"There is a lot of pressure for this system to be in place," said Andrew Ng, secretary-general of the Roundtable on Sustainable Palm Oil, or RSPO, which is developing the certification system.
"We anticipate that it will be rolled out at the next roundtable meeting at the end of the year."
The first-ever certification system for palm oil will make it easier for consumers to tell whether they are buying from environmentally-friendly, socially-responsible sources as suppliers.
Over the last decade, palm oil has come under intense criticism from groups in Europe and the U.S. for contributing to the destruction of rainforests and wildlife in Southeast Asia.
The industry has dismissed such accusations as baseless, suggesting the attacks may be part of a wider political agenda and insisting that apart from the practices of a handful of rogue producers, most palm oil is produced in a sustainable manner.
In an effort to put an end to the debate, the RSPO was formed in 2003 from parties with varied interests in palm oil, ranging from producers to consumers to rights groups and banks, making a combined effort to promote sustainable production.
The RSPO has since defined sustainable palm oil through a set of principles and criteria covering the entire supply chain and expects to launch a certification system to verify sustainability when it holds its next annual meeting in Kuala Lumpur November 20, Ng said.
Acceptable To All
The introduction of certificates for sustainable palm oil comes at a time of rising worldwide demand for food crops as a fuel source.
While the use of corn and rapeseed oil as biofuel has swelled, palm oil's advancement in the energy market has been slowed by sustainability-related concerns.
Analysts have said that palm oil has lost out on some 500,000 metric tons a year of potential demand from the European power generation sector alone because users are hesitating.
A certification system could help allay consumer fears, paving the way for palm oil that's sustainably produced to make a bigger impact in the energy sector, besides the traditional food market.
"There is demand for palm oil that can be certified sustainable. Buyers are waiting for the oil," Ng said.
"RSPO member producers are also saying they are ready to be audited and are sure they can meet the criteria to get certified."
In an indication of the growing interest in sustainable palm oil, RSPO's membership has tripled within two years to around 250 members currently, mainly because of an influx of energy companies, Ng said.
He said the RSPO's sustainability certification system is modeled after international quality benchmarks like the International Organization for Standardization's ISO 9000, with rigorous verification, audits and surveys conducted by accredited certifiers along the entire supply chain from oil palm estates right up to the point of distribution to end users.
"While palm oil has been attacked and the members of RSPO have been attacked, the RSPO's principles and criteria has never been attacked," Ng said.
"We believe what we have now is a verification protocol for palm oil that is going to be acceptable to all parties," he added.
Making More Money
By complying with sustainability standards and getting certified, palm oil producers not only stand to gain the confidence of consumers, but also make more money, Ng said.
Companies that are already adopting the RSPO's prescribed sustainable practices have reported cost savings as more efficient environmental and social managementoften helps to boost crop yields and improve worker productivity, he said.
Sustainable palm oil also commands a higher price in the global market.
"There are premiums that are already being given. Customers are willing to pay extra money for it," Ng said.
For the RSPO, the launch of the certification system later in the year will mark the successful completion of only one its many objectives.
Ng said the association's next task will be to interpret its broader principles and criteria into national levels to reflect the unique environmental, social and legal issues of different countries.
The RSPO will also be looking to expand its certification system to involve smallholders, or individual oil palm estate owners.