Compared to mature markets like Europe and the United States where over 90 per cent of total palm oil imports are certified sustainable, bolstering the uptake of sustainable palm oil among Chinese firms has been an uphill task over the past decade.
The challenge also persists as the Chinese government has yet to introduce regulations that target palm oil sustainability – equivalent or similar to the European Union Deforestation Regulation (EUDR). In China, firms and palm oil buyers are more sensitive to top-down policy signals and are harder to persuade, said Fang Lifeng, who helms the Beijing office of palm oil trade certifier Roundtable on Sustainable Palm Oil (RSPO).
Uptake of certified sustainability palm oil in China, which is the world’s second largest importer of the commodity, has been at about 8 to 9 per cent.
Yet, in the past year, there has been greater momentum among Chinese firms to position themselves as leaders, not only in the domestic market, but in building a global green value chain, Fang shared in an interview with Eco-Business, as he reflects on a decade of RSPO in the emerging market.
In this interview, RSPO China head Fang Lifeng shares his reflections and insights from RSPO’s decade of presence in the emerging market. Image: RSPO
The trend is consistent with an overall drive seen across the Chinese market, as firms align with investor expectations surrounding environmental, social and governance (ESG) concerns, said Fang. The three major stock exchanges in China now have stricter requirements for ESG reporting and sustainability-related disclosures, and this also has an impact on the decisions that Chinese firms make.
“In our conversations with Chinese companies, the signal they have sent is a strong one – that they recognise that prioritising sustainable development is essential in the long run. They know that the earlier they are prepared, the greater their chances of seizing new opportunities.”
With nearly 500 RSPO members, China currently consumes approximately half a million tonnes of certified sustainable palm oil annually. It is seeing a rise in both awareness and corporate commitment to sustainable sourcing practices, Fang said.
RSPO will discuss emerging policies in China that have been steering firms towards best practices in procuring palm oil at its annual China forum that will convene in picturesque Guilin this week. In this interview, Fang shares more of RSPO’s work in a market that it increasingly views as critical to scale sustainable palm oil certification globally.
At RSPO Roundtable 2024 in Bangkok, Thailand, Yili, an RSPO member, signed sustainable palm oil sourcing agreements with three strategic partners, including Yihai Kerry, as well as two major international traders, Bunge and Cargill. Image: RSPO
This year marks a decade of RSPO’s presence in China. Can you share some of the major milestones RSPO has achieved over this time?
Since the RSPO Beijing office was set up in 2015, the most notable progress has been the expansion of RSPO membership in China and growth in the procurement of RSPO-certified sustainable palm oil. Then, we had around 50 member companies, and as of May 2025, membership has increased to 480, and includes several well-known companies across the entire palm oil value chain – from processing and trade to manufacturing and retail. Leading brands in the Chinese market are now RSPO members, such as COFCO Group, Yihai Kerry, Yili, Shanghai Jahwa, and Proya.
With years of effort, our latest data also shows that by the end of 2023, the procurement volume of RSPO-certified sustainable palm oil in China had reached nearly 500,000 tonnes, accounting for 8.7 per cent of total palm oil procurement in the same year. When we first set up our office in China, the procurement volume was less than one per cent, so we are seeing very encouraging progress. By the end of last year, over 350 companies had obtained RSPO certification for their products. These members have driven market uptake and momentum. China’s clout and influence in sustainable palm oil have grown significantly.
We have also seen the emergence of exemplary corporate case studies. In previous years, Chinese companies mainly participated in the global sustainable supply chain as suppliers, driven largely by the need for compliance with the requirements of international brands or clients from Europe and the United States. However, we are now seeing some Chinese local brands – including leading domestic companies – become key members of the RSPO.
An example is Yili, one of the top dairy producers globally. At last year’s RSPO Roundtable in Bangkok, Thailand, Yili, an RSPO member, signed sustainable palm oil sourcing agreements with three strategic partners, including Yihai Kerry, as well as two major international traders, Bunge and Cargill. The agreement promotes the trade and import of RSPO-certified sustainable palm oil, and marks the first time RSPO saw a Chinese palm oil buyer with international influence take collective action with its suppliers. It is a strong case study we try to showcase as it demonstrates collaboration among global food companies. We also saw positive feedback from our international community of members.
