Palm oil sector urged to use blockchain tech to help prove sustainability

MANCHESTER: The palm oil industry should use blockchain technology to clearly prove that the fresh fruit bunches (FFB) harvested are certified sustainable and that no deforestation has been carried out, says a consulting firm involved in the technology.

Lardi and Partner Consulting GmbH managing partner Kamales Lardi said that apart from sustainability, discussions in Europe are also related to the competitiveness of palm oil compared to other oil crops, hence, highlighting the importance of direct-to-customer communication.

The Zurich-based firm is the founding company of BloomBloc Sdn Bhd, a strategic advisory and blockchain development company in Kuala Lumpur that focuses on sustainable supply chains.

“Palm oil is the most efficient, producing more oil per hectare than other oils at a lower cost. This will remain a point of contention in the European Union (EU) market, beyond the question of sustainability,” she pointed out.

Therefore, she said, the contentious point of deforestation, as well as issues relating to worker rights, land rights and displacement of indigenous communities could be effectively addressed through blockchain application.

She blamed a general bias against palm oil products mainly to the lack of information shared directly with the consumer base relating to the sustainability efforts, certification as well as positive biodiversity initiatives that are underway in Malaysia.

“There is also misinformation about palm oil compared to other crops. Having been involved in the blockchain solution development for palm oil over the last two years, I have also noticed this misunderstanding when I describe the solution we are developing.

“I believe the Malaysian palm oil industry could address this with direct-to-consumer communication,” she added.

Commenting on the EU Parliament’s plan to phase out the use of palm oil in transport fuels from 2024 and complete phase-out of imports of palm oil for transport fuels by 2030, Lardi said the palm oil industry should not be banned or eliminated as the commodity is a key source of income for millions of people in 42 developing nations and a key contributor to poverty eradication.

“On top of that, over 5% of the earth’s surface is covered by palm oil plantations, which will turn into waste land if we ban the use of palm oil.

“The best way to resolve the challenges in the palm oil industry is to drive sustainable production and prevent further deforestation. Here, blockchain provides the best solution in the market to-date,” she contended.

On the relevance of BloomBloc’s presence in the EU, Lardi said it allowed the BloomBloc team to leverage the expertise and experience of the European marketing in blockchain development and application.

She noted that Europe as a market is more matured in terms of blockchain development and most industries are growing to understand the benefits of blockchain application, particularly relating to transparency, trust and security in the supply chain.

“This offers great benefits to the palm oil industry when a blockchain solution is applied for the provenance of the FFB harvests.

“By applying blockchain technology to prove the origin of the palm oil and tracking the supply chain, the palm oil industry could quickly and effectively prove its intent to deliver on the promise of sustainability and demonstrates an open and trustworthy solution,” she added.

According to Lardi, the primary target audience of BloomBloc is the agriculture industry, specifically palm oil, as the industry is facing critical challenges that could be addressed by blockchain solutions.

“In addition, there is a time-critical element, as Europe prepares to limit the import and use of palm oil-based biofuels as well as palm oil products.

“We would like to deliver the blockchain solution for public and private players in the industry. However, our target audience also includes any industry or business area requiring transparency and traceability across the supply chain, where the BloomBloc solution we have built could be easily implemented,” she said.

Lardi said the company is also exploring aviation, manufacturing and other similar industries. – Feb 25, 2020, Bernama

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