Brazil could triple palm planted area in 10 years, industry leader says

SAO PAULO: Brazil ‌could more than triple its planted area for producing palm oil over the next decade by expanding cultivation on already deforested land in the Amazon, said Victor Almeida, president of industry association Abrapalma.
Demand for biofuels is expected to boost growth in the sector, where existing expansion has largely taken place on land that was cleared previously, avoiding environmental risks while ensuring a supply of sustainable vegetable oil, Almeida said in an interview.
Almeida’s comments come as the world confronts successive heatwaves amid ‌a warming climate, ‌prompting industries to find feedstocks for advanced ‌low-carbon ⁠biofuels such as ⁠sustainable aviation fuel.
“We’re going to reach 1 million hectares (2.47 million acres). Today we’re at 280,000 — that means more than tripling the sector. I think it’s possible to do that within 10 years,” said Almeida, who also chairs the board of Belem Bioenergia Brasil, one of the country’s largest palm oil ⁠companies.
Growth in the sector will be driven ‌by demand for biofuels, while ‌oil palm tree use in vegetable oil production will attract further investment, ‌he said.
The trees can only be planted on ‌land that was deforested before 2008, helping restore vegetation cover while generating income for smallholder farmers in the Amazon, Almeida said.
Those environmental regulations and a traceability system implemented by the state of Para ‌mean Brazil can provide buyers with assurances that palm oil used for biofuel production, including in ⁠Europe, ⁠is not linked to deforestation, Almeida said.
Companies in the sector operate their own plantations but rely on smallholder farmers to supplement feedstock supplies, Almeida said, adding smaller producers can access subsidized credit.
Under that model, companies sign long-term purchase agreements with growers tied to commodity prices, providing predictability for both sides, he said.
Even so, a state-backed policy to shield the sector from recurring import tariff exemptions on palm oil and ensure long-term financing for all producers will be key to the industry’s success, he said, not only for smallholder farmers but also for larger producers and companies.