11 May 2015
KLK OLEO: sustainable palm oil
KLK OLEO, member of RSPO, helps you achieve your sustainable vision with two supply chain models
As part of the publicly listed reputable international group Kuala Lumpur Kepong Berhad (KLK), KLK OLEO meets all criteria of the RSPO Supply Chain Certification (SCC) systems and offers two supply chain models under the RSPO guidelines: the Mass Balance Model and the Segregation Model depending on the capability of the individual production site.
The Mass Balance Model
The Mass Balance Model allows mixing of certified oil and non-certified oil at any stage of the supply chain, provided that the overall certified oil quantities used are controlled and accounted for.
The key point for the Mass Balance Model is that the volumes of RSPO-certified products shipped by a producer must never exceed the volumes received. The basis of the supply chain requirements for the Mass Balance Model consists of reconciliation between the quantity of RSPO material bought, and the quantity of RSPO certified products delivered.
There are no additional requirements regarding separate storing or control in the production process.
- Most popular and flexible
- Typically chosen in case of segregation is non-economically viable
The Segregation Model
This model assures that all of the physical products originate from RSPO-certified oil only. This approach requires that the RSPO-certified palm oil is kept separate from materials of non-RSPO origin at every stage of the production, processing, refining and manufacturing throughout the supply chain. This model, however, does allow the mixing of SG RSPO-certified palm oil and its derivatives from various SG RSPO sources.
- Fair share of complexity and impact on cost depending on product group
- Physical segregation is costly along the supply chain
- Physical segregation makes the segregation model very complex
The Roundtable on Sustainable Palm Oil (RSPO) is a non-profit organisation that aims to transform markets to make sustainable palm oil the norm. The organisation unites stakeholders from the palm oil industry to develop and implement global standards for sustainable palm oil. It has over 2000 members globally representing 40% of the palm oil industry and covering all sectors of the global commodity supply chain.
The global demand for palm oil is increasing and accounts for a large share of the world’s production of oils and fats. Given the great demand and the fact that millions of people are dependent on the raw material, there has been an urgent global call for sustainably produced palm oil.