New Multi-Stakeholder Alliance Being Setup to Boost Value of MSPO Certification
Johari Urges Palm Oil Industry to Support Biofuel Initiative
Palm Oil – The Unsung Gentleman of Global Sustainability
IN THE HOT SEAT
MPOB Scaling New Frontiers under the Leadership of DirectorGeneral Datuk Dr. Ahmad Parveez Ghulam Kadir
6/25/2025 12:51:30 AM
Thank you for the continued trust and readership you've shown as we bring you another edition of Asia Palm Oil Magazine. Our previous issue sparked valuable conversations across the industry—especially on topics like EUDR readiness, digital tools for smallholders, and the shifting dynamics of global trade. The positive engagement from our community reinforces the importance of staying informed and connected as the palm oil landscape evolves.
In this July–September issue, we take those discussions further with fresh perspectives and timely features. One of the standout highlights is our In the Hot Seat interview with Datuk Dr. Ahmad Parveez Ghulam Kadir, Director-General of the Malaysian Palm Oil Board (MPOB). In this exclusive conversation, he shares how MPOB is scaling new frontiers—from driving innovation and research to strengthening Malaysia’s competitive edge in sustainable palm oil.
This edition also explores updates on traceability technologies, emerging regulations, and efforts to future-proof the industry against environmental and market pressures.
We hope you find this issue insightful, practical, and forward-looking—as always, crafted to support your work and ambitions in this vital industry.
Susan Tricia Editor
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Palm Oil – The Unsung Gentleman of Global Sustainability
GREEN SOLUTIONS
22 - POMEVap Technology – A Sustainable Way of Treating Palm Oil Mill Effluent (POME)
24 - Dutch Firm’s Pilot Plant in Kuantan Turns Palm Oil Waste into Renewable Energy
28 - Johari Urges Palm Oil Industry to Support Biofuel Initiative
30 - Nextgreen Taps Palm Oil Biomass for Pulp, Papert
32 - Sabah To Develop Green, Blue Economies for Sustainable Future
> IN THE HOT SEAT
36 - MPOB Scaling New Frontiers under the Leadership of Director-General Datuk Dr. Ahmad Parveez Ghulam Kadir
> TECHNOLOGY AND PRODUCT NEWS
44 - Indonesia To Use African Weevils to Spur Oil Palm Output
46 - Sumisaujana Group Branches into Specialty Chemicals Industry
> SPECIAL INSIGHT
48 - India: A Growth Frontier for Sustainable Palm Oil by Dr. Puah Chiew Wei
52 - Palm Oil – The Unsung Gentleman of Global Sustainability
54 - Pondering Vegetable Oils from Nutrition and Health Sides
58 - The RM42bil Oil Palm Replanting Conundrum
34 - Plantation Ministry Prioritises Aid for Smallholders Affected by Bagworm Infestation
New Multi-Stakeholder Alliance Being Setup to Boost Value of MSPO Certification
The Malaysian Sustainable Palm Oil (MSPO) is establishing the MSPO Impact Alliance, a multi-stakeholder platform that extends the value of certification, by the third quarter this year.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the platform was designed to explore and test innovative models that enhance the certification
“Through collaboration with non-governmental organisations, accreditation bodies, financiers, technology partners pand multinational fast-moving consumer goods companies, the Alliance will enable MSPO to pilot ideas such as green financing for certified producers, digitised traceability solutions, deforestation monitoring tools and inclusive sourcing incentives for smallholders,” he said at the memorandum of understanding (MoU) signing between MSPO and Nestle Malaysia today.
The minister said the Alliance will also focus on practical solutions including traceability for smallholders, tools for social compliance, preparation for emerging regulations like the European Union Deforestation Regulation, and joint efforts to demonstrate impact.
“I am pleased to welcome Nestle Malaysia as one of the founding members of this Alliance. Today’s MoU serves as a precursor to its official launch, and a clear example of how global brands and national systems can move forward together with purpose and shared accountability,” he added.
Additionally, Nestle Malaysia and the MSPO Certification Scheme signed an MoU to collaborate in efforts that promote responsible palm oil sourcing.
The collaboration combines MSPO’s inclusive national certification framework with Nestlé Malaysia’s commitment to responsible procurement and global sourcing experience.
The collaboration also supports the rollout of the MSPO Strategic Plan 2024–2026, including the implementation of MSPO 2.0 from Jan 1, 2025.
Johari said the MoU focuses on practical action through improving traceability, strengthening responsible labour practices, empowering smallholders with knowledge and resources, and aligning with global standards.
The Malaysian Sustainable Palm Oil (MSPO) is establishing the MSPO Impact Alliance, a multi-stakeholder platform that extends the value of certification, by the third quarter this year. NSTP/ SAIFULLIZAN TAMADI
“Partnerships such as the one we are formalising today offer mutual benefits to both parties. Nestlé Malaysia brings global experience, market visibility and a proven commitment to ESG principles.
“In turn, MSPO provides a credible, nationally-mandated standard that is increasingly aligned with international norms.
“Thus, ensuring Malaysian palm oil remains synonymous with responsibility and quality,” he said, adding that the MSPO is now officially listed on the International Trade Centre Standards Map.
MSPO’s inclusion in the standard’s mal means global buyers and sourcing teams can now evaluate MSPO using globally accepted benchmarks.
MSPO chairman Haris Arshad said the MoU outlines a clear alignment between two important parts of the supply chain, and a reflects a joint commitment to work together on practical areas that matter.
“It is also about strengthening a shared purpose between government, industry, and global partners to shape a palm oil sector that is responsible, inclusive, one that protects livelihoods, respects the environment, and meets the standards the world expects.
“As chairman of MSPO, and someone involved in day-today industry operations at SD Guthrie, I can say that this partnership comes at a time when clarity and coordination are more important than ever,” he said in his welcome remarks at the signing ceremony.
He added that demand for responsibly produced palm oil is growing as buyers are looking for products that come with traceability, fair labour practices as well as credible certification.
“More and more, they are turning to MSPO to meet those expectations. There is also broader recognition now of what MSPO brings to the table.
“It’s a national standard backed by government, independently audited, and designed to include the full range of producers, from the largest estates to smallholders. That wide coverage is what gives MSPO real value, both domestically and internationally,” he said.
Nestle Malaysia chief executive officer Juan Aranols said certification schemes like MSPO play a critical role in making sustainability more accessible and beneficial to smallholders.
“By working together, we can create inclusive models that support smallholder participation in sustainable value chains while maintaining Malaysia’s competitive edge in the global palm oil market,” he said in his speech.
Aranols added that as part of its ESG agenda, all of Nestle’s palm oil and palm oil-based products are RSPO certified.
Nestle also achieved 100 per cent deforestation-free palm oil sourcing, reinforcing its commitment to environmental protection and responsible land use.
“At the heart of this are smallholder farmers, whose livelihoods we are committed to enhance by providing them with the right knowledge and resources. By empowering them to adopt responsible agricultural practices, we ensure both their long-term economic sustainability and the protection of the environment,” added Aranols.
India Starts Raising Palm Oil Buying as Prices Fall Below Soyoil
India has started raising palm oil purchases after a lull of five months as a correction in prices has made the tropical oil cheaper than rival soyoil, encouraging refiners to place orders to replenish inventories, four dealers told Reuters.
Higher purchases by India, the world’s biggest buyer of palm oil, will support benchmark Malaysian palm oil futures, which have fallen nearly 10 per cent so far in 2025.
A worker checks a fresh fruit bunch of oil palm
Crude palm oil (CPO) is currently being offered at about $1,050 a ton, including cost, insurance and freight (CIF), in India for May delivery, compared to around $1,100 for crude soyoil, dealers said.
Indian buyers started trimming purchases from December as palm oil’s premium over soyoil jumped above $100.
India imported 1.57 million tons of palm oil from December to March. Shipments for April are expected to be around 350,000 tons, bringing the average monthly imports for the five-month period to 384,712 tons.
India imported an average of more than 750,000 tons of palm oil each month during the marketing year that ended in October 2024, said the Solvent Extractors’ Association of India, which is set to publish its April import data by mid-May.
The country’s palm oil imports are likely to rise above 500,000 tons in May and exceed 600,000 tons in June. From July to September, the monthly average could be more than 700,000 tons, dealers said.
Stocks in India have depleted due to lower-than-normal imports over the past five months, and now refiners need to increase imports to replenish them, said Rajesh Patel, managing partner at GGN Research, an edible oil trader.
“Indians had pulled back on buying palm oil because it was too pricey. But now that it’s cheaper than soyoil, refiners are placing orders,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
India buys palm oil mainly from Indonesia and Malaysia, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
FILE PHOTO:
during harvest at a palm oil plantation in Khammam district in southern state of Telangana, India, July 12, 2022. REUTERS/ Rajendra Jadhav/File Photo
Indonesia Rethinks Palm Oil Game
as Smallholders Brace for US Tariff Fallout
Indonesian palm oil companies are seeking new markets in Europe, Africa and the Middle East as they try to protect themselves from the impact of Donald Trump’s trade war, a top industry executive told AFP.
Indonesia is the world’s biggest producer of the edible oil — used in making foods such as cakes, chocolate, and margarine as well as cosmetics, soap and shampoo — and accounts for more than half the global supply.
But the 32 per cent tariffs imposed on the country make it one of Asia’s hardest hit by the US president’s sweeping measures that have sent shockwaves around the world.
Palm oil is one of Indonesia’s biggest exports to the United States, and while Trump has announced a 90-day pause on implementing the levies, producers say the uncertainty is forcing them to look elsewhere to earn their keep.
“It actually gives time for us to negotiate... so products can still enter there. I think this is very good,” said Eddy Martono, chairman of the Indonesian Palm Oil Association (GAPKI) on Thursday.
However, he warned that market diversification “must still be done” to avoid the impact of the tariffs if they come into force later in the year, adding that firms would look to Africa — specifically top importer Egypt — the Middle East, Central Asia and Eastern Europe.
“We should not just depend on traditional markets. We will continue to do it. We have to do that,” he said.
Exports of palm oil products to the United States have steadily grown in recent years, with Indonesia shipping 2.5 million tons in 2023, compared with 1.5 million tons in 2020, according to GAPKI data.
Eddy called on Jakarta to keep its dominance in that market through talks, particularly as rival palm oil producer Malaysia was hit with lower tariffs.
“Indonesian palm oil market share in the United States is 89 per cent, very high. This is what we must maintain,” he said.
According to Indonesian government data, the United States was the fourth-largest importer of palm oil in 2023, behind China, India and Pakistan.
Smallholder Pain
But Eddy remained confident the US would still need Indonesian palm oil if no deal was sealed when the 90 days are up.
“It is still a necessity for the food industry. I believe our exports to the US will slightly decline or at least stagnate,” he said.
“Those who are harmed first are consumers in America because their main food industry products need palm oil.”
Indonesian Finance Minister Sri Mulyani said at an economic meeting Tuesday that she would lower a crude palm oil export tax, alleviating some of the pain.
While Eddy welcomed the move, saying it would make Indonesia’s palm oil exports more competitive, for the country’s 2.5 million palm oil smallholder farmers, the threatened tariffs were worrying.
Mansuetus Darto, the national council chairman of the Palm Oil Farmers Union (SPKS) said the measures would have had a far-reaching impact if a deal wasn’t struck.
