ISPO leads global palm oil certification as EUDR compliance challenges remain

12 Aug 2024 --- Indonesia Sustainable Palm Oil (ISPO), Indonesia’s national policy aiming to enhance the sustainability of the palm oil industry and the acceptance of the country’s produce in international markets, is now the largest certification program for the agricultural commodity. 

The scheme covers 5.68 million hectares, making palm oil the most certified agricultural crop worldwide. The two major palm oil players in the region, Indonesia and Malaysia, have jointly certified over 11 million hectares of palm oil plantations so far.

For comparison, Roundtable on Sustainable Palm Oil, a global certification system for sustainable palm oil, has so far certified 4.9 million hectares, which includes many plantations from the two countries having two certifications.

The ISPO-certified area covers more than a third of the country’s palm oil plantations, around ten times the size of the Indonesian province of Bali. The total cover of ISPO and the Malaysian Sustainable Palm Oil scheme covers an area larger than South Korea.

Certified entities include over 1,000 plantation organizations, such as small-scale farmers, cooperatives and companies since the launch of the mandatory standard in 2011.

All the ISPO-certified farms produce around 40 million tons of palm oil annually, accounting for over 40% of the world’s palm oil production.

Indonesia has 2.6 million smallholders who can gain ISPO certification through the government’s financial mechanisms. The scheme aims to reach all levels of the country’s palm oil industry.

EUDR challenges

The F&B industry is bracing for the European Union Deforestation Regulation (EUDR), which aims to restrict the movement of key consumer commodities like , cocoa, coffee, palm oil, rubber, soya and wood to European markets if their origins contribute to deforestation.

ISPO says it currently does not meet the EUDR’s deforestation cut-off date requirements. However, it maintains that its certifications require independent auditors to verify each certified company's legal documentation requirements.

The European Forest Institute recently performed a study to assess the role of the Indonesian scheme in facilitating compliance with the EUDR and found several commonalities between the data collected by ISPO and the information required by the EU under the EUDR.

The study also identified crucial gaps in information the national certification system requires on geolocation and deforestation definitions, which currently do not correspond to the EUDR or the UN Food and Agriculture Organization’s notions.

Beyond compliance, ISPO’s program targets poverty, hunger, gender discrimination and environmental footprint, contributing to the UN’s Sustainable Development Goals.