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 seeks to make a material contribution towards this common goal.

REA has calculated and reported its carbon footprint annually since 2011 using the RSPO’s PalmGHG calculation tool (v.3.0.1), 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.

Changes in the calculation methodologies have led to some discrepancies between current and historic greenhouse gas emission calculations.  In addition, accounting adjustments to reflect the proportion of FFB that is processed in the group’s own mills each year will automatically lead to variations in the calculation of emissions from year to year.

In the past, emissions of methane from palm oil mill effluent (POME) was the biggest sources of GHG emissions to REA’s carbon footprint. However, 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.

POME that is not used for methane production, POME produced at SOM, and the digested POME residue of methane production, is treated in the traditional manner of being pumped through a series of open ponds to reduce its biological oxygen demand (BOD) and then used for land application in flat beds between rows of oil palm, allowing the remaining nutrient content to be used as a fertiliser. The BOD of the POME in the final open pond at each mill is tested on a monthly basis by a third party to ensure that it is below the legal limit for land application in Indonesia. All three mills continued to meet this standard in 2019.

In 2019, gross carbon dioxide emissions associated with the company’s oil palm operations in Indonesia were slightly lower compared to 2018, reflecting lower emissions from peat oxidation, fertiliser use and POME.  By contrast, there were slightly higher emissions from land conversion, whilst emissions from fuel consumption were broadly similar.  Net emissions in 2019 were higher than in 2018, first because some of the plantations are now over 25 years old and the PalmGHG calculator automatically assumes replanting after 25 years, so that they no longer sequester carbon even though this does not necessarily reflect  the facts, and second because of lower sequestration in the conservation areas following the sale of PBJ in 2018.

Contribution of each GHG source and sink to REA’s carbon footprint in 2019

Contribution to carbon footprint 2019

GHG emissions from land use change

In general, GHG emissions from land use change are the biggest contributor to 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 has actively contributed 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 2015, carbon stock assessments have been conducted prior to any new development using the RSPO’s carbon stock assessment tool, ensuring that the carbon stock of the land is taken into account in the land use planning process.

Reducing GHG emissions by methane capture

Greenhouse gas emissions from POME have been substantially reduced by the installation in 2012 of the methane capture facilities at POM and COM, to where a substantial portion of the POME produced is diverted for the generation of renewable energy.

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 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.