KUALA LUMPUR (Nov 3): The Roundtable on Sustainable Palm Oil (RSPO) is open to exploring a carbon-sequestration payment mechanism that would enable smallholders to earn additional income from sustainable practices, said the organisation’s head of smallholders unit Guntur Prabowo.
The proposed mechanism would reward farmers for capturing and storing carbon dioxide through climate-smart practices such as no-burn land clearing, soil enrichment, forest preservation and tree replanting.
The amount of carbon absorbed or prevented from release would be measured and verified, with each tonne of carbon dioxide equivalent generating one carbon credit that can be sold in carbon markets.
“We would love to explore that,” Guntur told The Edge on the sidelines of the Annual Roundtable Conference on Sustainable Palm Oil (RT2025).
“Our MOU (memorandum of understanding) to be signed tomorrow (Tuesday) will explain more on that — looking at it as an alternative. But it’s not an easy journey; it’s something new for us, and there’s complexity in how the rewards and the carbon market itself will work,” he said.
RSPO, the global certification body for sustainable palm oil, will sign an MOU with the Asia School of Business (ASB) through its Centre for Sustainable Small-owners (CSS) and the National Association of Smallholders (NASH) on Tuesday morning to strengthen smallholder resilience through training, digital readiness and sustainable financing initiatives.
“We support any initiative that brings smallholders more added value by being good and sustainable. We have to find whatever works — whether through carbon credits, better yields or stronger partnerships,” Guntur added.
International civil-society organisation Solidaridad, in its 2025 Palm Oil Barometer report titled Procurement for Prosperity, also highlighted the potential of rewarding oil palm farmers for carbon sequestration as an additional source of income.
The approach, it said, would enable smallholders to participate in international carbon markets by selling verified carbon-removal units — a model already being tested in the coffee and cocoa sectors.
Solidaridad, which advocates sustainable and inclusive value chains, continues to support smallholders in adopting responsible and climate-resilient farming practices.