Sustainable palm oil
BASF advocates market transformation towards certified sustainable oil palm products. We actively support the Roundtable on Sustainable Palm Oil (RSPO) since 2004 and have been working to foster the physical transformation of the industry. Palm oil, palm kernel oil and their respective derivatives are valuable raw materials for home and personal care ingredients.
Progress year-to-date
The RSPO is a multi-stakeholder forum with the aim to “make sustainable palm oil the norm.” It’s more than 5,000 members are from the 7 sectors of the palm oil industry: oil palm producers, processors and traders, consumer goods manufacturer, retailers, banks and investors, and environmental and social non-governmental organizations, to develop and implement global standards for sustainable oil palm.
The BASF Palm Dialog, established in 2016, is a platform to discuss topics relevant for the industry with representatives from the entire supply chain. During the past years we have discussed solutions and possible pathways forward with participants from industry, retail, associations and NGOs.
Palm kernel oil and to a lesser extent palm oil are some of our most important renewable raw materials. We mainly use these raw materials to produce ingredients for the cosmetics, detergent, cleaner and food industries. Oil palms have the highest yield per hectare compared to other oil producing crops, hence palm oil needs significantly less land to grow the amounts of raw materials needed. Oil palm products also reduce poverty as they provide income for millions of farmers and their families. And with its unique chemical properties, palm kernel oil is especially difficult to substitute. We aim to ensure that palm-based raw materials come from certified sustainable sources.
To this end, we have endorsed the Roundtable on Sustainable Palm Oil (RSPO) since 2004 and we consider RSPO to be a standardized implementation of a strong No Deforestation, No Peat, No Exploitation (NDPE) policy. We purchased 159,798 metric tons of palm oil and palm kernel oil in 2023.
We again met our own voluntary commitment to source only RSPO-certified palm oil and palm kernel oil. This avoided approximately 225,000 metric tons of CO2 emissions compared to the procurement of conventional palm oil and palm kernel oil. By 2025, we aim to extend our voluntary commitment to sustainable procurement to the main intermediate products based on palm oil and palm kernel oil. We were able to trace 96% of our global palm footprint to oil mill level as of the end of 2023.
In addition, we continued to drive forward the RSPO supply chain certification of our sites for cosmetic ingredients. At the end of 2023, 25 production sites worldwide were certified by the RSPO. In line with raised awareness for sustainability, we continue to see growing demand for certified palm-based products from our customers. BASF offers a very broad range of ingredients based on RSPO-certified sustainable palm (kernel) oil in accordance with its principles and criteria.
Since launching certified ingredients in 2012, BASF has been continuously moving towards a comprehensive global product range that will allow consumer goods manufacturers to develop value adding formulations that meet increasing demand for ingredients
that are certified sustainable. The annual BASF Palm Progress Report reports on our measures and progress towards more sustainability and transparency in the value chain.
Our Challenge
Palm oil and palm kernel oil are very versatile vegetable oils, and oil palm trees produce higher yields per hectare than any other oil seed. These facts, combined with relatively low production costs explain, why these vegetable oils are so popular.
However, the palm oil supply chain is complex, involving challenges linked to environmental protection, human rights, economics in developing countries and international trading.
In the past two to three years, our focus has been on certified sustainable palm kernel oil. We have used our certified supply chains to increase traceability.
In contrast to certified palm oil, the availability of certified sustainable palm kernel oil derivatives is still limited.
We at BASF therefore support market transformation via certification. For us certification is key for sustainable palm cultivation. The RSPO certification process is currently the most transparent and effective initiative globally to improve the entire palm oil sector. It provides the necessary infrastructure to monitor the market transformation in a transparent manner. To progress holistically, however, the collaboration of all partners in the value chain is needed.
Our Palm Commitment
We want to ensure that our products are made from sustainably sourced raw materials. On our journey towards sustainable oil palm products we have made progress: We actively support the use of palm and palm kernel oil from sources certified by the Roundtable on Sustainable Palm Oil (RSPO). In 2015 we renewed and extended the BASF Palm Commitment. With the BASF Palm Sourcing Policy we have published a purchasing guideline for palm oil products which includes the protection of forest and peatland. We drive the traceability of our oils to the mill level and support smallholder farmers.
According to our plans we intend to
- by 2020 – source only sustainable palm and palm kernel oil RSPO certified sustainable as far as available on the market;
- by 2025 – expand these commitments to the significant intermediates based on palm oil and palm kernel oil. These include fractions as well as primary oleochemical derivatives plus vegetable oil esters.
- support initiatives to reflect an integrated land use planning for oil palm development that includes the conservation of high carbon stock forests and peatlands. We integrated additional forest conservation requirements regarding high carbon stock and peatland into our BASF Palm Sourcing Policy (as defined by the High Carbon Stock Approach). Additionally, we have incorporated requirements for a “Free, Prior Informed Consent” (FPIC) as well as labor and human rights into our Palm Sourcing Policy.
Check out our progress at rspo.org
We are expanding our offering of certified sustainable products in accordance with the RSPO’s Mass Balance supply chain model. In 2018, we have taken the decision to drive sustainable palm with a major portfolio shift. We will offer palm-based ingredients for the personal care market that are certified as sustainable. This helps our customers to meet their obligations to customers, consumers and stakeholders. To fully complete the switch on a global level, BASF discusses with all its stakeholders to expand the demand for RSPO MB certified products. This is an important milestone for the cosmetics industry.
Smallholder engagement as integral part of sustainable palm production: Partnerships in terms of smallholder projects enable BASF to support these farmers and at the same time increase the availability of sustainably produced palm oil, e.g. by offering continuous education and technical support on implementing and maintaining sustainable palm oil practices and to foster a sustainable palm oil production supply chain that is free from deforestation and competitive in the global market, while increasing the social and economic benefits for farmers.
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