The study examines how Sentinel data is being used to monitor deforestation activities associated with palm oil production. The palm oil industry is highly profitable but can often be linked to environmentally damaging practices. Increased demand for palm oil is leading to deforestation in Indonesia, Malaysia and other countries in tropical regions. Deforestation contributes to climate change, reduces biodiversity, and destroys tropical eco-systems.
Satelligence, a Dutch remote sensing company, have developed services using Sentinel-1 and Sentinel-2 data which can detect and monitor deforestation activities associated with the production of palm oil. The service creates what are known as “deforestation alerts”, which let clients know that deforestation is occurring on or near plantations that they are sourcing palm oil from. Bunge, a major player in the food industry, is using Satelligence’s services to ensure the palm oil they source from Malaysia and Indonesia is coming from reputable sources and not contributing to deforestation, habitat loss and climate change.
By utilising free and open Sentinel data, Satelligence and Bunge act as catalysts for the entire palm oil value chain to reduce its environmental impact. The economic benefits quantified in this case range from EUR 19m to EUR 33.6m pa derived from revenues accrued by Satelligence, access to favourable interest rates on sustainability-linked loans for Bunge and premium pricing for certified sustainable palm oil for producers.
In the final tier of the value chain, the end users – the customers and consumers of final products –benefit from purchasing sustainably sourced palm oil with the knowledge and this has reduced environmental impact on the areas from where it is sourced. Other beneficiaries from the use of the satellite-based deforestation monitoring, include:
Some of the report’s findings of non-quantified impacts across different areas are briefly summarised below:
Environmental – the authors consider that possibly the greatest benefits to be found in this study are the positive contributions to environmental sustainability across every tier of the value chain analysed. By using Satelligence’s service, Bunge is assisted in detecting deforestation and can enable actors to make informed decisions to counteract it. This contributes to supporting the reduction of deforestation, protecting natural habitats, minimising peatland conversion, and reducing the cultivation of palm oil’s impact on climate change.
Regulatory – the transparency and objectivity of Sentinel imagery allows for better monitoring and enforcement of sustainability commitments by authorities.
Entrepreneurship and innovation – the study finds that Satelligence have contributed greatly to the creation and championing of innovative services and entrepreneurship in remote sensing with the development of their deforestation monitoring service.
Science and technology – the development of the system has contributed to the scientific and technological landscape.
Societal – the transparency brought about by the service protects rural communities and the fight against resource exploitation. A shared understanding of sustainable production also contributes to a greater sense of social cohesion amongst local workers within those rural communities.
The service provider Satelligence save large amounts of operational costs as their primary input data source is free. They study quantifies the economic value added as the direct result of using Sentinel data to be EUR 1.5m – EUR 6.3m pa.
The primary user Bunge benefits by using Satelligence’s services in several ways by being able to verify and demonstrate that the palm oil they source is deforestation free thereby upholding their corporate reputation (the authors consider that its reputation could be worth as much as EUR 3.4m). The authors calculate that a concrete and economic benefit to Bunge could amount to up to around EUR 5.3m pa from Bunge’s ability to demonstrate its sustainability credentials in its financing arrangements.
The secondary beneficiary is the supply chain actors (plantations, mills and refineries upstream of Bunge) who can gain higher prices for their certified palm oil as well as maintaining a reputation for environmentally friendly activities. The study finds the current and future estimates of economic benefits to these actors to be EUR 12.5m – EUR 22.3m pa.
Total anticipated benefits are estimated to be EUR 19m – EUR 33.6 pa.
Find this article at:
https://earsc.org/sebs/deforestation-monitoring-for-sustainable-palm-oil-production/
This case study, undertaken by the European Association of Remote Sensing Companies (EARSC), is one in a series of case studies from the Sentinel Economic Benefits Study (SEBS) – a large study to show how Earth Observation (EO) derived products and services, based on data generated by one or more Sentinel satellites, deliver value to society and citizens.