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The Paris Agreement and the Role of the Malaysian Palm Oil Industry

Prepared by: Michael Ng, Senior Executive, SED

12th December 2015 saw the announcement of the landmark Paris Agreement, which is a new international agreement on climate change.1 Dubbed as the ‘world’s biggest diplomatic success’ by the Guardian UK2, this historic announcement officially meant that all participants at the United Nations Conference on Climate Change Conference of Parties 21 (COP 21), which included the United States, China and Germany have acknowledged that climate change will adversely affect the planet if no tangible efforts are taken to reduce greenhouse gas (GHG) emissions.

As such, the Paris Agreement, named after the COP 21 host city has adopted a series of resolutions to address the issue.1,2 Key resolutions include:

  1. Limiting emissions to ensure that the rise in global temperature is below 2 o C, compared to pre-industrial levels (It has been reported earlier by IPCC that a rise of temperature more than 2 o C would have adverse climate change consequences)
  2. A target to limit the global temperature rise to 1.5 o C above pre-industrial levels, if possible
  3. Countries to review their progress towards this target every 5 years
  4. Developed countries promises to contribute towards a USD100 billion fund to help developing countries achieve this target
  5. Countries affected by climate change-related disasters, especially island nations  to receive financial aids

Malaysia, which was involved in the COP 21 is committed to ensure that the country will play its role to ensure that the Paris Agreement targets be met. In November 2015, Malaysia submitted its Intended Nationally Determined Contributions (INDC) to UNFCCC, with a commitment to reduce GHG emissions by 45 % by 2030.3 This will be achieved through reductions from the energy, agriculture and the land use change and forestry (LULUCF) sectors.

The Malaysian palm oil industry is anticipated to play a major role in the reductions. The use of palm-based biofuels and bioenergy is expected to reduce GHG emissions by up to 82%, compared to conventional fossil fuels.4 By 2020, when palm oil mills in Malaysia are all fully-equipped with biogas capture facilities, the carbon footprint for Malaysian palm oil is estimated towards reduction by 53%.5 Malaysia’s oil palm plantations, with 5.4 million hectares planted in area is also the country’s second largest CO2 sink.6

Scenario GHG Emissions
(million t CO2 eq/year)
GHG reduction (compared to no biogas capture) / %
Crude Palm Oil production with no Biogas Capture 18.66 0
Crude Palm Oil production with 10% Biogas Capture 17.66% 5.4%
Crude Palm Oil production with 100% Biogas Capture 8.67 53.5%

 Source: Vijaya et al (2014)5


  1. United Nations Conference on Climate Change COP 21 official website,
  2. ‘Paris climate change agreement: the world’s greatest diplomatic success’, 14 December 2015, the Guardian UK website,
  3. COP21: ‘Malaysia To Push for Climate Change Agreement at Paris Summit’, 5 December 2015, Bernama website,
  4. J.M. van Zutphen, R.A. Wijbrans, LCA GHG emissions in production and combustion of Malaysian palm oil biodiesel (2011), Journal of Palm Oil, Health and the Environment, Volume 2:86-92,
  5. Vijaya Subramaniam, Choo Yuen May, Halimah Muhamad, Zulkifli Hashim, Malaysia palm oil’s life cycle assessment incorporating methane capture by 2020 (2014), Journal of Palm Oil, Health and the Environment, Volume 5:49-54,
  6. Dr. Ismail Harun, Carbon Stocks and Emissions of Malaysian Forests (2014), presented at the International Palm Oil Sustainability Conference 2014 (IPOSC), 19-20 August 2014,

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