KUALA LUMPUR: Industry bodies and analysts are hopeful that the Malaysian Sustainable Palm Oil (MSPO) Standard MS2530:2022 (MSPO 2.0), which took effect on Jan 1, 2025, will open new markets for Malaysian palm oil and strengthen its position in the global edible oil scene.
The MSPO 2.0 establishes a new benchmark to strengthen sustainability and inclusivity in ethical palm oil production.
Among others it introduces a deforestation cut-off date to ensure all new plantings adhere to updated sustainability practices, preventing deforestation and ensuring responsible land use.
Starting Jan 1, 2025, the certification will apply only to areas that have not been deforested after Dec 31, 2019.
Other revisions in MSPO 2.0 include structural reorganisation - expanded from four to eight parts to cater to diverse industry participants, including smallholders, plantations, mills, and processors.
Streamlined principles, with consolidation to five principles from seven previously, to ensure greater clarity and practical application.
An enhanced sustainability criteria, with increased focus on greenhouse gas emissions, high conservation value areas, and social impact assessments, aligning with global sustainability goals.
Enhanced labour standards, with strengthened provisions against forced labour and child labour, emphasising fair labour practices and human rights.
Finally, a focus on transparency and ethical conduct, with an emphasis on traceability, anti-bribery measures, and ethical conduct to promote accountability in the supply chain.
Malaysian Palm Oil Board (MPOB) director-general Datuk Ahmad Parveez Ghulam Kadir told Business Times that MSPO 2.0 is set to enhance the credibility of Malaysian palm oil, with coverage of the full supply chain, including dealers.
"The revised version introduces a deforestation cut-off date that is a year earlier than the European Union Deforestation Regulation (EUDR).It also includes additional measures such as the High Conservation Value (HCV) approach, a Greenhouse Gas (GHG) calculator, and improved labour practices, all of which are expected to enhance its credibility and image further," Ahmad Parveez said.
He said the inclusion of MSPO on the International Trade Centre (ITC) Standards Map represents a form of international recognition, noting that not all certifications, such as Indonesia Sustainable Palm Oil (ISPO), are included on the list.
"This shows MSPO 2.0 is much more superior. We hope this will further strengthen our market especially in markets where sustainable practices are being recognised and surely the number of countries recognising sustainable practices are on the rise," he added.
Malaysian Palm Oil Association (MPOA) chief executive officer Roslin Azmy Hassan said the success of MSPO 2.0 relies heavily on gaining acceptance from stakeholders, customers, and certification bodies globally.
"MPOA emphasises the importance of MSPO 2.0 being recognised and accepted as a reputable global standard.Its alignment with international sustainability requirements enhances the competitiveness of Malaysian palm oil in key export markets and reinforces our position as a responsible and sustainable producer," he said.
Roslin said the association welcomes the launch of MSPO 2.0, as a significant enhancement to the nation's sustainability framework.
He said the revised standard underscores Malaysia's commitment to producing sustainable and responsibly sourced palm oil, meeting the expectations of both local and international stakeholders.
Meanwhile, CIMB Investment Bank Bhd head of research and head of agribusiness Ivy Ng Lee Fang said the MSPO certifications will assure buyers that the palm oil they buy from Malaysia with MSPO certifications meets certain sustainability requirements.
She highlighted the need to constantly update the standard to align with global sustainability requirements.
The MSPO certification has been mandatory for all palm oil producers in Malaysia since 2019, ensuring compliance with rigorous sustainability and traceability standards.
As of April 2024, some 4.94 million hectare (ha), or 87.4 per cent, of the palm oil plantations in Malaysia, and 407 of the 446 palm oil mills have been certified under the MSPO.
About 151,152 smallholders, covering 542,215 ha (66 per cent), have also obtained certification during the same period.
Audits are conducted by independent, third-party accredited certification bodies, guaranteeing that the highest levels of integrity and credibility are upheld.
MSPO 2.0 offers smallholders the opportunity to access premium markets by complying with global ESG standards. Tailored training, technical assistance, and resources are provided to help smallholders stay competitive and meet market demands for sustainable palm oil.
For larger industry players, MSPO 2.0 provides a mandatory framework that improves the integrity of the supply chain, reduces regulatory risks, and strengthens alignment with global sustainability benchmarks.
This framework helps ensure long-term viability for producers and helps mitigate environmental and social risks associated with palm oil production.
For global buyers, MSPO 2.0 enhances traceability and ensures compliance with international sustainability standards, such as the European Union Deforestation Regulation (EUDR).
This certification offers global buyers confidence in the sustainability of Malaysian palm oil, making it a trusted, sustainable choice for international markets.
MSPO 2.0's listing on the ITC Standards Map, boosts Malaysia's credibility in the international market and increases the visibility of Malaysian palm oil among global buyers and stakeholders.
Minister of Plantation and CommoditiesDatuk Seri Johari Abdul Ghani said the MSPO certification demonstrates Malaysia's unwavering dedication to meeting global sustainability standards while ensuring that every stakeholder, from smallholders to large industry players, benefits from equitable access to markets.
"MSPO 2.0 represents the next step in ensuring Malaysian palm oil remains synonymous with sustainability and reliability in global markets."Through this enhanced standard, we are safeguarding the future of our palm oil industry while continuing to lead by example on the global stage," he said in a statement.