“The raw material of the palm oil will pile up and then farmers cannot harvest anymore because of overcapacity in existing plants,” he said before the pause was announced.
President Prabowo Subianto opted for a path of negotiation with Washington instead of retaliation and will send a highlevel delegation later this month.
While Trump took aim at Indonesia’s billion-dollar trade surplus with the United States, Prabowo said his threatened levies may have done Indonesia a favour by “forcing” it to be more efficient.
Chief economic minister Airlangga Hartarto also said Jakarta would buy more products such as liquefied natural gas and liquefied petroleum gas to close the gap with the world’s biggest economy.
That has given hope to the industry that a deal with Trump can be done, otherwise they will be forced to turn elsewhere.
“There is still time,” said Mansuetus after the pause was announced.
“The government should prepare to negotiate as best as possible with the US government.” — AFP
Indonesian palm oil companies are seeking new markets in Europe, Africa and the Middle East as they try to protect themselves from the impact of Donald Trump’s trade war, a top industry executive told AFP. — AFP pic
Minimal Impact of US Tariffs on Sabah’s Trade, Says Former CM
Sabah’s direct exports to the United States are so minimal that the tariffs of 24 per cent on Malaysian exports to America hardly affect Sabah’s international trade, said former chief minister Datuk Seri Yong Teck Lee.
He pointed out that Sabah’s main exports consist of oil and gas, palm oil and palm products, wood products, seafood, silica sand, and food products, most of which go to North-East Asian countries (China, Japan, Korea) as well as India, Europe, Asean countries, and Peninsular Malaysia.
Sabah’s estimated direct export of goods to the US for this year (2025) is estimated to be around 1 per cent of Sabah’s total exports (that is, only about RM1 billions of Sabah’s RM100 billion).
Sabah’s exports to the US consist mainly of oil and gas, wood products and palm oil. It was only recently that Sabah began exporting an increasing amount of copper foil to the US.
As it so happened, the good news for Sabah is that the copper (and some wood products) are two of the few items that are exempted from the new tariffs (called reciprocal tariffs). Hence, Sabah’s exports of copper foil and some wood products are not affected by the so-called US president Donald Trump tariffs.
As for the tariffs on palm oil, Yong said the amount of palm oil exported to the US is only a tiny portion of Sabah’s total export of palm oil and palm products (total estimated at RM20 billion for year 2025).
“Most of Sabah’s palm oil and palm products are exported to China, India, Europe (especially Holland). It follows, therefore, that it is not an insurmountable task for Sabah’s palm oil exporters to divert their palm oil away from the US market to other major buyers (importers) of our palm oil. What Sabah’s oil palm sector also needs to do is to have a stable price of fertilisers, reliable labour in oil palm plantations, and improvements to local infrastructure and logistics in order to increase the productivity of the palm oil industry.
“However, if the global trade war caused by the Trump tariffs seriously slow down the economies of Peninsular Malaysia, Asean countries, China, Japan, India and Europe (Sabah’s main trading partners), then it is obvious that Sabah’s economy will consequently be impacted because of the reduced purchasing power of the buyers (importers) of Sabah’s exports,” he said in a statement today.
Yong, who is the president of Sabah Progressive Party (SAPP), added the possibility of Sabah government losing revenues caused by the drop in global oil prices can be compensated by Petronas increasing production in line with what OPEC+ (Organisation of Petroleum Exporting Countries Plus) has done two days ago (increasing their production by 411,000 barrels per day).
In any case, OPEC has noted that the world demand for oil and gas remains stable with strong fundamentals.
As a matter of concern in Peninsular Malaysia, it is the economies of Penang and Selangor that are likely to be impacted by the new US tariffs because these two states host huge American and other foreign investments on high-tech industries, some of which might decide to relocate back to the US. The relocation of industrial production to the US is a key objective of the Trump tariffs in order to bring back to the US the manufacturing and industrial productive capacity that the US has lost to other countries over the last 30 years of globalisation, he said.
“Being part of the wider Regional Comprehensive Economic Partnership (RCEP), which is the world’s biggest trading bloc that encompasses Asean and China, Japan, Korea, Australia and New Zealand, Malaysia continues to enjoy relatively low tariffs with most of our trading partners. That is why the Trump tariffs have minimal impact on Sabah’s international trade and the local economy,” said Yong.
Yesterday, State Finance Minister Datuk Seri Masidi Manjun said Sabah expects to be heavily impacted after Malaysia was recently hit with a 24 per cent reciprocal tariff by the US.
Masidi highlighted that both the market and prices have tumbled since Trump’s recent sweeping tariffs, noting that the prices have fallen beyond US$70 per barrel, which is “a major concern for Malaysia”. — The Borneo Post
Palm Firms Regularly Replant, But Smallholders See Hurdles
Palm oil companies under the Indonesian Palm Oil Association (GAPKI) have regularly implemented replanting program on around 4 – 5 percent of their total plantations, which are no longer productive due to their age of more than 25 years. The replanting is seen as a necessary step to increase or at least maintain the productivity and sustainability of palm plantations.
GAPKI Chairman Eddy Martono said that replanting is a must for the palm oil companies to maintain their production and financial performances. “Without replanting, their production will certainly drop. So, palm companies will have to conduct replanting program regularly every year to maintain their operational performances and to prevent any untowards from affecting their financial performances,” Eddy Martono said after addressing the national conference of the Association of Indonesian Nucleus – Plasma Plantations (Aspekpir) 2025 with the theme “Strengthening Partnerships of Nucleus – Plasma Palm Plantations In Realizing Food, Energy Resilience Toward Golden Indonesia 2045”, in Jakarta on Tuesday (29/4/2025).
GAPKI groups 731 palm oil companies operating in Indonesia. Based on data from Statistics Indonesia (BPS) in 2023 there were 2,466 palm oil companies operating in 26 provinces of Indonesia, mostly in Sumatera, Kalimantan and Sulawesi. BPS reported that Indonesia has a total 16,8 million hectares of oil palm plantations, of which around 9.0 million hectares are owned by private companies, 550,333 hectares by state-owned companies (PTPN) and around 6.1 million hectares owned by smallholders, and the rest were being verified.
But Eddy said that there are a number of palm companies reluctant to implement replanting despite their oil palm trees are already old, exceeding productive age of 25 years. “But they will finally realize that despite intensive efforts of fertilizing the old palm trees, their production will stay low, far below expectation. So then they will finally see that there is no avoiding of replanting,” he said.
During the occasion, Eddy Martono also highlighted the factors that hindered the implementation of the government’s replanting program for palm smallholders’ plantations. “Under the replanting program, the government targets to replant 180,000 hectares of smallholders’ plantations per year. But in 2024, only 38,244 hectares were realized,” he said.
Eddy said that since September 2024 the government has increased the replanting fund provided for smallholders from Rp30 million per hectare to Rp60 million per hectare. “But apparently the smallholders are still facing a number of problems in joining the replanting program. Besides their reluctant to replant because the palm oil price is still high, other factors include their legal status as many of them are found encroaching forests, administrative problems, technical problems, partnership problem, and other licensing problems,” he said.
According to him, in 2025 the implementation of replanting is still slow. “Despite some improvements, the implementation of replanting program is still slow. During the first quarter this year only 11,777 hectares had been realized. As a result , the government has revised down the target of replanting in 2025 from 180,000 Ha to 120,000 Ha. Seemingly, it’s difficult to realize the revised target this year,” Eddy said.
Eddy admitted that when subjected to replanting program, the smallholders will be facing a period of no income from their plantations. “Smallholders will have to wait 2.5 years before their new palm trees start producing fresh fruit bunches (FFB). But surely, their productivity will be much higher than before. Without replanting their plantations can only produce FFB below 10 tons per hectare. But after replanting they can get 14 tons per hectare. It’s good for them in long term,” he said.
Chairman of Indonesian Nucleus – Plasma Oil Palm Smallholders (Aspekpir Indonesia), Setiono said they are trying to accelerate the implementation of replanting for their member smallholders by strengthening partnerships between palm companies and smallholders who operate plasma plantations (nucleus – plasma plantations).
According to Setiono, the palm oil industries need mutually beneficial partnerships. “Without partnerships, smallholders will be facing problems, including in replanting and guarantee of FFB prices. But we also need the government to supervise the partnerships. We need supervision to ensure that there will be no sides, either smallholders or companies who only want to seek profit for themselves, without paying attention to their partners,” Setiono said.
He said that the partnership scheme of nucleus – people’s plasma plantations (PIR) can be made as a national example. The partnership scheme has proven to be able to increase the welfare of oil palm smallholders. “PIR has been well implemented since 1978. Initially, we have nothing. But through PIR partnerships our income reaches higher and our welfare has been much improved. It’s far different from the profit sharing scheme, which is unclear until now. Farmers could not repay their debts as their income below expectation,” he said.
Eddy underlined the importance of accelerating the implementation of replanting programs to increase Indonensia’s production of palm oil. “We’ve seen our palm oil production stagnant, and even tends to decline during the last five years. By accelerating the replanting program we can raise our national production. That way we can keep fulfilling the national and global demands that have been continually rising ,” Eddy said.
Uganda Keen To Tap Malaysia’s Expertise In Palm Oil Industry
Uganda’s journey in palm oil is just beginning and the republic is keen on tapping Malaysian expertise in cultivation and development of the commodity, Minister of Energy and Mineral Development Ruth Nankabirwa Ssentamu said.
“We have only recently started planting oil palm trees, and it is still in its early stages. But when you fly into Malaysia, it is an entirely different story. Oil palms almost entirely dominate the landscape. It is hard to comprehend the scale of it until you see it first-hand.
“What is the story behind Malaysia’s success with palm oil? How did they get to where they are today?
“My minister of agriculture is here with us, and it is a conversation we need to have, because there is much we can learn from Malaysia’s experience,” she told reporters at the Uganda Pearl of Africa Business Forum and Expo 2025 today.
Uganda is inviting investors from Malaysia to establish partnerships and tap into various resources in the African country, particularly in agriculture, tourism, science, technology and digital transformation.
Ruth Nankabirwa said Uganda sees significant potential for collaboration with Malaysia, particularly in the mineral development sector.
She said Malaysia has already begun mineral extraction, and there are opportunities for both countries to share experiences and strategies.
“Uganda has implemented one of the most robust regulatory frameworks for the mineral sector on the African continent, with a strong emphasis on value addition. In the oil and gas sector, Uganda is already working with Malaysia’s Petronas through the Uganda National Oil Company, and there is a clear desire to deepen this partnership.
“Uganda is on the verge of commencing oil production, and there is much to share – from technical insights to challenges faced. Both countries are transitioning away from fossil fuels, yet Uganda and Malaysia continue to rely on the revenue these resources provide to fund development.”
Ruth Nankabirwa said Uganda is actively advancing its energy and mineral development initiatives, creating significant opportunities for international collaboration and investment.
Among the key projects is the Kabalega Petrochemical Industrial Park, strategically positioned to benefit from Uganda’s oil refinery.
“As the refinery is developed, a wide range of industrial opportunities will emerge. For instance, by-products such as ammonium nitrate can support the production of fertilisers, opening doors for investment in petrochemicals and agroindustrial inputs.
