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Blockchain, direct to consumer communication can help uplift palm oil's image

The application of blockchain technology in the palm oil industry would indicate the existence of a trusted solution in place to prove provenance, certify sustainability and encourage the industry positive growth, a consulting firm involved in blockchain said.

Lardi and Partner Consulting GmbH managing partner Kamales Lardi said the technology could help the industry overcome one of its biggest challenges, namely to be able to unequivocally prove that the fresh fruit bunches (FFB) harvested are certified sustainable and no deforestation has been carried out.

The Zurich-based Lardi and Partner Consulting is the founding company of BloomBloc Sdn Bhd, a strategic advisory and blockchain development company focusing on sustainable supply chains in Kuala Lumpur.

She said apart from sustainability, discussions in Europe are also related to competitiveness of palm oil compared to other oil crops, hence, highlighting the importance of direct-to-customer communication.

"Palm oil is the most efficient, producing more oil per hectare than other oils at a lower cost. This will remain a point of contention in the European Union (EU) market, beyond the question of sustainability,” she told Bernama.

Therefore, she said the contentious point of deforestation, as well as issues relating to worker rights, land rights, and displacement of indigenous communities could be effectively addressed through blockchain application.

She said a general bias against palm oil products is mainly due to the lack of information shared directly with the consumer base, relating to the sustainability efforts, certification, as well as positive biodiversity initiatives that are currently underway in Malaysia.

"Not only that, there is misinformation about palm oil compared to other crops. Having been involved in the blockchain solution development for palm oil over the last two years, I have also noticed this misunderstanding when I describe the solution we are developing.

“I believe the Malaysian palm oil industry could address this with direct-to-consumer communication," she said.

Commenting on EU Parliament's plan to phase out the use of palm oil in transport fuels effectively starting 2024 and complete phase-out imports of palm oil for transport fuels by 2030, she said the palm oil industry should not be banned or eliminated as the commodity is a key source of income for millions of people in 42 developing nations and a key contributor to poverty eradication. 

"On top of that, over five per cent of the earth’s surface is covered by palm oil plantations, which will turn into waste land if we ban the use of palm oil.

“The best way to resolve the challenges in the palm oil industry is to drive sustainable production and prevent further deforestation. Here, blockchain provides the best solution in the market to-date," she said.

Asked on the relevance of BloomBloc presence in the EU, she said it allowed the BloomBloc team to leverage the expertise and experience of the European marketing in blockchain development and application.

She said Europe as a market is more matured in terms of blockchain development and most industries are growing to understand the benefits of blockchain application, particularly relating to transparency, trust and security in the supply chain. 

"This offers great benefits to the palm oil industry when a blockchain solution is applied for the provenance of the FFB harvests.

“By applying blockchain technology to prove the origin of the palm oil and tracking the supply chain, the palm oil industry could quickly and effectively prove its intent to deliver on the promise of sustainability and demonstrates an open and trustworthy solution," she said.

She said the primary target audience of BloomBloc is the agriculture industry, specifically palm oil, as the industry is facing critical challenges that could be addressed by blockchain solutions.

"In addition, there was a time-critical element, as Europe prepares to limit the import and use of palm oil-based biofuels, as well as palm oil products.

“We would like to deliver the blockchain solution for public and private players in the industry. However, our target audience also includes any industry or business area requiring transparency and traceability across the supply chain, where the BloomBloc solution we have built could be easily implemented,” she said.

She added that the company is also exploring aviation, manufacturing and other similar industries.


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