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R.E.A Holdings PLC

As a rapidly growing industry with a large land footprint, palm oil producers have an important role to play in reducing GHG emissions and limiting the environmental and socio-economic risks posed by climate change. REA intends to make a material contribution towards this common goal.

REA has calculated its carbon footprint annually since 2011 using the RSPO’s PalmGHG tool, of which the group was one of the earliest adopters. This tool uses a lifecycle assessment approach, whereby all of the major sources of GHG emissions are quantified and balanced against the carbon sequestration and GHG emissions avoidance linked to palm oil production by a specific palm oil mill. The net GHG emissions are expressed per tonne of product produced (CPO and CPKO), as well as per hectare of oil palm planted. This is known as the GHG emissions intensity.

Land use change and emissions of methane from palm oil mill effluent (POME) are the biggest sources of GHG emissions to REA’s carbon footprint. In past years, REA achieved significant reductions in the GHG emissions intensity of its operations. This is largely attributable to the installation of methane capture facilities at the group’s longest established palm oil mills in 2012. Not only do these facilities reduce the volume of this potent GHG which is released to the atmosphere by the anaerobic digestion of POME, but they also convert it to electricity. This in turn reduces the need to use diesel powered electricity generators, thus further reducing the group’s GHG emissions.

GHG emissions from land use change

GHG emissions from land use change remain the biggest component of REA’s carbon footprint. For future developments, REA has the opportunity to minimise GHG emissions from land use change by prioritising lower carbon stock areas for oil palm development. The group is actively contributing to the development of practical methodologies for conducting scientifically rigorous carbon stock assessments by participating in the RSPO’s GHG emissions reduction working group. Since January 2015, carbon stock assessments have been conducted prior to any new development using the RSPO’s carbon stock assessment tool. This will enable the carbon stock of the land to be taken into account in the land use planning process.

Reducing GHG emissions by methane capture

The strength of REA’s commitment to reducing GHG emissions is demonstrated by the material capital investment made to install methane capture facilities at the group’s two longest established palm oil mills. Whilst the GHG emissions associated with the treatment of POME remains the second largest component of the group’s carbon footprint, a 50% reduction has been achieved since the methane capture facilities were commissioned in 2012.

Perhaps even more remarkable than the GHG emissions savings achieved by the methane capture facilities is the fact that they also generate enough electricity to power all of the group’s mills and the majority of the operational and domestic buildings.

Whereas in 2011 REAK and SYB used nearly 2.8 million litres of diesel to power electricity generators, this was reduced to 460,000 litres in 2014 as a result of the production of over 18,500 megawatt hours of renewable electricity by the two methane capture facilities. Considering that the electricity demand of the REAK and SYB operations has increased since 2011, diesel savings due to the installation of the methane capture facilities are estimated to be well in excess of 2.3 million litres of diesel per year. This represents a significant reduction to both the group’s cost of production and its GHG emissions.

Renewable and non-renewable energy consumption by REAK and SYB's operations 2011 - 2014