MALAYSIAN EXPERIENCE IN REGULATING THE OILS & FATS MARKET

The limit content of glycidyl esters & 3-MCPD in food products

RUSLAN ABDULLAHMALAYSIAN PALM OIL COUNCIL

2

MAJOR TRADE FLOWS OF PALM OIL

US

INDONESIA AND MALAYSIA

EU

INDIA

CHINA

2018 : 230 million tonnes (Oils & Fats)

41,000,000 MT

19,500,000 MT

2,728,000 MT

1,600,000 MTColombia

Thailand

Malaysia

Indonesia

Other Countries

7,212,000 MT

5.85

13-15

MAJOR PALM OIL PRODUCERS (2018)

2.23 mil MT (26%)

1.59 mil MT (30%)

1.06 mil MT (35%)

0.85 mil MT (35%)

0.63 mil MT (54%)

0.60 mil MT (94%)0.49 mil MT (83%)

0.48 mil MT (32%)

0.43 mil MT (47%)

0.43 mil MT (57%)

Source: Oil World & MPOB

MAJOR MALAYSIAN PALM OIL IMPORTERS(2018)

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PALM OIL – VICTIM OF ITS OWN SUCCESS

Source: Oil World

Production1958 - 1962 1996 - 2000 2009 2018

RankOrder

Million Tonnes

RankOrder

Million Tonnes

RankOrder

Million Tonnes

Rank Order

Million Tonnes

Total 29.16 103.45 163.94 230.04Butter 1 4.21 7 5.75 7 7.12 7 8.27 Tallow 2 3.39 5 7.65 5 8.43 5 9.80

Soyabean 3 3.2 1 22.84 2

35.81 2 55.87

Lard 4 3.19 6 6.21 6

7.77 6 8.84 Groundnut 5 2.65 8 4.62 10 4.12 9 4.10 Cottoseed 6 2.26 9 4.0 8 4.69 8 4.56 Sunflower 7 1.9 4 9.14 4 12.97 4 19.10 Coconut 8 1.85 10 3.1 11 3.22 11 2.85 Olive 9 1.3 11 2.42 12 2.92 10 3.46 Palm 10 1.26 2 17.93 1 45.06 1 72.04 Rapeseed 11 1.13 3 12.56 3 21.34 3 25.56 Linseed 12 0.92 12 0.73 16 0.58 12 0.72

2018 : 230 million tonnes (Oils & Fats)

2050 ForecastOils & Fats Production: 600 million tonnesPalm Oil Production: 180 million tonnes

Issues:Reduced vs increased market shareMonetary implication

GLOBAL DEMAND FOR PALM OIL

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OIL PALM – TREE OF A MILLION USES

MAJOR CHALLENGES 1. Sustainability Issues

Certified Sustainable Palm Oil (CSPO) and Palm Kernel Oil (CSPKO) are produced by growers that have been independently audited and comply with the globally agreed environmental standards.

Issues related to Sustainability are:

1. Good Agricultural Practices (GAP)2. Deforestation3. High Conservation Value & CO2 Emission4. Biodiversity & Conservation

Cover Crops for Soil & Moisture ConservationExcellent Plantation Management Practices

Best Mill Practices Balanced Age Profile

Integrated Pest Management

Zero Burning Technique POME Treatment

GOOD AGRICULTURAL PRACTICES (GAP)GAP are practices that addresses environmental, economic and social sustainability for on-farm processes, and result in safe and quality food and non-food agricultural products (FAO)

Riparian area

Beneficial Plant

DEFORESTATIONWORLD’S AGRICULTURAL LAND - What’s it being used for?

Livestock industry uses the most land and is the main driver for global deforestation

4.91 billion Ha

Source: FAO (2011), Oil World, MPOB (2012)

Addressing Deforestation in Malaysia1. Oil palm plantation to be capped at 6.5 million ha (2020)2. NO new planting on virgin forest 3. NO new planting on with high conservation value (HCV) land 4. NO planting on area with slope of more than 25o

5. NO planting on peat

PRINCIPLES & CRITERIA OF CSPO & CSPKO

ROUNDTABLE SUSTAINABLE PALM OIL MALAYSIAN SUSTAINABLE PALM OILCommitment to transparency Management commitment and responsibilityCompliance with applicable laws and regulations

Transparency

Commitment to long-term economic and financial liability

Compliance to legal requirements

Use of appropriate best practices by growers and millers

Social responsibility, health, safety and employment conditions

Environmental responsibility and conservation of natural resources and biodiversity

Environment, natural resources, biodiversity and ecosystem services

Responsible consideration of employees, and of individuals and communities affected by growers and mills

Best practices

Responsible development of new plantings Development of new plantingsCommitment to continuous improvement in key areas of activity

2.8 million ha14.5 million ha

CUMULATIVE CO2 EMISSIONS (1850-2002)How does oil palm growing countries compare with others?