“The industrial park itself will also require a variety of support services, including hospitality and logistics, presenting further business potential. Additionally, the park is home to Uganda’s second international airport, enhancing its connectivity and strategic importance,“ she said.
Ruth Nankabirwa speaking at a press conference following the official opening of the Uganda Pearl of Africa Business Forum and Expo 2025 in Kuala Lumpur today. On the right is Uganda High Commissioner to Malaysia Betty Oyella Bigombe. – Bernamapic
Beyond the refinery, Ruth Nankabirwa noted that Uganda is preparing to announce new licensing rounds for petroleum exploration.
She said that to date, only 40% of the country’s petroleum potential has been explored, leaving 60% untapped.
“Companies interested in entering the sector will have opportunities to acquire new exploration blocks, including some that have been returned by TotalEnergies SE, a French multinational integrated energy and petroleum company, and are now open for reallocation.
“On the mineral side, investors can partner with the Uganda National Mining Company to develop mines across a range of mineral resources.
“These developments form part of Uganda’s broader strategy to promote value addition and sustainable resource management while positioning the country as a key player in regional energy and mineral markets, “Ruth Nankabirwa said.
With Malaysia’s annual exports to Uganda reaching US$250 million (RM1.1 billion), the expo is poised to deepen trade relationships and introduce Uganda as the prime investment destination in East Africa.
Source: thesun.my
Organised by the High Commission of the Republic of Uganda to Malaysia and World-One Business Federation, the two-day event presents an opportunity for stakeholders to connect directly with Uganda’s toppolicymakers to explore opportunities and forge strategic partnerships.
The Uganda Pearl of Africa Business Forum and Expo 2025 showcases the seriousness of investment and trade ties between Uganda and Malaysia, with four of Uganda’s key Cabinet ministers present at the event.
MPOB: Malaysia Must Diversify Palm Oil Markets Amid US Tariffs
Malaysia must diversify its palm oil markets to reduce dependency on any single export destination for the commodity, in light of the tariff challenges posed by the United States (US).
Malaysian Palm Oil Board (MPOB) chairman Datuk Mohamad Helmy Othman Basha said the 24 per cent tariff imposed by the US on Malaysian palm oil exports poses a significant challenge for the industry, potentially affecting the country’s export volumes and the livelihoods of many stakeholders.
“While the tariffs may lead to a decline in palm oil exports to the US, the negative impact would be more pronounced in the importing country due to limited alternatives to palm oil.
“Palm oil used in US industries cannot be easily replaced by other oils, suggesting that the increased costs may ultimately affect US consumers,” he said in his opening remarks at the Programme Advisory Committee (PAC) 2025 meeting today.
Mohamad Helmy further stated that the government remains steadfast in its commitment to defending the interests of Malaysia’s palm oil industry against such trade barriers.
“We are exploring all avenues, including diplomatic engagements and leveraging international trade agreements, to mitigate the impact of these tariffs and ensure the continued growth and sustainability of our palm oil sector,” he added.
He noted that the government, through the Ministry of Plantation and Commodities, is actively engaging with Asean counterparts to formulate a coordinated regional response.
Additionally, he said Prime Minister Datuk Seri Anwar Ibrahim had emphasised the importance of Asean unity in addressing these trade barriers, highlighting the need for open supply chains and collective action.
Under the PAC 2025 Meeting, MPOB has intensified its research agenda efforts with the newly introduced technology
(techno) and socio-economics (TSE) focus area, reflecting its commitment to addressing broader economic and social dimensions in the development of the oil palm industry, complementing its existing technical and scientific research.
Previously, MPOB’s research and development activities were anchored on five existing focus areas, namely yield performance; climate change mitigation and adaptation; milling, processing and mechanisation; food safety and nutrition; and value addition.
Meanwhile, Mohamad Helmy said that one of the critical areas PAC members need to address during the deliberations is the industry’s concerns on yield improvements.
“Although the production of palm oil has increased over the years, the yield has remained stagnant.
“By December 2024, around 9.3 per cent or 520,067 hectares of Malaysia’s oil palm trees were over 25 years old,” he said, adding that it is high time to implement advanced biotechnological, breeding and cloning tools to increase yield.
He stressed that the health implications of mineral oilsaturated hydrocarbons and mineral oil aromatic hydrocarbons in food products are still debated today, and to date, Malaysia has experienced three incidents of palm oil consignments being rejected for entry into two European countries.
“As the majority of palm oil is used in food production, there is an urgent need to combat the prevalence of mineral oil hydrocarbons in the palm oil value chains, particularly at the palm oil processing premises,” he said.
The annual four-day PAC Meeting involves PAC members comprising industry stakeholders, academic experts, and specialists from both local and international institutions. — Bernama
POMEVap Technology –
A Sustainable Way of Treating Palm Oil Mill Effluent (POME)
One of the major challenges faced by palm oil millers is the treatment of palm oil mill effluent (POME), which is primarily generated during the sterilisation of palm fruit and clarification of palm oil.
POME is a thick, brownish, colloidal mixture of water, oil, and fine suspended solids. It is characterised by a very high biological oxygen demand (BOD). Due to the high pollution load (BOD) in POME, an efficient treatment method has become essential for the sustainable and successful operation of palm oil mills.
Traditionally, POME is treated by pumping the wastewater into a system of large ponds, spanning areas equivalent to multiple football fields. This method has several disadvantages: it requires a large land area, generates methane (a greenhouse gas) which is released into the atmosphere, and results in the loss of approximately 1% of palm oil contained in the POME. Furthermore, most existing treatment methods are ineffective at removing colour from the treated effluent.
To address these issues, Alfa Laval has developed the POMEVap technology to efficiently manage POME treatment. This system leverages Alfa Laval’s proven separation technologies, incorporating both an evaporator and a decanter.
The POMEVap system utilises AlfaFlash plate evaporation technology and is specially designed to handle challenging and fouling liquids such as POME. POMEVap uses steam or electricity to boil the POME, separating it into two fractions: clear water and nutrient-rich solids. The AlfaFlash plate evaporator uses uniquely corrugated plates while maintaining sufficient recirculation flow rate to generate high turbulence (shear rate) in the POME stream. This results in reduced fouling, efficient heat transfer, and increased uptime. The POMEVap system is also highly compact, with a typical footprint of only around 300 m², significantly smaller than conventional POME treatment systems.
The raw POME from the process’s heavy phase contains around 1% oil, which is difficult to recover through the mill’s standard separation equipment. Through evaporation in the POMEVap system, the oil content in the concentrated POME increases severalfold. This allows for oil recovery using a dedicated decanter. The Alfa Laval PRODEC decanter is used to recover oil from the sludge concentrated by POMEVap.
The concentrated sludge, which comprises about 40% by weight, contains nutrient-rich solids. These can be dried and sold as animal feed or used as organic fertiliser in plantations, generating additional income for the mill.
The process condensate (separated water) is clear and has a low BOD. It can be further treated using methods such as aeration and filtration for reuse in the mill or as feedwater for steam generation, thereby reducing freshwater consumption.
POMEVap in Action
For one crude palm oil producer in India, investment in a POMEVap system from Alfa Laval enabled the mill to meet local environmental regulations while reusing condensate as process water. This significantly reduced freshwater consumption and greenhouse gas emissions. Additionally, profitability was improved through the recovery of palm oil that would otherwise have been lost in the POME.
The full-scale POMEVap system was installed and commissioned at the end of 2023, with results meeting the customer’s expectations.
POMEVap Summary
The POMEVap system benefits both palm oil mills and the environment. It enables mills to address the challenges of POME treatment in a sustainable and profitable manner. Recovered oil and solid by-products (which can be sold as organic fertiliser or animal feed) offer additional income opportunities. The condensate can be further treated and reused in mill operations. Additionally, land previously required for ponding systems can be repurposed for more valuable uses. POMEVap also helps reduce methane emissions (GHG) to the atmosphere.
For enquiries, please contact Alfa Laval at malaysia.info@alfalaval.com
Dutch Firm’s Pilot Plant in Kuantan Turns Palm Oil Waste into Renewable Energy
Dutch renewable energy company Maatschappij Wilhelmina
NV has established a pilot plant to convert palm oil waste into TG2 black pellets, a renewable energy source.
Plantation and Commodities Minister Datuk Seri Johari
Abdul Ghani said the company’s Wilhelmina Malaysia Energy Sdn Bhd utilises advanced technology to process palm oil waste into pellets that can effectively replace coal.
“Wilhelmina Malaysia Energy has set up a pilot plant in Malaysia to showcase this potential. Japan has already shown strong interest and is progressing through the procurement process.
Dutch renewable energy company Maatschappij Wilhelmina NV has established a pilot plant to convert palm oil waste into TG2 black pellets, a renewable energy source. Pix courtesy of Plantation and Commodities ministry’s FB
“I encourage players in the palm oil industry to participate in this initiative by allocating 10 to 20 per cent of their empty fruit bunches (EFB) to support the supply chain.
“This would help scale up production and position Malaysia as a global exporter of TG2 black pellets,” he said in a statement after visiting the plant at the Gebeng Industrial Area here today.
Johari urged palm oil mill operators to visit the Wilhelmina Malaysia plant to observe its technology firsthand, including its operations and environmental benefits.
“This initiative is a significant step towards creating a circular economy and adding value to our palm oil industry,” he said.
Meanwhile, Johari emphasised that his visit here today was aimed at gaining deeper insights into the innovative technology used to transform palm oil waste into renewable energy.
Johari was briefed on the plant’s end-to-end processing system, which includes the receipt and washing of feedstock (initial steps), followed by steam explosion, a second wash, and final stages of drying and pellet formation.
The end product, TG2 black pellets, is capable of replacing coal in power generation.
He said the visit reflected the ministry’s commitment to supporting sustainable, value-added innovations in the palm oil sector, particularly those that align with Malaysia’s environmental objectives and green economy aspirations.
Meanwhile, in a Facebook statement, the Plantation and Commodities ministry described Wilhelmina Malaysia’s 9.2-hectare biomass facility here as a producer of TG2 black pellets, second-generation torrefied biomass made from oil palm EFB.
The statement said that with an annual capacity of 80,000 tonnes, the facility employs modern technologies such as steam explosion, pellet formation, recycled water treatment, and biogas production.
In March last year, it was reported Wilhelmina will invest US$60 million to set up the world’s first TG2 black pellet plant that will convert agricultural waste such as empty fruit bunch into TG2 black pellets.
Atotal of 170 out of 446 palm oil mills installed biogas facilities last year, exceeding the National Agrocommodity Policy (NAPC) 2025 target of 155 mills and contributing to a reduction of greenhouse gas (GHG) emissions by 4.9 million tonnes of carbon dioxide (CO₂).
As such, Plantation and Commodities Minister, Datuk Seri Johari Abdul Ghani, called upon all palm oil millers to immediately develop the biogas industry.
“The development of the biogas industry has been proven to provide benefits and added value through the creation of job opportunities, economic growth, additional income and improved palm waste management — ultimately contributing to a better standard of living for rural communities,” he told BuletinTV3 during a visit to the Cenergi Sua Betong Biogas Plant here today.
As the world’s second largest palm oil producer, Johari said Malaysia is placing emphasis on implementing a circular economy at all stages of palm oil product production for better waste management.
