARBON EMISSION

o High Emissionse.g., Peatlands – Regardless of depth

o High biomass forestso Off-setting not allowed

C stock >230-420tC/ha

o Important Socio-benefitso Small adverse increase in impacto Can be off-set by additional storage of Carbon in forests outsideo Purchase of Carbon Credits

o Degraded land with low Carbon Stocke.g., Grassland / Scrub land

Notes: Forests after selective logging contain ⅔ of original Carbon ABG >100tC/haABG >100tC/ha = Total Biomass >150tC/ha (includes roots, stumps, fallen logs)Old growth forest = 230-420tC/ha

FRAMEWORK FOR BALANCING THE CLIMATIC AND SOCIO-ECONOMIC EFFECTS

SOCIO-ECONOMICS ASPECTS

o Abide by FPIC processo Ensure equitable benefit/sharing

- Access to local communities/amenities- Fair wages/compensation- Pursue favorable models

o Develop additional capacity within company

COMPANIES:

All above recommendations apply to all new developments

KEY STEPS IN IMPLIMENTING

HCS+ METHODOLOGYMap Vegetation/Land use

High resolution Remote-Sensing – e.g., Rapid-eye

Map/Estimate Above Ground Biomass (ABG)Calibrated-LIDAR (> 0.25ha accuracy)

Map soil typesEstimate below group Carbon Stock - Terrain/Vegetation/Ground survey/Locate peat/HCS areas

Map/Estimate Potential GHG Emission (Soil + Biomass) for making land use decisions

Map areas potentially available for conservation under different GHG Thresholds75 tC AGB, 75 tC BGB, 100 tC ABG

Produce refined map indicating land available for development

Map of Oil Palm Concession- Land use cover/Land use- Hydrological catchments

- Adjacent conservation areas- Forest/Agriculture/Roads/Settlements/Infrastructures

Map of potential land available for developmentor retention as forest

CRITICAL INPUTS AND PROCESSREQUIRED FOR LAND USE DECISION

Note: 1) LIDAR provides accurate estimates of spatial distribution of AGB at a concession sizes of 5,000 – 50,000 ha (Cost: USD 5 – 15/ha)2) Data Elevation Model (DEM) for slope analysis can be derived form LIDAR

- Drainage pattern- Erosion risk and etc.

OVERVIEW AND COST OF REMOTE SENSING PRODUCTS

Overview Cost

IMPLICATIONS FOR MALAYSIA1) No new areas of peat can be developed.

Question: Why are temperate peats being used/mined ?2) All proposed development MUST follow the HCS+ plan.

Plan looks at Carbon Stocks to determine if an area can be developed to oil palm.

3) Exercise will be costly as LIDAR Technology/Soil mapping must be done.Question: Do we have to use foreign experts to do this? Can

Government/Remote Sensing Institute/MPOB provide this data free/discounted rate to Malaysian Estates ?

Question: Does this exercise infringe on National Security ? Carbon Stock does not reflect Emissions.

4) Malaysia already agreed to keep the 50% Forests we have.Holland has 10% of forest Why not these countriesU.K. has 20% of forest reforest to 50% also ?

5) Malaysia/Indonesia should ban buying of Carbon Credits by developed nations.

MORE QUESTIONSIPCC Global Threshold of 40tC/ha unfair to Tropical Countries

Stephens, et. al., (1984)Estimate that a subsidence rate of 3cm/year in the Everglades should be equal to 8 cm/year in Tropics due to different temperature. i.e., Subsidence rate hence GHG Measurements.(Low) Boreal/Temperate Tropics (High) 2.7 times higher

1) Tropical Countries (hot throughout the year) - Give out more CO2/ha/yr compared to temperate countries - Replace the Carbon Stock faster than temperate countries

2) 75 tC/ha Carbon Stock How much GHG Emission.

Paramananthan. S., 2005

3) Soybean/Rapeseed/Sunflowers produce 0.6 – 1t oil/ha/yrOil Palm 4 – 6t oil/ha/yr

What happens when in 2050 World population reaches 9.0 Billion,

We need additional 29 Million ton /year (12kg Vegetable oil per head)

MORE QUESTIONSVegetable Oil Demand

To produce this we require:Oil Palm: Current yield 8 million ha of new planting

Best Yields 5.8 million ha

Rapeseed: 50 million ha Soybean: 75 million ha

CASE FOR SARAWAK

Chief Minister

o No new approvals for logging and plantationso Land already alienated mostly NCR lando No more new land alienation in peat areaso Existing alienated land can be plantedo Peninsula/Sabah and Sarawak – Malaysia will

NOT having new alienation on peato HCS Study no longer applicable in Malaysia

CONCLUSIONSo Default values for tropics should be 2.7 times that for

temperate areaso Cut-off of 75 tC/ha is too low for tropicso Will be expensive for companies to do study, unless

Government helpso Land is STATE matter, and Federal Government has

little say – can only recommendo Malaysia has committed to retain our 50% forestso Temperate/Developed countries should do the same

(retain 50% of forest)o New peat classification MSPO’s implication

Oil Palm oWhat do we do in 2050 Rapeseed

Soybean

THANK YOU