Oil Palm Growing Region

24% by Developing Countries (Population: 5.0 Billion)Russian Federation, China, India, Ukraine, South Africa, Mexico, Brazil, South Korea, Iran, Indonesia, Saudi Arabia, Argentina, Turkey, Pakistan, Malaysia

76% by Developed Countries (Population: 1.3 Billion)Australia, United States, EU 25, Japan, Canada

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MAJOR CHALLENGES2. Anti-Palm Oil Campaigns

Science-Based- Health & Nutrition - Accusation easily

challenged and dispelled

Perception-Based- Environment- Biodiversity loss- Accusation not easy to dispel- Sentiment outweighs facts

<1990s>2000s

Their Focus/Objective: To Discredit Palm Oil

AMSTERDAM DECLARATION (7 December 2015)Signed by: Denmark, France, Germany, The Netherlands, Norway, United Kingdom.

q Support for a fully sustainable palm oil supply chain by 2020 and

q Support for an end to illegal deforestation by 2020

To BAN/PHASE OUT Palm Oil

into EU

Amsterdam Declaration(Dec 2015)

EU Resolution(April 2017)

RED II Amendments(June 2018)

EC Delegated Regulation (Act)(Feb 2019)

Rang Tan Video

Greenpeace

Iceland

NGOs

No Palm Oil Label

EFSA (3-MCPD)

Anti-Palm Oil CampaignsVery focused: Single Objective

MAJOR CHALLENGES3. Food Contaminants

MPOB Code of Practices on Quality, Food Safety and Sustainability

....to ensure that food produced are safe for human consumption

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BASIC INFORMATION ON 3-MCPDE AND GE

3-MCPD Possibly carcinogenic to humans1

3-monochloropropanediol Nephrotoxic (EFSA Report 201

3-MCPDE Nephrotoxic (EFSA Report 20163-monochloropropanediol ester

GE Probably carcinogenic to humans1

Glycidol ester1 Classification by International Agency for Research on Cancer** Probably (Group 2A) - Limited evidence of carcinogenicity in humans and sufficient evidence of carcinogenicity in experimental animals** Possibly (Group 2B) - Limited evidence of carcinogenicity in humans and less than sufficient evidence of carcinogenicity in experimental animals

Factors Contributing to 3-MCPDE & GE in Palm Oil

3-MCPDE

GE

q Formation of 3-MCPDE in refined of palm oil is due to:

Presence of chloride (as precursor) in crude palm oil (CPO)

Catalyzed by acid degumming, acid activated bleaching clay and high deodorization temperature of more than 230oC

3-MCPDE is difficult to remove after its formation

q GE is developed from diacylglycerols (DAG) at refining temperature between 260 and 270oC

q GE is correlated with DAG content

q Remove via post-refining at lower temperature (230oC)

q Ensure CPO has low acidity (less than 4%) and DAG (~3%)

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STATEMENTS ON 3-MCPDE AND GEDecember 2007Raise issue on 3-MCPD esters due to toxicological concern

March 2008Scientific Panel on Contaminants in the Food Chain (CONTAM)

February 2009Scientific Panel on Contaminants in the Food Chain (CONTAM)

February 20093-MCPD esters are found in all refined vegetable oils and thermally processed food

September 2013Food category – Animal and vegetable fats and oils – and its sub-groups showed average 3-MCPD esters of 1020 μg kg-1 (960 to 1090 μg kg-1)

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Establishment of Maximum Limits for GE in EU

q The European Commission published Regulation (EU) 2018/290 on 26 February 2018, amending Regulation (EC) No 1881/2006 concerning maximum levels of glycidol esters (GE) in food

q The Regulation entered into force on 19 March 2018 and establishes the maximum limits of GE in vegetable oils and fats, infant formula, follow-on formula and foods for special medical purposes intended for infants and young children

Current Status of 3-MCPDE in Refined Oils in EU

Voting by Standing Committee: April 2019 Implementation time: 18 months grace period