“Capturing biomethane from palm oil industry waste, such as palm oil mill effluent (POME), can be used as a renewable energy source for electricity generation,” he explained.
A total of 63.5 million tonnes of POME was produced in 2022, generation 1.8 billion cubic metres (m³) of biogas, capable of producing 1.22 gigawatts (GW) of energy per year.
The Sustainable Energy Development Authority (SEDA) allocated a 190MW feed-in tariff (FiT) quota for 2025, covering biogas, biomass and mini hydro projects, as well as 50MW specifically for biogas and 40MW for biomass.
Johari added that broader grid connection access is crucial to realising these projects.
He urged Tenaga Nasional Bhd (TNB) to further increase the connection capacity of palm oil mills to the national grid,
Plantation and Commodities Minister, Datuk Seri Johari Abdul Ghani, called upon all palm oil millers to immediately develop the biogas industry. NSTP/ASWADI ALIAS
enabling millers to invest and benefit from the use of palm biomass waste for renewable energy generation.
He noted that the shift in palm waste management strategy reflects Malaysia’s commitment to environmental preservation.
“This is in line with Malaysia’s pledge to achieve net zero carbon emissions by 2050, reduce carbon emissions by 45 per cent relative to gross domestic product (GDP) by 2030, and cut methane emissions by 30 per cent,” he said.
To encourage more involvement from palm oil industry players, Johari called on millers unfamiliar with this concept to engage with Cenergi SEA Bhd to operate such biogas plants.
“Cenergi has the entire ecosystem in place. This biogas plant, with a capacity of 1.2 megawatts (MW), is operated by just seven people, all locals. They are qualified engineers and workers from the local community,” he said.
Cenergi, a subsidiary of UEM Lestra Bhd, is one of the nation’s sustainable energy solution providers, specialising in developing Malaysia’s green industry, including renewable energy, waste management and green infrastructure.
The company currently operates 20 biogas plants nationwide, with 12 more under construction, bringing the total electricity generation capacity to 52.8MW and compressed natural gas BioCNG capacity to 65,000 million British thermal units.
Johari Urges Palm Oil Industry to Support Biofuel Initiative
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani has urged palm oil industry players to support the TG2 Black Pellet initiative, a renewable biofuel innovation capable of replacing coal in power generation.
He said the technology, developed by Netherlands-based renewable energy company Wilhelmina Malaysia Energy Sdn Bhd, transforms empty fruit bunches collected from oil palm plantations into a clean energy source.
“This initiative is a significant step towards creating a circular economy from palm oil waste while adding value to the industry,” he said in a statement today.
He said the company has showcased the technology’s potential, noting that Japan has shown strong interest and is already progressing through the purchasing process.
Johari also encouraged industry players to consider allocating between 10 per cent and 20 per cent of their EFB output to the supply chain, which would help scale up production and position Malaysia as a global exporter of TG2 Black Pellet.
“I invite palm oil mills to come and see the technology for themselves to see how it works and how it benefits the environment,” he said.
In a Facebook post, Johari added that the 9.3-hectare biomass plant in Gebeng is capable of producing 80,000 tonnes of TG2 Black Pellet annually, using modern technologies such as steam explosion, pelletisation, recycled water treatment, and biogas systems.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani
“TG2 pellets are moisture-resistant, easy to transport, can be used directly in co-firing systems without needing any modification, and have a very low carbon footprint.
“This product not only meets European standards but also qualifies for green subsidies from Japan’s Ministry of Economy, Trade and Industry (METI),” he said. - Bernama
Nextgreen Taps Palm Oil Biomass for Pulp, Paper
Green technology company Nextgreen Global Bhd is optimistic that its joint venture (JV) with Xiamen C&D Paper & Pulp Group Co Ltd of China to set up a paper pulp plant will progress well, underpinned by strong demand for sustainable pulp and strategic government backing.
Nextgreen Global first announced its plan to form a JV with Xiamen C&D last April.
Back then, Nextgreen IOI Pulp Sdn Bhd (NIP), a 55:45 JV between Nextgreen Global and IOI Corp Bhd, had signed a memorandum of understanding with Xiamen C&D to jointly develop a paper pulp production facility at the Green Technology Park in Pekan, Pahang.
The JV agreement inked yesterday between Xiamen C&D’s wholly owned subsidiary, Hong Kong Paper Sources Co Ltd, and NIP further cements the initiative.
Under the agreement, NIP will hold a 75% stake in the new JV, while Xiamen C&D will hold the remaining 25%.
The new entity is expected to be established within 10 business days from yesterday to spearhead the development of the paper pulp plant.
Xiamen C&D is a Fortune Global 500 company and a leading professional supply chain operator for forest pulp and paper in China.
IOI Corp group managing director and chief executive Datuk Lee Yeow Chor said the JV aligns with the country’s aspirations outlined in the National Biomass Action Plan that was released two years ago.
“Palm oil is a key industry in Malaysia and the government has long focused on the annual generation of empty fruit bunches (EFB), which amounts to about 50 million to 60 million tonnes a year.
“The government has always had the ambition to utilise this bio-waste more effectively, and EFB utilisation and conversion into paper pulp is one of the important focus areas under the National Biomass Action Plan,” Lee told the media during the signing of the agreement yesterday.
(From left) Xiamen C&D Paper & Pulp Group Co Ltd general manager Zhang Xiao Hui, Nextgreen Global Bhd managing director Datuk Lim Thiam Huat, IOI Corp Bhd group managing director and chief executive Datuk Lee Yeow Chor at the joint venture agreement signing ceremony to spearhead the development of a high capacity, bio-integrated pulp production facility at the Green Technology Park in Pekan, Pahang.
The facility to be developed on 81 acres of land within the technology park is targeted for completion within 24 months and will utilise Malaysia’s abundant palm biomass, specifically EFB, to produce high-quality pulp.
The first phase, which is expected to be completed in 2027, will see 150,000 tonnes of pulp being produced annually.
It entails an estimated capital expenditure (capex) of RM900mil.
This is a step up from Nextgreen Global’s initial projections which targeted a production capacity of 100,000 tonnes in the first phase with a cost of RM600mil.
Meanwhile, the second phase will add another 300,000 tonnes to the plant’s production capacity, boosting annual production to 450,000 tonnes.
It is expected to be completed by 2028 or 2029 with a projected capex of RM1.8bil.
Xiamen C&D general manager Zhang Xiao Hui said it is expected to take about three years for the plant to hit the 450,000-tonne target.
“The construction of the second phase will overlap with the first.
“If production in the first phase is successful, we estimate that it will take a little over a year to complete the second phase,” Zhang said.
Nextgreen Global will contribute technology and expertise using its patented Preconditioning Refiner Chemical-Recycle Bleached Mechanised Pulp technology, while Xiamen C&D will take the lead in product distribution.
Zhang added that Xiamen C&D is expected to play a major role in the project, specifically as the exclusive distributor.
The company will be responsible for pricing as well as the promotion and sales of the product in the market.
“We will leverage our strong network and customer resource advantages in the Chinese market to ensure the smooth sales of the product.
“Currently, China imports over 33 million tonnes of pulp annually.
“Each year, with the development of China’s economy, the volume is also increasing,” Zhang said.
Sabah To Develop Green, Blue Economies for Sustainable Future
Sabah can supply up to 75 per cent of the nation’s green energy once its sector is fully developed, said Chief Minister Datuk Seri Hajiji Noor.
He said the government had launched the Sabah Energy Roadmap and Master Plan 2040.
He added Sabah has an abundance of renewable energy sources that can contribute significantly to the state and nation’s transformation into a high value-added economy.
“The state government will continue to developing energyrelated infrastructure.
“We have been steadfast in our pursuit of taking control and managing the state’s energy resources to empower Sabah’s energy sector.
“The state government looks forward to the continued cooperation and support of all stakeholders in driving Sabah towards a greener and more sustainable future.”
He said this at the Sabah Renewable Energy Conference held at a resort here.
Finance Minister Datuk Seri Masidi Manjun read his speech.
Sabah Finance minister Datuk Seri Masidi Manjun during the Sabah Renewable Energy Conference 2025 at a hotel here. - Pic courtesy of Sabah Chief Minister’s office
Hajiji said the state government had identified a new economic sector, the Blue Economy, which involves sustainable exploration of Sabah’s incredible marine and coastal resources.
At another event, Hajiji said the Food Systems, Land Use and Restoration Programme aims to balance agricultural development needs with environmental conservation.
It also supports a more sustainable, efficient and inclusive food system.
“This project supports sustainable farming practices, particularly in the oil palm sector, while also rehabilitating degraded forest areas.
“This enables us to reduce pressure on forest ecosystems while ensuring food supply and income sources for the people of Sabah.”
He said this at the launch of the state-level International Day of Forests celebration at Universiti Malaysia Sabah.
His speech was delivered by state Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe.
Hajiji added that the initiative supports climate goals, as forests help combat climate change by absorbing carbon.
Plantation Ministry Prioritises Aid for Smallholders Affected by Bagworm Infestation
The Plantation and Commodities Ministry is prioritising assistance for smallholders impacted by bagworm infestations, as the pest continues to pose a serious threat to palm oil production.
Minister Datuk Seri Johari Abdul Ghani said the ministry was directing its limited resources towards smallholders, as larger plantation companies typically have the capacity to manage such issues independently.
“Our ministry’s budget is limited, though there is a small allocation from the federal government.
“We are focusing on smallholders. Larger companies usually fund their own pest management, but in cases where smallholders are severely affected, we will intervene and provide support,” he said.
He told reporters this after a meeting with Barisan Nasional (BN) machinery in Kampung Rahmat today.
Johari was responding to concerns raised by farmers in Kampung Baru Coldstream, as reported by PERAKfm, regarding ongoing bagworm infestations.
He said that the farmers had submitted a complaint to the ministry, prompting remedial efforts as early as April and May, with most affected areas already addressed.
“This process began in April and May, and some work has already been completed. Only one or two areas remain to be resolved.
“I hope that with this assistance, smallholders will be able to maintain good yields. It’s essential that we address the bagworm issue, as it significantly reduces fruit production,” he said.
According to the report, the issue has also drawn the attention of Dr Mohamad Yusri Bakir, the BN candidate for the Ayer Kuning state seat.
The infestation, which has persisted for two years, has affected some 809ha of oil palm plantations, causing substantial losses to farmers who rely heavily on palm oil as their primary source of income.
It was reported that the infestation has led to a 40 per cent reduction in yields for affected farmers.
Datuk Seri Johari Abdul Ghani told reporters this after a meeting with Barisan Nasional (BN) machinery in Kampung Rahmat today. —NSTP/ AIZUDDIN SAAD.
MPOB Scaling New Frontiers under the Leadership of Director-General Datuk Dr. Ahmad Parveez Ghulam Kadir
Parveez
1. With the EU Deforestation Regulation (EUDR) set to take effect in December 2025, how is Malaysia positioning its oil palm industry to comply while safeguarding the interests of smallholders?
One of the main challenges of the regulation is the geolocation requirements of the EU Deforestation Regulation (EUDR) which are particularly complex for smallholders, who may lack resources necessary to document their land area of cultivation accurately. These stringent demands could limit smallholder participation in the EU market, potentially marginalising them. Independent smallholders face many challenges in meeting the requirements, especially with geolocation and mapping initiatives. Recognising these challenges, the Malaysian Palm Oil Board (MPOB) is currently supporting smallholders in collecting the necessary information to meet the regulation’s requirements.
