Blockchain May Resolve Palm Oil Problems

As consumer desire for palm oil continues to rise, movers and shakers within the industry look towards blockchain to solve issues related to production, accountability, and sustainability.


Growing demand for palm oil over the last decade has driven a lot of new eyes towards the industry.

Production of palm oil has become a popular way to meet global consumption for vegetable oils, since the yield per hectare ratio is very high.

Palm oil is also used as a conditioning agent in shampoos to restore natural hair oils. It is also commonly added to ice cream to help retain a smooth quality.

Currently, palm oil growers, processors, and related consumer goods manufacturers are grappling with how to solve problems while promoting sustainability — all throughout the notoriously complex palm oil supply chain.

Due to a relatively opaque supply chain, there is still no clear-cut way to trace palm oil back to its original plantation. Despite efforts from the Roundtable on Sustainable Palm Oil (RSPO), only 17% of worldwide palm oil production is classified as sustainable.

As a result, regulatory bodies within the industry have a difficult time with product certification. This is especially so when consumers demand details about specific items.

Still, a growing number of producers, regulators, and consumers in the palm oil industry believe that blockchain may be used to close current gaps in the supply chain. Not to mention the promotion of transparency.

Organizing Towards Blockchain

Recently, a number of palm oil industry leaders announced the creation of a group called SUSTAIN (Sustainability Assurance & Innovation Alliance).

The goal of the collective is to establish a blockchain-based palm oil platform to tackle landscape-level sustainability problems, as well as meeting goals related to NDPE (No Deforestation, No Peat, No Exploitation).

Initial participants in the collective include palm oil companies Asian Agri and Apical. Other players in the palm oil supply chain will most likely join as the alliance develops.

According to Digital News Asia, SUSTAIN will eventually offer access to a system in which parties can download tools to monitor traceability and compliance, trade FFBs, and utilize best practice guides.

Patching Gaps in the Palm Oil Chain

Others feel that blockchain might be utilized as a support structure for a system that could check the geolocation of harvested fruit bunches. The system would then would be able to store information related to palm oil worker identities and harvesting times.

This structure could provide government agencies, and NGO officials, with better information regarding employment status and overall working conditions. At the same time, it may allow policymakers access to more information about farming practices prior to crafting land use policies.

Blockchain has also been touted as a tool to help cut down on palm oil spoilage. Palm oil has a propensity to react poorly if it is improperly stored. This holds the potential to make the product harmful for consumption if the amount of Free Fatty Acids (FFA) reaches a specific level.

Speculation is that blockchain could be combined with IoT sensors to monitor shipping and transport conditions to single out poor batches of palm oil before they hit the market.

What role do you think Blockchain will play in the sprawling Palm Oil industry? Don’t hesitate to let us know in the comments below.


Images courtesy of Shutterstock, Wikimedia Commons.

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