Can oil palm explain Malaysia’s decreasing forest loss?

Last year, the loss of tropical forest worldwide continued with its upward momentum. But Malaysia once again bucked the trend as it cut down less than it did the previous year, the fourth year in a row it has seen reductions. What explains this positive news?

Yao-Hua Law
May 5, 2021
Can oil palm explain Malaysia’s decreasing forest loss?
A Rainbow forms over the Ulu Baram rainforest in the Miri interior, eastern Malaysian Borneo state of Sarawak in 2007. Photo: AFP

Last year, the world lost 12% more tropical forest than it did in 2019, according to satellite census by forest monitoring platform Global Forest Watch. Malaysia bucked the global trend: it lost less. 

In fact, Malaysia has trimmed its primary forest losses four years in a row. Losses fell from about 185,000 hectares in 2016 to nearly 73,000 hectares in 2020 (Figure 1)

At the same time, there is a slow down in the expansion of the sector most frequently linked to deforestation – oil palm. Oil palm area in Malaysia contracted in 2020 – the first drop in 44 years.

Could this explain Malaysia’s recent downtrend in primary forest losses? And can we expect forest loss to drop further?

In celebrating Malaysia’s shrinking forest losses, Global Forest Watch called Malaysia “a bright spot of hope” for forests.

Having identified commercial agriculture as the cause of 94% of tree cover loss in Malaysia, it suggests that the decreasing losses are linked to oil palm.

For one, it names slower oil palm expansion and cites the Malaysian government’s self–imposed cap of 6.5 million hectares of oil palm planted area nationwide for 2019–2023

Stronger commitments

Global Forest Watch also credits the lower forest losses to increased commitment among palm oil refineries to reject palm oil harvested from deforested or peat lands. This is in line with the so-called ‘No Deforestation, No Peat, No Exploitation’ (NDPE) policies.

Global Forest Watch names one example: international certification body Roundtable on Sustainable Palm Oil’s (RSPO) 2018 tightening of sustainable certification requirements “to include a ban on any deforestation or peatland clearing”.

Not RSPO, but MSPO

The Malaysian Palm Oil Board (MPOB) agrees with the link to oil palm expansion but downplays RSPO’s role in the country’s recent shrinking forest loss.

MPOB tells Macaranga in a written reply that because forest losses started shrinking in 2016, “no, it is not really due to the NDPE policy (sic) of RSPO which was introduced in 2018.”

Rather, MPOB says the main factor is the implementation of the country’s own Malaysian Sustainable Palm Oil Certification Scheme (MSPO) that from 2015, has aimed to “reduce social and environmental impact”.

Furthermore, the government announced in February 2017 that MSPO would be made mandatory (it was enforced in January 2020). Authorities can revoke the licenses of non-certified growers.

The latest figures show that there are more MSPO certified growers in Malaysia than RSPO, at 5.07 million hectares and 1.2 million hectares, respectively (some growers have both certifications).

There is some evidence that the advent of certification has tempered oil palm expansion in Malaysia.

Beginning in 2015, the growth of oil palm plantations shrank or stopped (Figure2). Sharp drops happened in Sarawak in 2016 and in Peninsular Malaysia in 2020.

In fact, total oil palm area receded for the first time in 45 years, since 1976 (Figure 3).

MPOB said the “marginal decline” in 2020 happened because more areas were converted out of oil palm estates into other developments than were converted into oil palm. They do not expect a significant change in 2021.

Oil palm not whole picture

If oil palm expansion was the main driver of deforestation, it is expected that as oil palm area increased, forest area would decrease.

While correlations between two factors do not prove that one causes the other, such an approach is a common first step to guide analyses.

Among the top five oil palm growing states in Malaysia, such correlations were most obvious in Sarawak – where we see less oil palm expansion, we also see less forest loss (i.e., in Figure 4, when the red line (oil palm) goes down, the green line (forest) goes up).

But such correlations were absent in Perak, Johor, Pahang and Sabah.

In Perak, Johor and Sabah, oil palm expansion did not appear to affect primary forest changes. And over in Pahang, even as oil palm expanded, forest loss shrank. 

These numbers suggest that in recent years, oil palm in Johor, Pahang, and Sabah has not been expanding into primary forests.

In short, slower oil palm expansion has likely contributed to reducing primary forest losses in only some instances in Malaysia.

Other explanations for the downtrend in primary forest loss are needed, particularly in Pahang.

The Forestry Department of Pahang did not respond to questions for this story.

What about rubber?

Rubber is the second largest plantation sector in Malaysia at 1.1 million hectares in 2020. Could changes in rubber area possibly explain the recent downtrend in primary forest losses?

Apparently not. There is no noticeable correlation between changes in area planted with rubber and primary forest since 2013 (Figure 5).

Macaranga could not get state-level rubber area data in Peninsular Malaysia.

Forest loss still ongoing

Conserving forests in a developing economy like Malaysia is tough. Global Forest Watch satellite census shows that for 12 of the 19 years since 2002, Malaysia has lost primary forests more than 4 times the area of Penang Island.

It is true that this figure last year was 2.5 times that of Penang Island, so the overall decrease in forest losses is encouraging for conservation. 

Most states have returned to the lower forest loss levels of the early 2000s, except for Kelantan and Pahang (Figure 6).

Moving forward, will Malaysia continue to lose less and less primary forest and remain a bright spot of hope for tropical forests?

The Forestry Department of Peninsular Malaysia did not reply to our questions for this story.

But in previous interviews with Macaranga for our Forest Files stories, forestry officers suggested that deforestation will continue.

Balu Perumal, Head of Conservation at the Malaysian Nature Society, thinks forests are being “valued more now than it was before, especially in terms of ecosystem services” provided by the forests.

He says policies that promote sustainable use of forests, such as certification schemes and mandated sustainable forestry practices in forest reserves, have been pivotal in reducing forest loss.

The Malaysian Nature Society hopes that forest loss will drop to zero, says Perumal. And coupled with focused efforts to “greening the country” like forest rehabilitation and restoration, he expects forest area to increase.

Critical decade

This is an important decade for forest conservation in Malaysia. 

By 2030, the country must meet its Paris Agreement target of reducing greenhouse gas emission by at least 35% compared to 2005 levels. 

Whether the country hits its target will depend a lot on how it manages its forest.

On 5 January, the federal government launched a five-year programme to plant 100 million trees nationwide by 2025. As of 24 April, the programme has recorded 6.1 million trees planted.

Then the Malaysian Forestry Policy launched on 21 March puts in writing the federal government’s commitment to keep at least 50% of land area under forest and tree cover. 

This was a pledge the government made in 1992 and has been oft-repeated but never stated in national policies until now.

The worsening economic impact of the pandemic could spur state governments to exploit forests for timber and land.

And then there is the RM500 million federal government fund to help state governments develop forest plantations.

 Forest plantations are commercial estates of fast-growing trees (e.g., Acacia mangium and rubber trees) that will be harvested for timber.


Sites for forest plantations are first cleared before being planted with a single tree species. While forestry departments still regard such sites as forest, the initial clearing will increase greenhouse gas emission and count as primary forest loss in satellite census.

Since 2007, at least 200,000 hectares of forest reserves in Peninsular Malaysia had been cleared to make way for forest plantations. 

An injection of RM500 million may accelerate forest clearing.

This story was produced in partnership with the Pulitzer Center’s Rainforest Investigations Network. It was originally published on Malaysian environmental reporting website Macaranga, and republished on the Globe with their permission.

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