Since then, Yili has gone on to procure and import its first batch of 750 tonnes of identity-preserved (IP)-level RSPO-certified sustainable palm oil, which arrived at the Shanghai port in November last year. This is the first shipment of IP-level RSPO-certified sustainable palm oil – the highest standard of certification within the RSPO system – to China and marks a significant milestone both for the company and for the Chinese market. Whether it is in sustainable operations or traceability, Yili has demonstrated strong ambition in the domestic and global markets.
Yihai Kerry, which played a key role in the partnership, also has a Shanghai factory facility that is the first in China to achieve RSPO-IP certification for its sustainable palm oil processing. Hence the collaboration also demonstrates how infrastructure development features in supporting the IP-certified sustainable palm oil supply chain.
Other Chinese palm oil firms in the supply chain upstream such as cosmetic brands Shanghai Jahwa and Proya have also made solid progress in sustainable palm oil sourcing. We are starting to see Chinese companies displaying strong leadership on this front.
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One thing is clear: the sustainable palm oil supply chain in China is resilient and the broader agenda of sustainability is a long-term trend here. Companies see that it presents more opportunities than challenges.
I want to add that as RSPO has gradually adjusted its positioning in recent years to emphasise its vision of building and strengthening global partnerships, our work in China has also progressed in this direction. Since the establishment of the RSPO China office, we have continuously deepened the relationships with our partners and strived to build an important platform for all parties to engage in dialogue on sustainable palm oil issues.
The upcoming RSPO China forum in Guilin marks the 9th forum we have organised in China. Since 2016, we have worked with organisations such as the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-products (CFNA) and WWF China – that have long promoted sustainable palm oil – to organise the annual forum. We bring together RSPO members and non-members from across the supply chain, other chambers of commerce, government agencies, research and certification bodies, to discuss palm oil-related issues. The forum is now the largest platform for sustainable palm oil issues in China.
In 2018, RSPO partnered with CFNA and WWF China to launch the China Sustainable Palm Oil Initiative (CSPOA) with the aim of mainstreaming the concept of certified sustainable palm oil. We hope that companies with strong sustainability credentials in the palm oil supply chain, can work alongside other institutions that have been long-time advocates of the topic – including financial institutions, certification bodies and non-governmental organisations (NGOs) – to advance this issue in China. CSPOA currently has 26 members.
What are some external factors that have challenged RSPO’s work in China for the past over the last 10 years?
The Covid-19 pandemic, the China-US trade war and many other international geopolitical conflicts have been impactful. In 2022, Indonesia’s temporary ban on palm oil exports affected the market as well.
In addition, the long-term and increasingly severe impacts of climate change also affect the import and use of palm oil in China.
During the pandemic, especially when cities were under lockdown, many factories faced difficulties due to a lack of export orders and production line shutdowns. Export bans had a direct impact on palm oil prices. Like the rest of the global market, we were unable to carry out in-person activities at the time, but we focused on building the capacity of corporate members through online webinars and activities. We introduced RSPO’s processes and principles through virtual platforms to help companies navigate the crisis.
Over the last two years, we have also observed a general slowdown in China’s overall economic growth. This has had a clear impact on palm oil. In 2024, total palm oil imports dropped to their lowest level on record, to just over 4 million tonnes. Since the second half of last year, palm oil prices have remained quite high, even surpassing the prices of soy at times. Given that the two products can be substitutes for one another, this will inevitably affect the volume of palm oil imports.
The interplay of all these factors has an impact on all RSPO members, even as the impact could vary as companies have different levels of risk perceptions and some can bear more volatility than others. All of these companies have to adapt to evolving regulations. Yet one thing is clear: the sustainable palm oil supply chain in China is resilient and the broader agenda of sustainability is a long-term trend here. Companies see that it presents more opportunities than challenges. In our conversations with Chinese companies, the signal they have sent is a strong one – that they recognise that prioritising sustainable development is essential in the long run. They know that the earlier they are prepared, the greater their chances of seizing new opportunities.
