Forests are the largest, most complex, multi-species, multi-functional, and multi-beneficial ecosystems on land and are the mainstay of terrestrial ecosystems. Forests not only provide the materials and ecosystem services necessary for social development, but are also key to addressing environmental crises such as climate change and biodiversity loss. Since 1990, the world has lost about 420 million hectares of forest to deforestation[1], and the proportion of forest area to the world's land area declined from 31.9% (4.2 billion hectares) in 2000 to 31.5% in 2010 and to 31.2% (4.1 billion hectares) in 2020[2]. Experts indicate that the production of bulk soft commodities (including unsustainable palm oil, soybeans, beef, and wood products) is one of the major drivers of global deforestation today[3][4].

Palm oil is the world's leading vegetable oil and has become a major driver of agricultural economic development in Southeast Asia, Papua New Guinea, Central Africa, parts of West Africa, and tropical South America[5]. As of today, global palm oil production continues to grow and has reached 76.52 million tons in September 2021. Indonesia and Malaysia are the largest palm oil producers, accounting for 58% and 26% of global palm oil production, respectively[6]. Meanwhile, the rapid expansion of unsustainable oil palm cultivation in Southeast Asia has caused many negative ecological impacts, such as forest reduction, biodiversity loss, peatland loss, land use change, and greenhouse gas emissions.

In the global supply chain, China is the second largest importer and the third largest consumer of palm oil worldwide, and the total amount of palm oil imported by China in 2020 was 7.2 million tons[7]. Most of the palm oil imported by China is used to process food and industrial products for domestic consumption[8]. Currently, 70% of China's palm oil is used in the food industry, including frying fats (instant noodles), baking fats (cooking oils), and confectionery fats (chocolate); the rest is used in non-food industries, such as cosmetics, surfactants, cleaning agents, etc[9].

The risk of deforestation is being actively addressed globally, and the public, international organizations, and regulatory agencies are continuously focusing on the issue of deforestation. To ensure sustainable palm oil production, Malaysia and Indonesia have developed mandatory certification agreements, Malaysian Sustainable Palm Oil (MSPO) and Indonesian Sustainable Palm Oil (ISPO) respectively, to regulate palm oil suppliers to meet sustainability requirements. The Roundtable on Sustainable Palm Oil (RSPO) unites stakeholders from seven sectors of the palm oil industry (oil palm producers, processors or traders, consumer goods manufacturers, retailers, banks/investors, and environmental and social NGOs) and as of today has 5,235 members worldwide, representing all segments of the palm oil supply chain[10]. They are committed to producing, sourcing and/or using RSPO certified sustainable palm oil.

China is committed to environmental improvement and sustainable development, and has pledged to develop a low-carbon economy, mitigate climate change and protect biodiversity. The Chinese market plays an important role in driving the global "sustainable palm oil as a market norm" and has shown great potential for growth. In 2018, RSPO, together with the China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA) and the World Wide Fund for Nature (WWF), launched China Sustainable Palm Oil Alliance (CSPOA) to promote sustainable palm oil in China. The proportion of RSPO-certified palm oil in China accounts for 6% of China's palm oil market share by the end of 2020[11]. In addition to the promotion by NGOs and industry associations such as RSPO, more and more companies have committed to using sustainable palm oil (e.g. COFCO International, L'Oreal (China), etc.)[12], and consumers' willingness to purchase products produced from sustainable palm oil is gradually increasing, with survey data showing that public awareness of RSPO has increased from 5% in 2015 to 21% in 2020[13], and 33% of consumers are already willing to pay a premium to purchase corresponding sustainable palm oil products. 

However, the development of sustainable palm oil also faces certain challenges, such as cost disadvantages, rigid policy requirements and lack of guidance[12]. Addressing these challenges will require the concerted efforts of stakeholders along the palm oil value chain to promote the adoption of sustainable palm oil products and reduce the "risk of deforestation".

[1] Food and Agriculture Organization of the United Nations (FAO), Global Forest Resources Assessment (FRA) 2020, https://www.fao.org/forest-resources-assessment/2020/en/

[2] FAO, https://www.fao.org/sustainable-development-goals/indicators/1511/en/

[3] China Dialogue, How to eliminate the deforestation risks of palm oil imported to China? https://chinadialogue.net/en/business/how-to-eliminate-the-deforestation-risks-of-palm-oil-imported-to-china/

[4] China Dialogue, Deforestation is slowing, but palm oil still major driver, https://chinadialogue.org.cn/en/nature/palm-oil-and-deforestation-today/

[5] China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA), Prospects and Challenges of Sustainable Palm Oil for China, https://www.rspo.org/file/Prospects_and_Challenges_of_Sustainable_Palm_Oil_for_China.pdf

[6] U.S. Department of Agriculture (USDA), https://ipad.fas.usda.gov/cropexplorer/cropview/commodityView.aspx?cropid=4243000&sel_year=2021&rankby=Production

[7] CDP, THE HIDDEN RISK: The implications for Chinese financial institutions of forest-related risk within the palm oil supply chain，https://www.cdp.net/en/reports/downloads/5815

[8] World Wide Fund for Nature (WWF), Sustainable Palm Oil Uptake In Asia: Where Do We Go From Here? https://www.evidensia.eco/resources/1243/sustainable-palm-oil-uptake-in-asia-where-do-we-go-from-here/

[9] Chinese demand boosts sustainable palm oil industry (in Chinese), https://www.cenews.com.cn/news/bwdt/202106/t20210607_976685.html

[10] Roundtable on Sustainable Palm Oil (RSPO), https://rspo.org/impact#membership-figures

[11] RSPO, Congratulations on the success of the 2021 China Sustainable Palm Oil Supply Chain Forum and the 5th RSPO China Forum (in Chinese), https://mp.weixin.qq.com/s/LL_knO-7SONCZ4-gqn_Fpg

[12] RSPO & SynTao, China Sustainable Palm Oil Strategy Report (in Chinese), http://www.syntao.com/newsinfo/554727.html

[13] China's strong consumer power boosts biodiversity RSPO promotes sustainable palm oil in the 'rainforest' (in Chinese), http://china.qianlong.com/2020/1124/5045099.shtml