The root cause of deforestation is poverty

A recent, satellite-based survey released by the UN Food and Agriculture Organization (FAO) together with many global institutions in 2011 shows that areas of forest land decreased with increasing speed between 1990 and 2005.

The world's total forest area in 2005 was 3.7 billion hectares, or 30% of global land area. During 1990–2005, the net loss totaled 72.9 million hectares, nearly equaling the combined land areas of Finland and Sweden. Deforestation is partially offset by afforestation and natural expansion but the change is quick: the planet lost nearly 10 hectares of forest per minute over these 15 years.

Deforestation largely occurred in the tropics, most probably attributable to the conversion of tropical forests into agricultural land, FAO experts conclude. Illegal logging, urbanization, mining, and infrastructure construction are all significant causes of deforestation. The root cause for several factors is, however, poverty. Continuous efforts to alleviate poverty must remain high on the international agenda as a result.

Neste Oil continues to supply sustainably cultivated raw materials from Southeast Asia. Smallholders (family managed 2-4 hectare holdings) account for 40% of palm oil production, and are expected to be the majority palm oil producers in 5 years. Supporting smallholder production provides a practical means to spread welfare. Neste Oil is actively contributing to projects aimed at promoting sustainable cultivation practices and certifications.

What can businesses do to reduce the risk of deforestation?

Combating climate change calls for both reducing of greenhouse gas emissions and securing and even increasing existing carbon sinks. In this respect, deforestation is a major challenge for all companies using forest risk commodities. The Forest Footprint Disclosure Project plays an important role in sharing knowledge on deforestation pressures. The project sets a level playing field for different businesses, enabling balanced benchmarking between sectors; something that is often ignored in industry-specific scorecards.

Biofuels are a major contributor to emission reduction – provided the supply chain is sustainable. In fact, the biofuel industry is currently the forerunner in the commodity sector, as European Union biofuel legislation sets strict sustainability criteria for the whole product chain. Due to strict legislation, the effects of land use change are virtually eliminated from the biofuels sector. The challenge is to expand similar sustainability requirements to cover other sectors and uses of forest risk commodities.

In the global arena, high expectations are put on the Convention for Biological Diversity and the initiative for Reducing Emissions from Deforestation and Forest Degradation in Developing countries (REDD+) under the UN Framework Convention on Climate Change. For many stakeholders, progress in implementing these initiatives has been too slow, however.

Pekka Tuovinen, Neste Oil’s Director, Sustainability and Supplier Compliance