Malaysia continues to strive towards increasing global acceptance of the Malaysian Sustainable Palm Oil (MSPO) certification scheme to enhance the competitiveness of Malaysian palm oil, which could boost future demand and continually pushing for the EU to recognise MSPO as a valid standard for compliance with the EUDR.
While the EUDR poses significant challenges, Malaysia’s proactive approach to sustainability, exemplified by the MSPO certification scheme, positions the oil palm industry to navigate these hurdles effectively. Continued collaboration between industry stakeholders, government bodies, and smallholders will be essential to ensure that Malaysian palm oil remains a competitive and sustainable choice for consumers worldwide.
2. What are MPOB’s current strategies to enhance traceability and transparency across the palm oil supply chain in line with international sustainability expectations?
The Ministry of Plantation and Commodities (KPK) through MPOB implements comprehensive strategies to enhance traceability and transparency in the palm oil supply chain, aligned with international sustainability standards. Efforts made by MPOB include:
i. Development of Sawit Intelligent Management System (SIMS): SIMS is a centralised digital platform that records and manages transactional data across the palm oil supply chain. It enables stakeholders, including smallholders, dealers, and millers, to track daily transactions, ensuring transparency and facilitating compliance with regulatory requirements. The system promotes a self-reporting mechanism and provides real-time data for informed decision-making.
ii. Development of the National Traceability System (NTS) for Palm Commodity: NTS is being developed with SIMS as the key driver for the entire supply chain. This system will integrate with other systems including e-MSPO to support sustainability reporting, ensuring comprehensive traceability
Datuk Dr. Ahmad
Ghulam Kadir
from plantation to export markets. The initiative aims to streamline data collection and enhance the credibility of Malaysia’s palm oil exports.
iii. Mandatory MSPO Certification for Fresh Fruit Bunch Dealers (DF): To strengthen the integrity of the palm oil supply chain, MPOB is moving towards mandating MSPO certification for all licensed DF. This initiative aims to ensure that every point in the supply chain adheres to sustainable practices, enhancing transparency and accountability. The e-MSPO platform makes licensee information accessible to the public such as parent company names, certification status, and coordinates of smallholders and plantations. It enhances visibility of certified entities, supporting international stakeholders’ sustainability assurance needs.
iv. GeoSAWIT: MPOB developed GeoSAWIT to present detailed spatial data of MSPO-certified entities, including estates and organised and independent smallholders, as required by the EUDR. This system offers geolocation data with six decimal places, ensuring precise tracking of palm oil production sites, enables data-matching between licensing information and cadastral lots, providing clear identification of certified entities.
v. Multi-stakeholder collaborations: MPOB collaborates with various parties including ministries, other government agencies including MSPO, NGOs and as well as the industry members to gain insights into ensuring a continuous improvement in traceability and transparency across the palm oil supply chain. MPOB also partnered with various companies to integrate data across stakeholders using SIMS. This collaboration focuses on empowering smallholders, ensuring compliance with sustainability standards, and adopting advanced technologies to enhance productivity and efficiency.
3. Malaysia has made significant progress in MSPO certification. What’s the next frontier in making MSPO globally recognized and on par with other international schemes?
Sustainability remains at the core of MPOB’s mission. We are committed to strengthening national certification schemes, one of which is the Malaysian Sustainable Palm Oil (MSPO). MSPO certification, reflects the industry’s dedication to sustainability, which is especially vital for the socio-economic development of smallholders.
One key area is enhancing alignment with international regulations, particularly the European Union Deforestation Regulation (EUDR). MSPO is taking proactive steps to meet these evolving requirements by strengthening its traceability systems through tools such as e-MSPO, and by updating its certification criteria under MSPO 2.0. These updates include the integration of greenhouse gas (GHG) calculators, high conservation value (HCV) assessments, and stricter environmental and social safeguards. These enhancements are intended to make MSPO a reliable certification tool for demonstrating compliance with global sustainability expectations.
Another critical step is fostering strategic collaborations. Notably, the MoU between MSPO and Nestlé Malaysia marks a significant move toward inclusive and responsible sourcing, especially with smallholder involvement. Additionally, MSPO is engaging in multi-stakeholder alliances to promote sustainable practices across the value chain, which is vital for enhancing its global credibility and acceptance.
To further cement its international recognition, MSPO has been included in the International Trade Centre’s (ITC) Standards Map, which allows for easier benchmarking against other global standards. Moreover, Malaysian Government continues to engage with the European Commission to advocate for formal recognition of MSPO under the EUDR framework. Such recognition would not only streamline compliance for Malaysian producers but also boost the international reputation of MSPO.
Continuous improvement and stakeholder engagement remain at the heart of MSPO’s progress. The scheme is committed to periodic standard reviews to incorporate the latest sustainability requirements, while also investing in capacity building for smallholders to help them meet certification standards. This ensures that MSPO remains responsive, inclusive, and globally relevant in promoting sustainable palm oil.
4. How is MPOB supporting the industry—especially smallholders—in adopting new technologies or practices to improve sustainability and productivity?
The Malaysian Palm Oil Board (MPOB) plays a significant role in supporting the oil palm industry, particularly smallholders, by facilitating technology adoption and sustainable practices.
Biotechnology and Breeding
In biotechnology and breeding, one of the key objectives of the oil palm breeding programme is to develop oil palm breeds with reduced height increment (dwarf stature), while having higher yields. Dwarf oil palms offer significant advantages to the industry by lowering harvesting costs and extending the replanting cycle from 25 to 30 years. This is particularly beneficial in countries like Malaysia, where labour shortages for harvesting are a growing concern.
In response to these needs, MPOB introduced PS1.1, featuring reduced height increment of 25–45 cm per year—significantly lower than the 45–75 cm per year typical of commercial planting materials. PS1.1 delivers high fresh fruit bunch (FFB) yield of 30–40 tonnes per hectare per year and an oil-to-bunch (O/B) ratio of approximately 30%, resulting in high oil extraction rate (OER) – exceeding 25%.
From 2025 through 2030, MPOB is distributing PS1.1 planting materials to smallholders under the national replanting programme. This initiative aims to facilitate easier FFB harvesting due to the shorter palm height, improve overall productivity, and extend the economic lifespan of plantations, especially among smallholders. Smallholders are expected to benefit from this initiative, contributing to greater sustainability and efficiency in the oil palm cultivation sector.
Smallholders Empowerment Ecosystem
i. TUNAS Extension Services
MPOB provides extension services via Tunjuk Ajar dan Nasihat Sawit (TUNAS) Offices, offering technical lectures, training, courses, seminars, advisory visits, and method demonstrations to transfer technology and increase awareness of GAP.
ii. MSPO Certification Support
MPOB facilitates the Malaysian Sustainable Palm Oil (MSPO) certification for independent smallholders by providing both technical and financial assistance. This includes fully funding the cost of MSPO certification audits for independent smallholders, as well as providing essential training and a range of other incentives.
iii. Establishment of Sustainable Palm Oil Clusters (SPOCs)
Independent oil palm smallholders are scattered across the country, posing challenges in delivering extension services and facilitating the MSPO certification process. To address these challenges, 162 Sustainable Palm Oil Clusters (SPOC) have been established throughout Malaysia to enhance access to extension services, training, and support for MSPO certification.
iv. Empowering Smallholders through KPSM Cooperatives
MPOB has introduced a cooperative structure under the Sustainable Oil Palm Grower Cooperative (KPSM) to empower smallholders in managing their resources more effectively. Financial and management assistance are provided to cooperatives, enabling them to engage in business ventures, such as establishing fresh fruit bunch (FFB) collection centres equipped with weighbridge systems. This initiative allows smallholders to sell FFB directly to mills, thus improving their economic stability.
v. Integration with oil palm
To further enhance sustainability and income diversification, smallholders are encouraged to integrate crop and livestock farming with oil palm cultivation. MPOB has developed and transferred various technologies supporting this approach, including the double avenue planting system, which extends the duration of crop integration into the mature stage of oil palm, providing continuous additional income. Additionally, livestock integration models, such as cattle and goat farming, have been designed to suit small land areas owned by smallholders.
vi. Replanting Financing Scheme
Recognising the need for replanting to maintain long-term productivity, the Ministry, through MPOB, has introduced the Financing Scheme for Oil Palm Replanting (TSPKS) for independent oil palm smallholders.
Farm Mechanisation
With regards to farm mechanisation, MPOB initiated the Oil Palm Industry Mechanisation Incentive Scheme (2016–2020), which provided financial incentives to promote mechanisation and improve operational efficiency.
To further strengthen innovation and adoption in this field, MPOB also established the Mechanisation and Automation Research Consortium of Oil Palm (MARCOP), which is a collaborative platform that brings together stakeholders from industry, academia, and government to drive research and development in mechanisation and automation technologies.
In 2023, MPOB introduced the Oil Palm Smallholder TechnoEntrepreneur Programme, aimed at developing selected smallholders into service providers by equipping them with mechanisation technologies and entrepreneurial skills.
MPOB continues to offers technical training and access to mechanisation tools, enabling smallholders to adopt improved practices that contribute to greater productivity and sustainability within the sector.
Pest and Disease Management
Pest and disease management have always been a challenge to agriculture sectors and oil palm is no exception. MPOB advocates for Integrated Pest Management (IPM) as a sustainable and ecologically favourable pest control method among smallholders.
Acknowledging smallholders’ financial and environmental challenges, MPOB has intensified its efforts to promote IPM techniques that reduce dependency on synthetic chemicals while maintaining maximum protection.
Promoting the use of biological control agents, particularly Bacillus thuringiensis (Bt.) has been the priority. Aside from its safe use on non-target species and the environment, this bioinsecticide has been effective against the most common pests, including bagworms.
MPOB provides assistance to smallholders in implementing a focused and cost-effective insect control regime through training as well as access to Bt. MPOB pioneers aerial spraying technologies using drones and helicopters to enhance the efficacy and accuracy of application and biocontrol. Smallholders with insufficient resources in managing outbreaks, will benefit from MPOB initiatives.
MPOB also encourages the planting of beneficial plants such as Cassia cobanensis and Turnera subulata, both serving as natural competitors to oil palm pests by attracting parasitoids and predators. By fostering a self-sustaining insect control ecosystem, this agroecological approach enhances the resilience of plantations and contributes to the long-term objective of reducing chemical inputs.
MPOB is actively developing biocontrol agents in suppressing major pest and disease (P&D) threats in the plantations. Several biocontrol products in the market that have proven to be effective as a preventive measure for basal stem rot (BSR) infection in oil palm are TrichoShield™, GanoEF™ and GanoEMBIO™.
Smallholders are encouraged to implement IPM alongside best management practices for P&D control in real field conditions. This comprehensive and sustainable P&D management system through technical assistance, field demonstrations, and integration of latest techniques ensures smallholders are MSPOcompliant. In addition to preserving yields and livelihoods, this aligns with national and global standards for environmental, social, and governance (ESG) conformance.
5. Given the shift in global trade dynamics, how important is market diversification for Malaysian palm oil, and which regions are showing the most promise?