Entry into force: 1 Jan. 2021

EU proposed 2 maximum limits1.25 ppm for soft oils (coconut, maize, rapeseed, sunflower, soybean and palm kernel oil and mixture of oils and fats with oils and fats only from this category)2.50 ppm for other vegetable oils (palm oil) and fish oil and mixture of oils and fats only from this category

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Proposed level for GE: Commission Regulation (EU) 2018/290 of 26 February 2018

Item Foodstuffs Maximum level of GE

[1] Vegetable oils and fats placed on the market for the final consumer or for use as an ingredient in food with the exception of the foods referred to item [2]

1.0 ppm

[2] Vegetable oils and fats destined for the production of baby food and processed cereal based food for infants and young children 0.5 ppm

[3] Infant formula, follow-on formula and foods for special medical purposes intended for infants and young children (powder) 0.075 ppm until 30 June 2019

0.050 ppm as from 1 July 2019

[4] Infant formula, follow-on formula and foods for special medical purposes intended for infants and young children (liquid) 0.010 ppm until 30 June 2019

0.006 ppm as from 1 July 2019

Timeline for EU Implementation of 3-MCPDE Limits

29 MARCH2019

Discussion at the

Standing Committee

APRIL 2019Public

Consultation(4 weeks)

27 JUNE2019

Vote in the Standing

Committee

JULY TO SEPTEMBER

2019Public

Comment

OCTOBER2019

Publication of Regulation

1JANUARY

2021Entry into

Force

The way forward to address 3-MCPDE and GE in Refined Palm Oil

• Quality and food safety are our responsibility• Ensure palm oil products produced in Malaysia

contain minimum levels of 3-MCPDE and GE to comply with the importing countries

• Level of 3-MCPD esters and glycidol esters will be proposed based on the industrial trials using the best technology option by Q4 2019

• Establish Code of Practice (COP) for mitigation of 3-MCPD esters and glycidol esters in refined oils in-line with CODEX.

• Five basic operations in palm oil milling process: sterilisation, threshing (stripping), digestion, oil extraction and kernel recovery

• Sterilisation technologies include horizontal steriliser with cages (conventional), continuous steriliser, vertical steriliser and tilting steriliser (without cages)

• Potential oil losses occur from three sources of milling process namely, sterilisation (condensate), threshing (empty fruit bunch) and pressing station (pressed mesocarp fibre)

• Mixing of oil recovered from these sources with CPO is prohibited due to high free fatty acid (FFA), phosphorous content and chloride content

• High levels of FFA, phosphorous and chloride content are the main precursors which trigger formation of 3-MCPDE and GE in refined palm oil and give implication to food safety issue

Horizontal steriliser

Continuous steriliser

Vertical steriliser

Tilting steriliser

Crude palm oil (CPO)

Palm kernel oil (PKO)

Palm Oil Milling Process Flowtake a step backward

13 mills and 7 refineries have started commission their plants

2 mills are in the process of procurement

Research Fund from Federal Government

The Malaysian Government (2017) had allocated research fund to assist the industry to reduce the formation of 3- MCPD esters and glycidol esters in refined palm oil

Industrial trials will be carried out incollaboration with seleceted palm oil mills, refineries and technology providers

Plantations

Mills

Refineries

Reduce chlorine in FFB by changing fertilizers used

Reduce FFA and DAG in PO by ensuringmilling within 48 hours

Wash FFB to remove chlorine precursor

FFB sterilization with steam without chlorine

Wash fresh CPO with slightly alkaline water

Use natural bleaching earth

Reduce deodorisation temperature to below 230°C at vacuum pressure of 1 mbar

General Mitigation ApproachesIn general :

3-MCPDE ~ 3 - 6 ppmGE ~ 7 - 8 ppm

3-MCPDE and GE:Propose to reduce to the

level accepted by all parties

3-MCPD GE

Mitigation Approach to Minimise 3-MCPDE & GE

3-MCPDE in RBDPO based on sample size surveyed

17%

40%5%

17%

11%

5%

4%1% 3-MCPDE (ppm)

0.00 - 0.99

1.00 - 1.99

2.00 - 2.49

2.50 - 2.99

3.00 - 3.99

4.00 - 4.99

5.00 - 5.99

6.00 - 6.99

Total Sample: 141 No. of companies: 42

38% > 2.50 ppm62% < 2.50 ppm

40% of the companies can produce RBDPO with 1.0 – 2.0 ppm3-MCPDE

17% of the companies can produce < 1.00 ppm 3-MCPDE in RBDPO

qCODEX Alimentarius Commission (CAC) 40 on 17 to 22 July 2017 has approved the new work on Code of Practice (COP) for the reduction of 3-MCPDE and GE in refined oils and products made from refined oils especially infant formula

qEstablishment of the Electronic Working Group (eWG) is chaired by USA and co-chaired by EU and Malaysia

qCCCF 12 (12 to 16 Mar 2018) adopted the COP at Step 5 and approved by CAC 41(2 to 6 Jul 2018) in Rome, Italy.

qCCCF 13 (29 Apr to 3 May) in Yogyakarta adopted the COP at Step 8.q Final adoption by the CAC 43 is expected in 2020 or CAC42 (2019).

