Trading company Cargill has started building a dedicated sustainable palm oil refinery in Indonesia's Lampung province in southern Sumatra, which it plans to complete in late 2022.
The firm will invest $200mn in the plant but cannot specify capacity at this stage.
The plant will accept certified sustainable crude palm oil and process according to Cargill's sustainable palm oil policy. This will allow it to guarantee deforestation-free products throughout the entire palm oil supply chain and better cater to traceability demands of buyers in North American and European markets.
Long-running concerns about sustainability of palm oil cultivation have been heating up in Europe during the last year, with France, Austria, the Netherlands and Germany already or soon banning the use of palm oil-based biofuels in their markets, ahead of an EU-wide phase-out by 2030.
The US has also prohibited palm oil imports from two Malaysian companies on allegations of human rights abuses on plantations.
"This project is a key step for Cargill to increase the availability of sustainably sourced and produced edible oil ingredients for our customers," said Cargill Asia-Pacific president Robert Aspell.