What has driven companies to pursue more stringent IP-level certifications? Why are we seeing some strong cases of collaboration among industry players in the palm oil supply chain emerge in recent years?
RSPO currently has 460 member companies, and honestly speaking, the majority – around 300 members – are small and medium-sized enterprise in the supply chain that are either supplying raw materials to global multinational brands or downstream distributors. That is a high proportion.
Cases like Yili’s have only emerged in the past year. From my engagement with Yili, the company paid attention to the issue of sustainable palm oil from early on; they began participating in RSPO China forums and CSPOA activities as early as 2019, and officially joined RSPO as a member at the end of 2021.
Hence, the internal processes and pace of progress can vary from company to company. But an evident driving force behind this development is the mainstreaming of ESG standards and the adoption of sustainability strategies globally. The three major stock exchanges in China (Shanghai, Beijing, Shenzhen) and the Ministry of Finance now have stricter requirements for ESG reporting and sustainability-related disclosures, and this has an important impact. More Chinese companies now want to position themselves as sustainability leaders within their industries and they are developing sustainable supply chain and procurement practices and strategies, to meet the expectations and concerns of existing and potential investors.
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Some might ask: why hasn’t there been such a policy shift? Although China is the world’s second-largest importer and consumer of palm oil, palm oil is still not considered as strategically important as soybeans, when viewed in the context of China’s broader economic development agenda.
Based on my observations, at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), held in Glasglow in 2021, China also sent a strong and positive signal to companies. At the climate summit, Chinese President Xi Jinping, together with other world leaders, signed the Glasgow Leaders’ Declaration on Forests and Land Use, indicating China’s commitment to global climate governance and its stance against deforestation and land degradation.
In the past year or two, we have seen forest protection increasingly feature in high-level government discussions and policy documents, as well as in climate dialogues between China and countries like the US, the EU, and Brazil. So I believe policy signals play an important role, as they can influence business decisions.
What other policy signals or changes does RSPO hope to see?
China has yet to introduce regulations that target palm oil sustainability that are similar to the EU Deforestation Regulation (EUDR). Compared to mature markets like Europe and the US where over 90 per cent of total palm oil imports are certified sustainable, China is still an emerging market. Promoting policy development and seeing these policies effectively implemented requires a significant amount of time.
Building on the momentum since the Glasgow Leaders’ Declaration, RSPO is now actively involved in the Chinese government’s engagement on transnational green value chain initiatives. As early as 2016, China’s Ministry of Ecology and Environment developed a strategic framework for green value chains and RSPO has been providing feedback. We hope to fully leverage our role as an international standard-setter and certification body for sustainable palm oil, and draw on our experience with commodity markets in China, to support the formulation of such strategic policies. But I would like to emphasise that we have yet to see the roll-out of policies highly targeted at raising the sustainability requirements of palm oil thus far.
In my view, the risk drivers for companies in the Chinese market differ somewhat from those in Europe and the US. In Western markets, the main drivers for risk mitigation are closely tied to brand reputation, with more bottom-up pressure coming from consumers and NGOs. In contrast, Chinese companies tend to be more sensitive to top-down policy signals. Without clear and proactive policy guidance, the common feedback we receive from companies is that they do not see any push to take action. This remains one of the main challenges for RSPO in increasing the market share of certified sustainable palm oil in China.
Some might ask: why hasn’t there been such a policy shift? Although China is the world’s second-largest importer and consumer of palm oil, as it imports between five and seven million tonnes annually, palm oil is still not considered as strategically important as soybeans, when viewed in the context of China’s broader economic development agenda. RSPO has struggled to identify a government counterpart to work with to advance the topics we care about, which in China’s context, is extremely critical. To make progress, I believe it is important to first ensure there is a dedicated department working on this.
Participants at the RSPO China Forum will be discussing how to bridge palm oil supply and demand. As a major consumer of palm oil, how can China establish a closer relationship with palm oil-producing countries? Can it play a bigger role?
