100% CSPO IN EUROPE BY 2020

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Petra Meekers

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Jan Maarten Dros

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Issue Group 1) How can the European market support inclusion of palm oil smallholders in the supply chain?

Christine Schneider, Henkel

Palm oil and Henkel

100% CSPO IN EUROPE BY 2020

An overview of our use of PO and PKO based derivatives

Small, indirect user

Mostly PKO derivatives

Global use

80%

of oil produced worldwide

PKO based derivatives (the majority is used for surfactants); one third is PO based derivatives

outside of Germany

Palm oil and Henkel

100% CSPO IN EUROPE BY 2020

Our 2020 commitments Vision: ensuring that all palm and palm kernel oil that we purchase is being cultivated sustainably

2003 1. Zero net deforestation 2. Full traceability 3. Physical progress in our value chain

4. Increased supply of sustainable oil

…

2020 Oils that we use should not contribute to deforestation of primary or secondary forests with significant ecological value, including “high carbon stock” forests and peat lands. We are working with our partners to establish full traceability of palm and palm kernel oils used in ingredients for our products, such as surfactants, by 2020. Ensure that a significant amount of the oil that we consume is mass balance-certified in 2015, and increase our purchase of mass balance-certified oils to cover 100% of our demand by 2020. Our goal is to increase the supply of sustainable oil available on the market by a volume equal to Henkel’s demand in 2020.

Increasing the supply of sustainable oil through support of smallholders

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Our goal

Targeted support

Specific benefits

We will increase the supply of sustainable oil available on the market by a volume equal to our demand in 2020

In 2013 Henkel, Solidaridad, WWF and other partners started a smallholder project in Honduras

Smallholder projects:

We aim to increase our targeted support for smallholders in the future

•

Increase productivity on existing plantations • •

Improve livelihoods Increase the supply of sustainable oil •

Reduce pressure on forests

Additional steps needed: driving physical progress

100% CSPO IN EUROPE BY 2020

Henkel Laundry & Home Care, Solidaridad, WWF and partners started a program in Honduras to improve the livelihoods of 7,500 small farmers

Call for additional partners 2015 to 2019

100% CSPO IN EUROPE BY 2020

Solidaridad Project West-Kalimantan, Indonesia

• Credit Union Keling Kumang • Next phase Farmer Field Schools • Training of champions who will act as multiplier • 2,400 farmers covering 4,800 ha • Upscaling to complete area in scope: 11,200 ha • Contact Marieke Leegwater, Program Manager Palm Oil Solidaridad

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Issue Group 1 - how can the European market support inclusion of palm oil smallholders? • What are the main challenges • How can we help the smallholders Amsterdam, June 3rd 2015 Sietse Buisman Cargill B.V. Refined Oils Europe

Two major challenges

100% CSPO IN EUROPE BY 2020

• Smallholder risk to be excluded from the supply chain when non RSPO certified • Cost – high investment versus sustainability premium

Risk of exclusion of FFB supply to a Mill

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• Example : Mill process 50.000 mt CPO from own estate + 10% supply by Smallholders • When own estate will be SG RSPO Certified and Smallholders will remain with supply of classic FFB and the Mill cannot process the smallholder supply segregated from own certified FFB the Mill will have the option to market the certified volume on MB basis. • With average sustainability premium for SG 25 USD and 15 for MB • The cost for the Mill to downgrade will be USD 500.000 when smallholder supply will remain included in the supply chain.

High costs for RSPO certification for smallholder

100% CSPO IN EUROPE BY 2020

• Investment costs for certification are >USD 1.OOO,-- per SH • Visit in January smallholders in Colombia with 7,5 to 10 Ha • Yield per Ha from 5 to 10 mt FFB • = 37,5 to max 100 tons of FFB = max 20 mt CPO equivalent With average 15 mt cpo production the sustainability premium will be usd 375,-- for the whole value chain to EU of which x % will be for the smallholder.

How can we help the smallholders 100% CSPO IN EUROPE BY 2020

• Financial support during certification process • Differentiation in sustainability premium

On behalf of the smallholders

100% CSPO IN EUROPE BY 2020

Thank You

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Closing gaps in sustainability Jorge Coronel

Ecuador - palm oil sector

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• 280.000 hectares (2013). • 7.000 palm oil growers. • 87,1% are smallholders (less than 50 hectares - family based production).

National Association of Palm Oil Growers 100% CSPO IN EUROPE BY 2020 • ANCUPA was created in 1970 (44 years). • ANCUPA associate around 70% of the palm oil growers and mills nationwide. • Provides services and support in: Scientific Research, Technology and Knowledge Transfer, Environmental Best Practices, RSPO, etc.

Introduction

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• We are dealing with two different realities:

TOPICS

PRODUCER

CONSUMER

Forests

Possible land that could be transformed in a plantation

No deforestation

Agrochemicals

Protect my plantation and investment

Are toxic

Economics

I want to be more paid

I don’t want to pay more

What we are doing as ANCUPA?

100% CSPO IN EUROPE BY 2020

• We motivate palm oil growers, mills and so on to implement agricultural and environmental best practices. • Capacitate palm oil growers. • Facilitate complying the environmental, labour laws, etc.

What we could do?

100% CSPO IN EUROPE BY 2020

1. Work TOGETHER towards sustainability.  Learn more about the two worlds (PRODUCERS & CONSUMERS). 2. Work on SHARE VALUE initiatives to comply with the RSPO P&C.  Developed projects where the two worlds are involved.

What we could do?

100% CSPO IN EUROPE BY 2020

3. General issues that palm oil growers are concern:  CSPO is better paid?.  What are the costs to comply with the RSPO P&C?  Implementing the RSPO P&C, productivity, how much?, etc…

really

increase

the

100% CSPO IN EUROPE BY 2020

THANK YOU Jorge Coronel [email protected]

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