3-MCPDE and GE: Engagement with CODEX

Update on 3-MCPDE from CPOPC Meeting

q Common Position of Malaysia and Indonesia over the EU Proposal on the Level of 3-MCPDE

q Common Position on ‘Draft Code of Practice (COP) for the Reduction of 3-MCPDE and GE in Refined Oils and Products Made with Refined Oils, Especially Infant Formula’ at Step 5 of Codex Alimentarius

q Further Research Studies: Identifying and Promoting the Most Cost Efficient Technologies for Mitigation for the Palm Oil Industry

q Proposed New Grade for CPO Trade

CONCLUSION

q Different sterilisation systems applied in palm oil mills produce different quality of CPO as well as volume of oil produced in the condensate

qMixing of oil recovered from steriliser condensate, empty fruit bunch and pressed fibre into bulk CPO should be avoided as it will give implication on food safety due to 3-MCPD and GE formation

q For milling process, MPOB trials have proven that washing the CPO (with mild alkaline water) and using non-chlorinated water during sterilisation could remove the chlorine precursors

qMeanwhile for the end of pipeline, the solution would be in the refinery by using lower temperature and pressure during the deodorization process

qMPOB and the industry players have hand-in-hand worked together in sustaining the wellbeing of the industry through extensive research and development.

.

Continue with advocacy work and engagement with stakeholders

Establishment of COP and level for 3-MCPDE & GE in refined palm oil and its products

Mandate for higher quality CPO – low FFA and low chlorine content in CPO

Level of 3-MCPDE will be proposed based on the Commercial Trials using the best technology option.

Implementation for specific level of 3-MCPDE is targeted to be around 2019 depending on global scenario.

Need further studies on human health impact of 3-MCPDE

3

2

6

7

4

5

Safety cannot be compromised.1

WAY FORWARD

Continue engagement with stakeholders

Palm Oil Mills to be categorized as food processing facilities by MOH

Stricter regulation on New Licensing Conditions

MOVING FORWARD

MOVING FORWARD

No. Parameters Standard CPO Premium CPO Industrial CPO

1 FFA (max) 5% max 3% max 20% max

2 Moisture & Impurities 0.25% max 0.25% max 0.5% max

3 DOBI 2.31 min 2.8 min -

4 Phosphorus (P) 10.0 ppm max 10.0 ppm max -

5 Iron (Fe) 5.0 ppm max 5.0 ppm max -

6 Chlorine (Cl) 2.0 ppm max 2.0 ppm max -

....proposing for a NEW grade of CPO specifications

DOBI : Deterioration of bleaching index, dependent of fruit quality, ripeness & storage

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THANK YOU

ruslan@mpoc.org.my

Outcomes from Industrial Trials A

* CPO washing at Commercial Mill** Refining, post-refining at fractionation of washed CPO at Commercial Refinery

CPO washing Total chlorine content

With 1.60 ± 0.08

Without 12.09 ± 0.27

86.8% reduction in total chlorinecontent after CPO washing

74.5% reduction of GE upon refining of washed CPO

Outcomes from Industrial Trials B

* CPO washing at Commercial Mill** RBDPO from washed and unwashed CPO using lab-scale glass refining

6.92

1.30

2.61

0.85

81.2% reduction inafter total chlorine contentCPO washing

67.4% reduction in 3-MCPDE upon refining ofwashed CPO

q Presence of DAG and chlorine in CPO, bleaching clay and steam

q Acid degumming and acid activated clay

q High deodorisation temperature (> 230oC)

q GE developed correlates with DAG content, however, DAG of 3% will have low GE Post refining at 230oC will reduce GE content in refined oil

Pilot Trials by MPOB: Factors that contribute to 3-MCPDE formation

Commercial runs have been conducted at the mill and refinery. The results showed that washed CPO enables to produce refined oil containing low 3-MCPDE and GE after post-refining