This year, we have invited producers from Malaysia, Indonesia and Thailand to engage in dialogue with RSPO members in China, and this is the first time we are having this discussion. We believe that proactive collaboration is key to building a sustainable palm oil supply chain. For example, the recent shipment of IP-level certified palm oil received by Yili was supplied by Yihai Kerry, and the source is one of its factories in Malaysia.
We also increasingly believe that including sustainable palm oil or sustainable trade principles in bilateral trade agreements can effectively promote cooperation between countries and drive the development of sustainable palm oil. In 2022, for example, China’s Ministry of Commerce and its Indonesian counterparts advanced sustainable palm oil trade during a bilateral trade promotion event. CFNA also has signed a memorandum of understanding (MOU) with the Malaysian Palm Oil Council (MPOC) to enhance palm oil sustainability and supply chain stability.
In markets like Indonesia, palm oil has traditionally been viewed as a key contributor to domestic production, but in recent years, sustainable palm oil development has been considered and incorporated into bilateral trade promotion efforts. This is progress that RSPO welcomes.
Instances of China participating and investing directly in overseas palm oil production, however, are less common. Nonetheless, whether it is in agricultural expansion, energy development or Belt and Road projects, the incorporation of sustainable development principles into investment projects in Southeast Asia, Africa or Latin America will be critical to enhancing China’s image as a supporter of sustainable trade.
What else can be expected from the China forum?
We will be expanding it into a full-day forum. We have also invited speakers to share on how sustainable trade principles can be integrated into bilateral trade agreements.
Companies are now making commitments to sustainable palm oil procurement and some have set targets, given the need to comply with requirements for sustainability and traceability, which has been less emphasised before. The forum will hence focus on capacity building, and we will introduce RSPO member companies to other innovation supply chain management tools and solutions.
How have the US-China trade war and EU-driven policies affected Chinese firms in the palm oil supply chain?
Palm oil-related regulatory requirements from the EU have a more extensive impact. The EUDR will be enforceable and binding from 30 December 2025 and the Corporate Sustainability Reporting Directive (CSRD) will also introduce supply chain compliance obligations for EU-listed companies. As regulatory and market requirements grow increasingly stringent, they will influence Chinese suppliers’ participation in the global supply chain transformation. Companies will need to continuously strengthen their due diligence and transparency practices.
Some leading companies in China might not be palm oil suppliers or do not have a need to export to European or American markets, but a key consideration would be to maintain their position as industry leaders in the domestic market or strive to rank among the top companies globally. In order to benchmark themselves against international peers, these companies often develop corresponding policies. So we will see peer pressure coming into play.
What are RSPO China’s goals or outlook for the future?
Our overall strategy remains largely consistent, but with RSPO-certified sustainable palm oil accounting for just 8.7 per cent of total palm oil imports in China, there is still a significant gap to close. We aim to steadily increase that percentage. Consumer awareness of sustainable palm oil in China is also not yet mature, so we will continue to promote education and help drive broader market transformation.
In addition, we will keep highlighting exemplary cases. When leading examples like Yili emerge in various sectors, they help normalise sustainable palm oil development across industries. Sustainable procurement must become a standard practice for companies. We also need to attract more key players with high palm oil consumption to work with us. RSPO will continue deepening its collaboration with key partners and, where appropriate, with official bodies, to enhance industry best practices. Last year’s RSPO Roundtable in Bangkok saw 13 to 14 representatives from Chinese member companies participating – the highest number of Chinese participants to date. Moving forward, RSPO will continue to promote bilateral trade engagement between China and palm oil-producing countries. We hope to strengthen China’s leadership role in the development of sustainable palm oil, showcase policy progress, and contribute to global sustainable palm oil efforts. China can – and should – play such a role.
This interview was conducted in Mandarin and translated to English. It has been edited for clarity and brevity.
The 9th RSPO China Forum will be held on 9 July 2025. Eco-Business will be reporting from Guilin, China. Track our coverage here.
