Sustainable and climate friendly palm oil production and procurement

Project description

Title: Sustainable and climate friendly palm oil production and procurement
Commissioned by: Federal German Ministry for the Environment, Nature Conversation and Nuclear Safety (BMU)
Country: Indonesia, Thailand, Germany
Lead executing agency: Indonesia: Ministry of Planning (BAPPENAS), Plantation Agency of East Kalimantan Province, Thailand: Department of Agricultural Extension (DoAE), Department of Agriculture (DoA)
Term: 2018 to 2022


Palm oil is now the most widely consumed vegetable oil worldwide. Accordingly, production areas in the tropics have increased and palm oil production is an important income source for farmers and other stakeholders in rural areas. 

Over the last decades rainforests and peatlands, which are highly biodiverse, have had to give way to palm oil plantations. The release of the carbon contained in the forest cover and in the highly organic peat soil creates greenhouse gases. However, forest clearing and degradation caused by small-scale agriculture and plantation—which include oil palm—keep increasing.

This picture changes when palm oil is produced with environmental and social sustainability aspects in mind. This is desirable in order to avoid further deforestation, increase the supply of sustainably produced palm oil and improve farmers’ livelihoods. 

Government administrations and public businesses also purchase palm-oil-based products on a large scale, such as in cleaning detergents, for example. The majority of food products in Germany are made with certified palm oil already. But the use of a certified palm oil by public procurement bodies and in the animal feed industry needs to be further increased.


Greenhouse gas emissions from palm oil production have been reduced and the environmental and social sustainability of smallholder oil palm plantations is improved. The producer countries Indonesia and Thailand certify whole jurisdictions where palm oil producers apply sustainable cultivation techniques. The demand for more sustainable palm oil products in Germany, is heightened. 


The project focuses on the value chain – from land use and cultivation, harvesting and marketing through to the consumer. For this purpose, government authorities, companies and smallholder farmers in Thailand and Indonesia form multi-stakeholder partnerships. One objective is to increase the number of farmers certified according to marketable sustainability standards. To reduce greenhouse gas emissions, forests and peatlands should be protected. 

The project team supports the development of land use plans involving smallholders, government representatives and private companies. Partnership agreements between actors along the value chain, such as oil mill operators, intermediaries and multinational companies are intended to establish incentives for the transition to sustainable production. 

In Germany, the project encourages public and private demand for products made from sustainably produced palm oil. Public procurement bodies as well as animal feed companies are advised to purchase certified products. In addition, awareness for sustainable palm oil is raised by round table talks with companies and consumer portals. 

The project partners are the Thai Department of Agriculture and Department of Agricultural Extension, the Indonesian Ministry of National Development Planning (BAPPENAS) and the Province Government of East Kalimantan Province as well as Environmental Action Germany (Deutsche Umwelthilfe e.V. – DUH) in Germany. 


  • By conserving high-carbon-stock forests and improving agricultural practices, greenhouse gas emissions from oil palm cultivation are reduced by the equivalent of 25,000 tonnes of CO2. New oil palm plantations in the pilot areas are developed only on existing plantations or uncultivated areas.
  • More than 3,100 smallholders in Indonesia and Thailand are trained in sustainable cultivation practices and are prepared for certification. 
  • Jurisdictions in producer countries make use of a strategy to implement sustainability criteria and an official land use plan.
  • German public procurement bodies increase purchases of certified palm oil products by at least 10 per cent.