Market diversification is crucial to ensuring the long-term resilience and global presence of Malaysian palm oil. Relying too heavily on traditional markets exposes the industry to geopolitical and regulatory risks, which can disrupt trade flows and affect demand. Malaysia is actively expanding into new and emerging markets to safeguard its export potential while opening fresh opportunities for growth.
Among the most promising regions are the African continent and the Gulf Cooperation Council (GCC) countries. These regions offer significant potential due to rising population growth, increasing food demand, and a growing acceptance of palm oil in food and non-food applications. Malaysia remains committed to exploring these new frontiers while continuing to strengthen its presence in established markets.
Through proactive trade engagements, government-togovernment collaborations, and the promotion of Malaysian Sustainable Palm Oil (MSPO) certification, Malaysian palm oil is positioned as sustainable, high-quality choice for diverse global consumers.
6. What steps is MPOB taking to address the challenges of aging oil palm trees and stagnant yields in certain plantations?
To address the issue of aging oil palm trees and stagnant fresh fruit bunches (FFB) yields, the government had allocated RM100 million to assist independent smallholders in executing replanting activities using high-yielding planting materials.
Beyond this allocation, the Ministry through MPOB consistently encourages the oil palm plantation sector to prioritise and expedite the replanting activities of the old oil palm trees, particularly those over 25 years old, which typically has significantly lower yields. The Government has advocated for the use of high-quality planting materials, balanced fertiliser application and the adoption of mechanisation in oil palm plantations as strategies to boost productivity and address the aging oil palm population.
Malaysia is now entering its fourth-generation planting and aging palms have been a long-standing issue for plantations especially in managing pests and diseases (P&D). Besides having lower yields, aging palms are more susceptible to P&D threats.
Therefore, a structured replanting schedule should be developed targeting especially aging palm trees (typically over 25 years old) and prioritising low-yielding blocks affected by P&D challenges such as basal stem rot (BSR) disease.
Aside from that, an ongoing effort in screening for disease resistant planting materials hopes to develop potential breeding lines that can withstand disease infection in the near future. MPOB’s further R&D in regenerative agriculture approach emphasises the use of green technologies to boost productivity through microbes is also adopted to aid in reducing disease inoculum in the field.
7. Looking ahead, what is your vision for Malaysia’s oil palm industry in the next five years, especially in maintaining its global leadership while meeting ESG standards?
Malaysia’s oil palm industry is a foundation of the national economy and a key player in the global oils and fats supply chain. We are fully committed to embracing Environmental, Social, and Governance (ESG) principles as part of its long-term strategy. Over the next five years, the vision is to strengthen the industry’s global leadership by institutionalising ESG across the entire value chain, turning sustainability into a competitive advantage.
This involves a multi-pronged approach:
i. Strengthening MSPO Certification
The Malaysian Sustainable Palm Oil (MSPO) certification remains central to our sustainability agenda. Continuous improvement of its standards, wider adoption across the supply chain, and increased international recognition are
key priorities to ensure MSPO remains on par with leading global sustainability benchmarks.
ii. Driving Innovation and Productivity
Advancing the industry through replanting with highyielding materials, mechanisation, automation, and the adoption of AI technologies will improve efficiency. Emphasis on zero-waste practices, circular economy principles, and advanced processing will further enhance environmental performance.
iii. Championing Environmental Stewardship
Protecting forests, conserving biodiversity, mitigating climate change, and promoting sustainable land management are integral to ESG compliance and are essential for long-term resilience. Advancing technologies with data analytics to improve upstream, midstream and downstream processing, productivity and by-products utilization cost-effectively. Encourage technologies uptake featuring decarbonisation pathways that are aligning with circular bioeconomy, GHG emissions reduction and net-zero targets.
iv. Upholding Social Inclusivity
Empowering smallholders, safeguarding labour rights, and engaging with local communities ensure that growth is inclusive and socially responsible.
v. Enhancing Transparency and Market Access
Tools like the Sawit Intelligent Management System (SIMS) and GeoSawit strengthen traceability and compliance with global regulations such as the EU Deforestation Regulation (EUDR). At the same time, Malaysia is actively diversifying markets and promoting value-added products to enhance global reach. Incorporating technologies such as blockchain,
remote sensing, GIS tools, satellite imagery and drones, etc. as a longer-term solution to ensure tamper-proof data flow across the value chain for international certification and reporting requirements.
Looking ahead, my vision for Malaysia’s oil palm industry over the next five years is clear: to strengthen our position as a global leader in sustainable palm oil by fully embedding ESG (Environmental, Social, and Governance) principles into every level of the value chain-from plantations to global markets. We aim to achieve this through three key pillars:
Environmental Stewardship
We are intensifying our efforts to reduce greenhouse gas emissions, particularly from peatland cultivation by controlling the water table, by promoting precision agriculture, methane capture, and replanting with higher-yielding, climate-resilient varieties. At the same time, we are committed to halting deforestation and ensuring no expansion into high conservation value areas, in full alignment with international expectations such as the EU Deforestation Regulation (EUDR) and MSPO.
Social Responsibility
The welfare of smallholders and workers remains a top priority. We are enhancing traceability systems and working closely with agencies to ensure ethical labour practices, fair wages, and community development. We also continue to support smallholders in achieving MSPO certification so they can access premium markets.
Governance and Innovation
Through digitalisation, traceability mechanisms, and ESG reporting tools, we are improving transparency and accountability. Our research agenda will continue to drive innovations in low-carbon practices, circular economy applications, and biodiversity-friendly operations.
Ultimately, Malaysia’s oil palm industry must not only comply with ESG standards but become a global benchmark for sustainability in tropical agriculture. We believe sustainability and profitability are not mutually exclusive, they are complementary. With strong policies, data-driven, sciencebased solutions, and industry-wide collaboration, I’m confident that Malaysia can lead the way in producing the most sustainable palm oil in the world.
Indonesia To Use African Weevils to Spur Oil Palm Output
Indonesia is betting on tiny bugs from Africa to help boost its palm oil production, as the broader sector grapples with tightening supply that threatens to keep prices elevated and add to food inflation.
The world’s top grower is planning to introduce around one million of the weevils at some plantations this year to improve pollination and fruit development. Three species collected from Tanzania are expected to arrive at a facility in North Sumatra next month for a series of tests before they are released.
The hope is the African weevils will help revive production growth after years of stalling output, which stems from old trees that some growers are reluctant to replant due to the extended time it takes for them to fruit. Constrained supply, including from the second-biggest producer, Malaysia, has contributed to palm relinquishing its status as the world’s cheapest vegetable oil to soyoil.
Adding to the problem: Indonesia now wants to expand its biofuel program, meaning more palm oil will be diverted to local supply rather than used for export. That’s put the insect initiative at a crucial time.
Indonesia and Malaysia’s palm industries have ballooned over recent decades, often at the cost of large swathes of native jungle and forests. The two now account for around 85 per cent of global supply of the most widely used vegetable oil, which can be found in products from chocolate to cosmetics and biofuel.
Palm oil is native to Africa, making the Tanzanian bugs well suited for the role, and an insect release has been successful in the past. Weevils were introduced during the 1980s to plantations in Indonesia and Malaysia, leading to significant improvement in production rates.
“We need a fresh batch of the insects,” said Dwi Asmono, the head of research and development at the Indonesian Palm Oil Association, known as Gapki. The industry group is leading the initiative with support from the government and state-owned and private producers.
“It’ll be like having a troop of free workers to pollinate the flowers,” he added. “Some of the factors to be studied before a wide release are their enemies, friends, and their behaviour in the morning, day, and night.”
A team of Indonesia researchers collected around 6,000 weevils in Tanzania in January, which will be sent to the North Sumatran lab owned by the Indonesian Oil Palm Research Institute. A task force including entomology experts and the Biosafety Commission will study the insects and their interaction with local species before they’re released at plantations.
The weevils will reproduce in vast numbers at the facility before being given to about 20 companies that are part of the initiative, according to Gapki’s Asmono. The agriculture ministry will decide on the next steps including the potential for wider distribution following the trial, he added.
“We expect it could significantly increase national palm oil production,” said Dwi Sutoro, a director at state-owned plantation company PT Perkebunan Nusantara III (Persero), which is taking part in the program.
The insects are from the Elaeidobius genus of palm-pollinating weevils, which are around, or slightly bigger than the size of a pinhead. They have a large capacity to transfer pollen and are highly host-specific to palm oil trees.
The weevils offer growers a faster fix to their supply woes, but they risk distracting from the urgent need to replace old plantations that are no longer producing at their peak. New trees start bearing fruit at three years, whereas the insects can yield bigger bunches within 12 months.
“The initiative is a solution for young palm trees,” said M. Hadi Sugeng Wahyudiono, a director at Astra Agro Lestari, a palm producer participating in the insect trial. “Older ones, especially those over 25 years old, need to be replanted using high productivity seedlings.”
Indonesia released about 500 weevils back in the 1980s, with studies showing successful fruit formation on palm oil trees increasing to 75 per cent from 40 per cent. Gapki predicts the new batch of bugs can lift that to at least 85 per cent.
Still, weevils are not the only factor determining a successful harvest. High quality plant varieties, adequate volumes of fertiliser and proper agriculture practices are also vital for maintaining or raising palm oil production, while pests and diseases remain a constant threat.
Trucks are seen near a palm oil plantation at a village located near Indonesia’s projected new capital, known as Nusantara National Capital, in Sepaku, East Kalimantan province, Indonesia – Reuters
Sumisaujana Group Branches into Specialty Chemicals Industry
SumiSaujana Group, a Petronas-licensed manufacturer specialising in the formulation, manufacturing and supply of drilling fluid chemicals, and production, and refinery chemicals for the upstream, midstream, and downstream segments in the oil and gas industry, is branching into the specialty chemicals industry.
The group has signed a licensing and commercialisation agreement with the Malaysian Palm Oil Board (MPOB) to produce and sell three types of palm-based chemicals – palmbased intermediates, palm-based polyols and bio-based polyester polyols.
SumiSaujana executive director/CEO Norazlam Norbi said these palm-based chemicals are renewable alternatives to petroleum-based chemicals mainly used in polyurethane production, which supports industries like automotive, construction, adhesives, coatings, and more.
“The global market for polyurethane alone is worth over US$86 billion (RM384.72 billion), and palm-based intermediates are valued at US$17 billion. This shows huge potential for Malaysia’s palm oil innovations to tap into these markets,” he said at the signing of a memorandum of agreement, which includes licensing and commercialisation, between the company and MPOB today.
At a press conference later, Norazlam said the first product launch could happen as soon as late 2025, while full rollout of all three technologies is targeted within a year from now. “We expect one of the products can be commercialised within six months, and all three should be commercialised within a year, working closely with MPOB.”
Norazlam said no major new investment is needed because they have already started expanding their plant in anticipation of this project.
A new production line called “Trade Three” was commissioned in late December 2024, which gives them the infrastructure needed to support this new venture.
“Depending on further R&D with MPOB, we won’t need much more investment to begin production,” Noralzam said.
MPOB director-general Datuk Dr Ahmad Parveez Ghulam Kadir said this collaboration would provide the industry players with the opportunity to explore the potential of MPOB’s innovative technologies and contribute to the growth of a more sustainable and competitive chemical industry at the global level.
