RSPO Smallholder (ISH) credits
What are RSPO ISH Credits?
RSPO Independent Smallholder (ISH) Credits connect the market directly to independent smallholder groups worldwide. RSPO ISH Credits provide smallholders with the advantage of selling their certified produce at a premium, in reward for their sustainable agricultural practices.
Buyers who wish to contribute to a more sustainable palm oil market can purchase RSPO ISH Credits and actively support smallholders’ inclusion in the sustainable palm oil supply chain.
Tanjung Jabung Regency, Indonesia
RSPO ISH Credits incentivised smallholders
to protect and restore their river ecosystem,
which cleaned up the water and attracted fish to return in abundance.
How DO RSPO ish credits benefit smallholders?
Who are independent smallholders?
Independent smallholders are small-scale farmers with less than 50 hectares of oil palm who do not have a direct relationship with any particular company in the palm oil industry.
How do RSPO ISH Credits work?
To financially reward these smallholders for their sustainable agricultural practices, RSPO ISH Credits offers RSPO Certified smallholders the unique trading ability to sell their Fresh Fruit Bunches (FFB) to an uncertified mill and convert their FFB volume into credits.
One tonne of the certified volume equals one credit, which can then be sold to buyers registered in prisma by RSPO. The smallholder group collects a premium price – on top of the sale of their physical supply – through the virtual trade of each credit.
HOW DO I PURCHASE RSPO ISH CREDITS?
Book and Claim
Book and Claim allows businesses to offset the use of conventional palm or palm kernel oil and its fractions and derivatives through the purchase of an equivalent number of RSPO Credits.
Consumer brands and Retailers can purchase RSPO Credits directly from Independent Smallholder groups, directly incentivising them without the involvement of the entire supply chain.
As a buyer, you can conveniently search, bid and buy RSPO Credits in the prisma by RSPO marketplace.
Find out more about the Book and Claim Supply Chain model here.
What are the benefits?
Groups of independent smallholders sometimes do not have access to a certified mill to sell their certified sustainable Fresh Fruit Bunches (FFBs) or the premiums may not be competitive enough.
The Book and Claim model allows for such independent farmer groups to access markets for certified products and benefit from the premiums. The smallholders continue to sell their FFBs to the mill at the market price as conventional, and they can sell Certified Sustainable Palm Oil (CSPO) and Sustainable Palm Kernel (CSPKO) Credits based on their FFB production multiplied by the oil extraction ratio. These credits are then sold virtually at a market price that is paid to them directly. Unlike physical supply chains, buyers of RSPO Credits support the smallholders that have certified their plantations as sustainable by paying a premium directly to the certified smallholders.
Independent smallholders depend on these credits to support their livelihood, helping them pay for audit costs, certification maintenance and best practices training.
RSPO ISH Credits offers a cost-effective model for sustainable sourcing that is scalable because it does not require decision-making on sustainable sourcing throughout the entire supply chain apart from the last buyer. As a seller of RSPO Credits, the cost of producing palm oil sustainably by complying with the standards remains the same.
RSPO Credit prices are determined by the market and are paid directly to the seller, which helps smallholders recover their investments in sustainable production. Traded between producers and end users, ISH Credits save on costs for supply chain certification.
Where the palm-based ingredient in a product may not come from a sustainable source, purchasing an equivalent amount of credits will offset the portion of uncertified palm oil used. Additionally, the trade of RSPO Credits is transparent as the seller and buyer are virtually connected, thus providing assurance of the sustainable origins of the Credits.
