How Malaysia’s palm oil industry is cultivating a greener tomorrow

Observed annually on June 5, World Environment Day is a pivotal global platform, with its recurring calls for individuals, communities and industries to rally together to solve pressing environmental challenges.

While this year’s theme casts the spotlight on plastic pollution, its overarching message is to safeguard our planet. Embracing the call for collective action, Malaysia’s palm oil sector has proactively embarked on a transformative journey, demonstrating unwavering commitment to environmental and climate stewardship.

The significance of Malaysia’s palm oil industry cannot be overstated. This is a sector that serves as a crucial economic backbone for the nation, not least its more than 450,000 smallholders. This means the industry does not only contribute a large percentage to Malaysia’s gross domestic product (GDP) and export earnings, but also directly supports the livelihoods of a vast number of rural families.

Crucially, this economic powerhouse is confronting its environmental responsibilities. Recognising the industry’s considerable environmental footprint, Malaysian plantation players have united to collectively take responsibility for the industry’s environmental impact and drive its sustainable transformation. This commitment echoes the sentiment expressed by British explorer and environmental activist Robert Swan, who famously said over a decade ago, “The greatest threat to our planet is the belief that someone else will save it.” This powerful truth resonates strongly even today, motivating the industry to adopt a more forward-thinking vision for the planet.

A pivotal effort is the mandatory Malaysian Sustainable Palm Oil (MSPO) certification scheme, now in its second iteration. With more stringent requirements, MSPO 2.0 is capable of meeting the deforestation free demands laid out by the European Union Deforestation Regulation (EUDR). For instance, MSPO 2.0 mandates that there will be no conversion of natural forests, protected areas, and High Conservation Value (HCV) areas into oil palm plantations after Dec 31, 2019 — a full year prior to the EUDR’s stipulation.

To curb their carbon footprint, some Malaysian palm oil players are implementing methane capture technologies. This innovative method manages biogas from palm oil mill effluent (POME), processing wastewater and converting it into renewable energy at facilities like Cenergi SEA’s Langkap Biogas Plant. Solid palm biomass offers similar potential.

During the April visit of Minister of Plantation and Commodities Datuk Seri Johari Abdul Ghani to the Cenergi Sua Betong Biogas Plant in Port Dickson, Negeri Sembilan, he highlighted that since January 2014, all new or expanding mills are required to install biogas capture systems. By December 2024, 170 (38%) of the 446 operating mills had implemented these facilities, surpassing the National Agricommodity Policy 2025 target of 155 mills. This contributed to a reduction of greenhouse gas (GHG) emissions by 4.9 million tonnes of carbon dioxide, he said.

These efforts align with Malaysia’s commitment to reach net zero GHG emissions by 2050, despite only contributing about 0.8% to global GHG. Initially articulated in the 12th Malaysia Plan (2021-2025), this commitment is reinforced by the National Energy Transition Roadmap (NETR). Still, the widespread adoption of methane capture has faced hurdles due to significant practical and financial challenges for mills, highlighting the need for stronger, collaborative government support.

According to Johari, Malaysia produced 63.5 million tonnes of POME in 2022, which could have generated 1.8 billion cu m of biogas. This is capable of producing an average of 1.22GW of energy per year.

The industry’s commitment to sustainability extends beyond emission reduction. Beyond adherence to the stringent No Deforestation, No Peat, No Exploitation (NDPE) policy, palm oil players are actively stepping up their biodiversity conservation efforts, demonstrating a comprehensive approach to environmental stewardship.

For instance, Tawau-based Sabah Softwood Berhad (SSB) established a 1,067ha wildlife corridor in 2013 to connect fragmented forest areas. This 14km corridor actively links two major forest reserves, Ulu Kalumpang and Ulu Segama, facilitating safe passage for wildlife — particularly Borneo elephants — and significantly reducing human-wildlife conflict.

Similarly, IOI Corporation Berhad’s practices include conserving trees, flora and fauna in buffer zones and steep areas unsuitable for oil palm planting, and setting up a sanctuary for proboscis monkeys at one of its estates. IOI also conducts biodiversity studies of flora and fauna species across its plantations, having identified 337 flora and 227 fauna endemic species to date, and is a strategic partner in the Malua Wildlife Conservation Initiative.

To bolster its environmental and biodiversity protection efforts, the Malaysian palm oil industry is increasingly leveraging innovation and technology to make a difference. Digital traceability solutions — such as e-MSPO, a digital system that monitors the certification process, and MSPO Trace, a traceability system designed to track palm oil products along the supply chain — enhance supply chain transparency, which is vital for consumers and markets demanding sustainably sourced products. This transparency directly aids in verifying NDPE compliance.

Concurrently, plantations are embracing mechanisation and automation. These advancements are largely spearheaded by research and development facilitated by entities like MARCOP (Mechanisation and Automation Research Consortium of Oil Palm), which operates as a platform for government-industry collaboration offering matching grants to drive related research.

This shift towards drones, robots and sensors not only boosts operational efficiency but also plays a crucial role in reducing the environmental footprint of palm oil cultivation. SD Guthrie, for instance, utilises drones equipped with Global Positioning System (GPS) and artificial intelligence (AI) to apply fertilisers and pesticides precisely where needed. This approach substantially cuts the overall volume of chemicals used, thus preventing widespread contamination of soil and water and minimising harm to non-target flora and fauna. Meanwhile, Genting Plantations deploys drones to pinpoint fires in remote and inaccessible locations.

On World Environment Day, Malaysia’s palm oil industry stands as a testament to collective action. The proactive steps taken — from its updated MSPO certification scheme to its commitment to transparency — underscore a clear vision for sustainability and demonstrates that economic growth and ecological responsibility can converge, cultivating a genuinely greener tomorrow.