“By expanding the downstream potential of palm oil, we are not only elevating its value chain but also promoting Malaysia’s role in climate-conscious manufacturing.”
He said the partnership reflects MPOB’s broader research and development strategy to enhance the commercial value of palm oil through high-value downstream applications. “It also supports Malaysia’s Public-Private Partnership Master Plan 2030, which aims to position the country as a global hub for sustainable and bio-based technology.”
Source: thesun.my
Ahmad Parveev (left) and Norazlam exchanging documents after signing the memorandum of agreement today. – Bernamapic
India: A Growth Frontier for Sustainable Palm Oil by Dr. Puah Chiew Wei
India is the most populous country in the world, with a population exceeding 1.46 billion people. The rapid population growth presents significant opportunities for potential growth, particularly in the demand for both food and non-food products across the nation. Thus, it is essential to develop strategies and policies through a holistic and comprehensive approach to ensure security in both food and non-food sectors including energy.
In the food sector, edible oils are a staple in the Indian diet, commonly used for cooking, frying and food processing. However, India relies heavily on imports of edible oils to meet its growing demand taking into consideration the domestic production can only satisfy a fraction of the total need, resulting in India becoming the largest importer of edible oils in the world and the top importer of palm oil.
Palm oil plays a crucial role in supporting the demand for edible oil in India as it is the most widely produced edible
oil in the world, accounts for about 35% of global vegetable oils production. The unique properties of palm oil make it a functional oil in various food applications and a valuable ingredient for the food industry because it enables an enormous range of manufacturing processes at no health risk to consumers. Palm oil has better oxidative stability and is resistant to the formation of oxidised polymers, making it the preferred choice for cooking oil in India.
One of the health-related concerning palm oil in India is associated with the claim that palm oil is unhealthy due to its high level of saturated fatty acids. This claim is misleading and creating negative image for palm oil as a food source and food ingredient. Palm oil contains a balanced proportion of unsaturated and saturated fatty acids at about 50% each. Studies showed that palm oil behaves more like a monounsaturated fat and has no adverse impact on blood cholesterol levels. In addition, scientific evidence has confirmed that moderate consumption of palm oil is no worse than other cooking oils.
More importantly, palm oil does not require hydrogenation for use as a fat component in food, avoiding the formation of trans fatty acids which have been proven to have detrimental effects on health. The Food Safety and Standards (Prohibition and Restrictions on Sales) Second Amendment Regulations, 2021 of India stipulated that all food products in which edible oils and fats are used as an ingredient should not contain industrial trans fatty acids more than 2% (by mass) of the total oils/fats present in the product, on and from 1 January 2022. Therefore, palm oil and its products are good alternatives to replace trans fatty acids for formulation of trans fatty acids-free food products.
Red palm oil, which is commercially available, is rich in phytonutrients, including carotenoids, tocols (tocopherols and tocotrienols), phytosterols and squalene which have gained significant attention due to their nutritional benefits. It is the richest natural source of carotenoids, particularly alpha- and beta-carotene, biologically active pro-vitamin A and a powerful antioxidant. Palm oil also contains tocotrienols, antioxidants that are several times more potent than tocopherols and have been proven scientifically to possess anti-inflammatory and cholesterol-lowering properties. Therefore, the consumption of nutritious red palm oil can provide beneficial antioxidants to the Indian population, supporting better overall health.
Palm oil is also an important raw material for non-food applications due to its versatility. Oleochemicals industry is one of the industries that relies on the use of palm oil as raw materials in a wide range of industrial and consumer
products to replace petroleum-based chemicals. The physical and chemical properties of palm-based oleochemicals enable the manufacturing and production of many products such as personal care products and household products. The growing demand driven by consumers’ increasing preference for “natural” products will support the use of palm-based oleochemicals which are renewable and biodegradable alternative to petroleum-based chemicals. The demand for oleochemicals in India is expected to grow in tandem with the positive economic growth and socio-economic development.
Palm oil is also the most widely used feedstock for the production of biodiesel, with the share of about 32% of the global production. This reflected its crucial role in supporting global energy security. It is therefore important for India to leverage on the use of palm oil as a renewable and sustainable energy source.
Indonesia and Malaysia, the two largest palm oil producing countries, are committed to produce sustainable palm oil compliance to international and national standards, as well as committed to international agenda on combating climate change and global warming. Both countries have put in place policy framework and regulations to ensure the sustainable development of the oil palm industry balancing the conservation of forest and biodiversity.
The implementation of mandatory national sustainable certification schemes namely, Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO) are important milestones of the industry, making palm oil the only vegetable oil subjected to stringent sustainable requirements visà-vis other vegetable oils. The industry focusses on increasing productivity through good agricultural practices and better planting materials without opening new land.
The continuous improvement, technological advancements and innovation, coupled with the supports of relevant stakeholders including the Governments of palm oil producing countries have driven the positive development of the industry. The positive prospects in India are expected to be a pivotal growth frontier for the oil palm industry.
Dr. Puah Chiew Wei is the Director of Strategy and Policy of the Council of Palm Oil Producing Countries (CPOPC) She graduated from the University of Malaya, Malaysia with a Bachelor of Science (Major in Applied Chemistry and Minor in Statistics) and Ph.D. in Chemistry. She has more than 20 years of working experience in the Malaysian oil palm industry. Dr. Puah has authored and co-authored more than 180 publications in journals, book chapters, technical publications and reports as well as presentations in conferences and seminars at the national and international levels. She has five (5) patents filed and granted based on her research findings in the palm oil research including one technology that has been commercialised.
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Palm Oil – The Unsung Gentleman of Global Sustainability
By Professor Dato Dr Ahmad Ibrahim
Tan Sri Omar Centre for STI Policy UCSI University
Associate Fellow UAC, University Malaya
Palm oil has come a long way since assuming leadership of the global oil and fats business. It accounts for the largest share, more than a third, of the world trade in oils and fats. Malaysia can claim to have started the expansion. Indonesia is now the largest producer. Malaysia is second. But unlike Indonesia, Malaysia has reached the limit in production because of land constraints. This has stabilised at about 6 million hectares. Malaysia has always respected the need to refrain from encroaching into environmentally sensitive permanent forest areas. We value biodiversity. To increase production, Malaysia is trying hard to increase yield. It is not easy because unlike Indonesia, Malaysia is very dependent on foreign labour to harvest the fruits. But Malaysia is intensifying her R&D on breeding through MPOB to deliver better yield. At an average of 4 tons per hectare per year, the yield is far behind the theoretically possible yield of 17 tons. We may reach there one day.
The Malaysian Palm Oil Association, MPOA, is the industry group that has always been committed to the betterment of the industry. MPOA brought together a few plantation groups established in the early years of the industry, including RGA, United Planting Association of Malaysia (UPAM) and MOPGC. I recently attended a dinner celebrating 25 years of MPOA. Many veteran industry captains came to honour the occasion. Raja
Tun Muhammad Alias, a much recognised leader of FELDA and the founding Chairman of MPOA, was there to receive a special award, MPOA Lifetime Contribution to the Palm Oil Industry Award. The other two recepients were Tan Sri Lee Oi Hian, KLK Chairman and Tan Sri Mohd Bakke Salleh, former head of SD Guthrie. MPOA chairman, Dato’ Lee Yeow Chor of IOI Corporation, lamented about the low interest among the young generation to join the industry. In a world quick to vilify, palm oil stands as an unassuming titan, quietly powering our lives while weathering a storm of criticism. Found in half of all supermarket products, from lipstick to instant noodles, this ubiquitous oil is both a hero and a scapegoat of modern industry. Yet, amidst the clamor, palm oil behaves not as a villain, but as a gentleman; resilient, reform-minded, and indispensable.
Imagine a crop that produces 35% of the world’s vegetable oil on just 10% of the land allocated to oilseeds. This is palm oil’s silent superpower. Compared to soy or sunflower, which require up to nine times more land to yield the same output, palm oil’s efficiency is unmatched. In an era of shrinking arable land and growing populations, this efficiency isn’t just impressive, it’s critical. To shun palm oil would mean swapping it for far thirstier, land-hungry alternatives, exacerbating environmental strain. Palm oil’s detractors rightly highlight its historical ties
to deforestation and biodiversity loss. Yet, like a gentleman acknowledging past missteps, the industry has embarked on a transformative journey. The Roundtable on Sustainable Palm Oil (RSPO), established in 2004, now certifies 20% of global production, mandating zero deforestation, peatland protection, and fair labor practices. Major producers like Malaysia and Indonesia have halted new plantation expansions in primary forests, while companies such as SD Guthrie invest in satellite monitoring to combat illegal logging. These aren’t mere pledges, they’re measurable actions. Since 2018, deforestation linked to palm oil has fallen by 60% in Southeast Asia. Malaysia now boasts of zero deforestation.
Behind the headlines are millions of smallholder farmers, families in rural Indonesia, Malaysia, and Nigeria, for whom palm oil is a ladder out of poverty. The crop generates $20 billion annually for Indonesia alone, funding schools, clinics, and infrastructure. Critics in wealthier nations, whose ancestors leveled forests for industrialization, now demand developing countries forgo similar growth. Yet palm oil offers a paradox: it is both a development tool and a sustainability test case. The challenge lies not in boycotting it, but in ensuring its benefits reach those who need it most. Swapping palm oil for alternatives like soy or coconut is no panacea. Soy cultivation
drives deforestation in the Amazon, while coconut farming’s water intensity strains arid regions. Even olive oil, celebrated in Mediterranean diets, requires 3,000 liters of water per liter of oil, compared to palm’s 1,200. Palm oil’s sin isn’t its impact, but its visibility. As the most scrutinized oil, it faces a double standard others evade.
The path forward isn’t demonization but collaboration. Europe’s recent deforestation law, which targets palm oil imports, risks penalizing smallholders already adopting sustainable practices. Instead, wealthy nations should fund green transitions, supporting technologies like methane-capturing biogas from palm waste. Consumers, too, can advocate for certified sustainable products, rewarding ethical producers. Palm oil is no saint, but neither is it a sinner. It is a mirror reflecting our collective demand for affordable, abundant, and sustainable resources. To label it a “gentleman” is to recognize its capacity for reinvention and its quiet role in sustaining modern life. The true test of global sustainability lies not in scapegoating a single crop, but in reshaping systems so that efficiency and ethics go hand in hand. Palm oil has shown it can adapt. The question is: Can we?
Pondering Vegetable Oils from Nutrition and Health Sides
Palm oil is a healthy vegetable oil, which is easily digested and absorbed. It enhances food taste and contains nutrients useful for human health, making it the most widely consumed vegetable oil in the world (Calloway and Kurtz, 1956).
The palm oil has been consumed by humans since thousands of years ago. Its long history has proven that it is safe to consume and considered to be one of the healthy sources of foods for global population. (Cottrel, 1991). It is globally consumed as cooking oil, margarines, shortening, spreads, confectionary fats, ice cream, etc., at the level of households and food industries. It is also used as a source of fatty acids, vitamin E, and emulsifiers.
During the last few years, the consumption of palm oil has not only increased but also expanded to all parts of the world. Data from the Oil World (2017) shows that almost all of global population have consumed palm oil in their everyday lives.
