Cargill ramps up segregated sustainable palm oil capacity in North America

12 Nov 2020 --- Cargill is aiming to become one of North America’s first large-scale suppliers of segregated palm oil certified by the Roundtable for Sustainable Palm Oil (RSPO).

The term “segregated” indicates that certified palm oil is kept separate from conventional palm oil throughout the supply chain.

Beginning in December 2020, all palm oil production from the company’s Charlotte, North Carolina, US refinery will be solely dedicated to providing the sustainably sourced product.

“Palm oil plays a critical role in feeding and supporting millions, as it is the world’s most widely used vegetable oil,” says Reid Kinde, North American commercial leader for Cargill’s global edible oils business.

As of December, all palm oil production from Cargill’s North Carolina refinery in the US will be solely dedicated to sustainably sourced palm oil.“With growing numbers of brands pledging to source palm oil responsibly, we are now positioned to supply North American food manufacturers with sufficient quantities of segregated RSPO-certified product to meet their sustainability commitments.”

The expanded supply means consumers may soon see the sustainable palm oil used in many food staples, including bakery, snacks, confectionery and dairy, as well as popular non-dairy creamers.

Product transparency is notably a theme that will continue to steer consumer demand into the coming years. “Transparency Triumphs” was recently crowned as Innova Market Insights’ Top Trend for 2021, with a renewed interest in technologies like invisible barcodes and near-field communication devices that help boost product traceability significantly.

Certifying traceability across an expansive supply chain
Segregated certified palm oil must be produced according to the principles and criteria established by the RSPO, which verifies that forests are protected, and social and environmental safeguards are met during the oil’s production and harvest. 

To carry the segregated RSPO designation, certified palm oil must be kept separate from commodity palm oil supplies and be traceable throughout the supply chain. 

This product must be produced on RSPO-certified sustainable palm oil plantations, refined at RSPO-certified facilities and ultimately used by a RSPO-certified manufacturer.

Cargill has been supplying RSPO-certified palm oil since 2005, now reaching customers in Europe, Mexico, Australia and Malaysia. In September, RSPO reported that its 2019 sales of certified palm oil increased by 13 percent globally.

Cargill’s move to ramp up its RSPO-certified palm oil comes as the company nears its goal of providing traceability to all palm plantations in high-risk landscapes.

In its annual sustainability report, released in June of this year, Cargill outlined its progress, working with smallholder palm farmers across more than ten countries to deliver sustainable palm oil to hundreds of customers worldwide.

“More than ever, brands and consumers care about the standards behind the products they buy,” notes Kinde. “People want assurance that the raw materials used are sourced in a sustainable, environmentally conscious way.”

“By significantly increasing the supply of segregated certified-sustainable palm oil, we’re giving our customers and consumers’ confidence in our sourcing practices and reaffirming our commitment to supporting sustainable practices throughout our operations,” he adds.

Industry giants lead the charge, but more can be done
Palm oil is regarded as one of the most efficient vegetable oil crops in terms of yield per hectare, with international conservation charity ZSL stressing that a complete rejection of the product would only likely shift demand to less-efficient alternatives and lead to greater habitat destruction.

Cargill’s move to ramp up its RSPO-certified palm oil comes as the company nears its goal of providing traceability to all palm plantations in high-risk landscapes.Industry is still far from total transparency, however. Last month, a CDP’s new Investor Research report entitled “Zeroing-in on Deforestation” said more needs to be done to fulfill net zero deforestation targets, and many in the consumer goods sector are unlikely to meet their goals.

Companies across the palm oil supply chain have committed to zero deforestation by 2020, through the Consumer Goods Forum pledge or through their own targets. 

Last month, Mars revealed that its Palm Positive Plan has delivered a deforestation-free palm oil supply chain.

In its deforestation crackdown, Unilever is also using geospatial analytics in a move touted by the company as bringing a “new level of sophistication to traceability” – one that has the potential to work on a massive scale.

Meanwhile, UK industry heavyweights have banded together to urge the government to strengthen its anti-deforestation policy. The 21 companies include Nestlé, Unilever, Tesco, Lidl, Asda, Aldi and Nando’s.

In spite of these efforts, ZSL flags there is still much more work to be done. Only 55 percent of its assessed companies (54 out of 98) apply clear zero-deforestation commitments to their suppliers, while only 10 percent (10 out of 98) are able to comprehensively report on how they are monitoring this.

By Benjamin Ferrer