The increase of global palm oil consumption has been seen since 2005, exceeding other rival vegetable oils. It seems that the increase of global consumption of palm oil has triggered the intensive negative and black campaigns against the palm oil (PASPI, 2017). The rapid increase of global palm oil consumption was apparently driven by the superiority of palm in its high nutritional content.
In a literature study titled “Palm Oil Advantages and Accusations of Causing Cancer”, PASPI (2017) reveals the results of researches conducted by a number of global nutrition experts. Their researches shows a variety of advantages of palm oil as the source of cooking oil compared to other vegetable oils, such as soybean, sunflower, olive oil, etc.
First, the results of researches conducted by nutrition experts (Cottrel, 1991; Muhilal 1998; Muchtadi, 1998; Haryadi, 2010; Giriwono and Nuri Andarwulan, 2016) shows that palm-based cooking oil has a balanced fatty acid composition, which is 50% saturated fatty acids and 50% unsaturated fatty acids. Such balanced composition makes palm cooking oil more stable, not easily rancid, and not produce free radicals that trigger cancer.
Such ideal composition cannot be found in other vegetable oils, such as soybean oil, sunflower oil, olive oil, which are dominated (85-90%) by unsaturated fatty acids and not stable.
Palm oil has saturated fatty acids in a balanced proportion. The composition of palm oil’s fatty acids consists of 40% of oleic acid (unsaturated fatty acids), 10% linoleic acids (poly-unsaturated fatty acids), 44% palmitic acids (saturated fatty acids), and 4.5% stearic acids (saturated fatty acids).
It means that palm oil has the composition of saturated and unsaturated fatty acids in a balanced proportion. Its composition of fatty acids is better than other vegetable oils (Wood et.al, 1993; Ng, T.K.W et.al, 1992; Hayes and Khosla 1995; Choudhury and Truswell, 1995).
Second, in the process of making the palm cooking oil, there is no need for the process of hydrogenation because the palm oil has been stable in nature.
Meanwhile, in the process of making cooking oil from other vegetable oils, such as soybean, sunflower, rapeseed, and olive oil, producers need to conduct the process of hydrogenation to make it more stable. But actually, the hydrogenation process produces new compounds, which are trans fatty acids that are potential to trigger cancer, obesity, coronary heart, and alzheimer’s disease (Haryadi, 2010; Giriwono and Nuri Andarwulan, 2016).
Palm oil does not contain trans fatty acids. The composition of palm oil’s fatty acids makes palm oil semi-solid, with melting points ranging from 33 to 39 degrees celcius.
Having such characteristics of melting points, the palm oil can be used for a variety of formulations in its natural forms
without the need for the process of hydrogenation (Haryadi, 2010; Giriwono, 2016).
PASPI (2017) found that the hydrogenation process (mainly partial hydrogenation) for increasing solidity of oil will also cause a change of configuration of unsaturated fatty acids from cis to trans.
Clarification of saturated and unsaturated is very potential to be misleading, as not all saturated fatty acids have the same configuration. Naturally, the natural unsaturated fatty acids have the configuration of cis.
But, the process of hydrogenation, especially the partial hydrogenation, will cause the change of configuration of unsaturated fatty acids from cis to trans. The content of trans unsaturated fatty acids in soybean oil that underwent hydrogenation can reach 13-30%.
Third, the palm oil contains very high anti-cancer compounds, which are vitamin A (beta carotine) and vitamin E. Palm oil has the highest content of vitamin E compared to other vegetable oils.
The content of vitamin E in palm oil reaches 1,172 ppm, which is higher than the content of vitamin E in soybean oil (958 ppm), sunflower oil (546 ppm), corn oil (782 ppm), and also other oils (Slover, 1971; Gunstone, 1986; Palm Oil Human Nutrition, 1989).
The Vitamin E functions as natural anti-oxidant and protects cells from early aging process (cellular aging), atherosclerosis and cancer (Walton and Packer, 1980; Hirai et.al, 1982; Cross, 1987; Elson and Qureshi, 1995). Besides having a high content of vitamin E, the palm oil also has a high content of vitamin A compared to other food sources.
The palm oil contains vitamin A at around 5,000 – 6,700 µg per 100 gram, which is 12 times higher than the vitamin A content in carrots or 300 times higher than the content of vitamin A in oranges. Actually, the content of vitamin A is even much higher in red palm oil if compared to other food sources considered as the source of vitamin A, such as carrots, bananas, oranges, etc (Haryadi, 2010).
The vitamin A and E and the essential fatty acids (oleic, linoleic, and stearic acids) have been proven by nutritionists and health experts as beneficial in preventing cancer /tumor, prevention of night blindness, improving human endurance, preventing heart disease and blood vessels, etc.
Considering those three factors, it is clear that in terms of composition of fatty acids, production process and cotents of vitamin A and E, the palm oil does not only improve human health, but also help to overcome various diseases, including heart and cancer.
Conversely, other vegetable oils, such as soybean oil, sunflower oil, rapeseed, and olive oil are potential to cause various diseases, such as cancer. As a matter of fact, the composition of their fatty acids that is not in a balanced proportion and not stable, and their hydrogenation process that produces free radicals, are potential to cause cancer disease. (PASPI, 2017).
The RM42bil Oil Palm Replanting Conundrum
NATURE ages, and so do palms. Oil palm trees thrive in their prime years, but after 25 years, they start showing their age –growing too tall for efficient harvesting.
Once trees exceed 12 metres, even skilled harvesters struggle.
With a shrinking workforce and ageing harvesters, manual harvesting becomes an uphill battle. The job gets tougher, yields decline and costs creep up.
Despite these glaring red flags, replanting is often delayed. Carbon-fibre harvesting tools offer a temporary fix, extending productivity by another three years.
South American harvesters have mastered techniques for taller palms, recovering impressive yields. This extension can generate revenue to build replanting funds – if used wisely.
But let’s not kid ourselves. This is a stop-gap, not a long-term solution. Pushing the limits of tall palm harvesting buys time, but it doesn’t solve the problem.
The message is loud and clear: replanting isn’t a choice – it’s survival.
Data Speaks for Itself
In Malaysia, 1.4 million hectares (ha) – 25% of total planted area – are nearing the end of their productive life. In Sabah alone, one in three trees is over 20 years old.
Without aggressive replanting, yields will plummet, costs will surge and the industry risks stagnation.
Replanting is costly. A well-executed programme costs around RM30,000 per ha, covering land clearing to maturity in three years.
Mult iply that by 1.4 million ha, and the total national reinvestment needed over next few years skyrockets to RM42bil.
For smallholders – who manage 26% of Malaysia’s planted area – it’s a financial burden many can’t afford, trapping them in a cycle of ageing plantations and declining yields.
For large plantations, replanting is a calculated investment but a tough sell in the boardroom.
The sheer cost forces difficult trade-offs between short-term profits and long-term sustainability. Many decision-makers hesitate, weighing whether to replant, diversify, or redirect funds elsewhere.
Some find property development or other ventures more attractive – why reinvest in trees when prime land can offer better real estate returns?
But kicking the can down the road only sets the industry up for a reckoning.
Replanting isn’t just about replacing old trees – it’s a commitment to the industry’s future. The real question is: Do we truly believe in the long-term viability of this edible oil sector?
The Case for Replanting
First off, let’s talk about yield restoration and productivity.
As oil palm trees age, yields drop sharply. Tall trees make harvesting harder, leading to crop losses and higher labour costs.
Mechanised solutions for tall palms remain elusive. Replanting is the only proven way to restore productivity.
Then there’s the financial aspect. RM30,000 per ha is steep, but think of it as the industry’s gym membership – painful now but worth it in the long run.
Replanting allows growers to adopt superior planting materials, precision agriculture and modern techniques that boost yields and reduce labour dependency.
It’s a long-term investment that pays recurring dividends.
Beyond yields, replanting benefits the environment. Optimised plantation layouts improve mechanisation, boosting productivity without expanding into green-fields.
Smarter replanting means doing more with less land – a win for both growers and sustainability.
NATURE ages, and so do palms. Oil palm trees thrive in their prime years, but after 25 years, they start showing their age – growing too tall for efficient harvesting.
A Crisis in Motion
Despite its advantages, replanting is lagging. In Malaysia, only 132,000ha were replanted in 2023, shrinking further to 114,000ha in 2024.
At this rate, we’re not just dragging our feet; we’re moving in reverse gear.
To sustain a healthy oil palm age profile, the industry should replant 4% to 5% of its planted area annually. However, with a growing number of ageing trees, this rate must double.
While it may tighten short-term supply and affect prices, it’s a crucial step for long-term stability and resilience.
Financial Roadblock
Pragmatic replanting demands hefty investment, and that’s the biggest hurdle. Cash-strapped growers delay replanting.
The paradox? When palm oil prices soar, companies hold off to maximise short-term profits. When prices fall, replanting is unaffordable.
It’s a feast-or-famine cycle, and those with ageing trees will feel the pinch hardest when prices dip.
The government offers incentives, but they fall short. Malaysia’s 2024 budget allocated RM100mil for smallholder replanting –enough for just 5,000ha to 6,000ha.
A similar sum is expected in 2025. Compare this to the total RM42bil needed for large-scale replanting, and it’s clear the current allocation is unfortunately a drop in the ocean.
Meanwhile, Indonesia’s Palm Oil Fund, financed through crude palm oil export levies, supports both biodiesel and replanting.
Time For Bold Solutions
If we’re serious about tackling the replanting crisis, the usual half-measures won’t cut it.
Industry and government must adopt bolder financial strategies to break the funding deadlock.
1. Windfall profit tax reallocation.
Instead of funnelling windfall tax revenues only collected from the oil palm sector into consolidated kitty, a portion should be reinvested into replanting oil palm.
Growers pay this tax – shouldn’t some of it go back into securing their future?
The lobby to make this happen must go into overdrive.
2. Reinvestment allowance for replanting.
The existing reinvestment allowance benefits other sectors – so why not extend it to oil palm replanting? After all, replanting is essentially a reinvestment.
Allowing companies to offset 100% against statutory income would unlock more funds for replanting, driving the industry’s long-term sustainability.
Unlike smallholders, plantation companies aren’t asking for handouts – just a smarter tax incentive.
This can also be targeted. For example, a plantation group managing 10,000ha typically replants 4% (400ha) annually. If they push it to 6% (600ha), they should qualify for a full allowance on the extra 200ha.
This targeted incentive would encourage proactive growers and drive industry-wide replanting.
3. Long-term supply chain partnerships.
Supply chain stakeholders must join forces to establish dedicated and shared replanting funds, bringing together buyers, financiers and sustainability-focused investors.
This isn’t just about cost-sharing, it’s about securing a stable, long-term palm oil supply for both buyers and producers.
It may seem ambitious, but the conversation needs to start now.
The
Clock Is Ticking
If we believe in a future with a thriving palm oil industry, replanting must become a top priority. It may feel like shortterm pain for long-term gain, but ignoring the issue is no longer an option.
The time for half-hearted solutions is over. What’s needed is a clear, bold and strategically financed replanting plan.
The industry must confront this challenge head-on.
Without bold financial strategies to accelerate replanting, we risk being caught between a rock and an ageing palm tree.
Joseph Tek Choon Yee is the past president of the Malaysian Estate Owners Association and former chief executive of the Malaysian Palm Oil Association. The views expressed here are the writer’s own.
