Palm Oil Industry

From WikiCorporates
(Redirected from Palm Oil)
Jump to navigation Jump to search

Palm oil is the most used vegetable oil in the world and demand is booming. Consumption has grown rapidly from about 4m metric tons in the 1970s to ~70m tons today. Drivers are population growth, major changes in consumer behaviour, and energy politics. Europe is the 2nd largest purchaser (6,800 tons), after India (9,000 tons), with China 3rd (5,300 tons). ref, 2018, ref

Palm oil is an extremely versatile ingredient, with a smooth creamy texture; it gives crispness and crunch to fried foods; it has excellent cooking properties, a neutral taste and smell, and a long shelf life.
It has a balanced fat composition, with 50% saturated fatty acids, 40% mono unsaturated fatty acids and 10% polyunsaturated fatty acids. Palm oil is considered to be beneficial for cardiac health and lower cholesterol levels.[1]

The ~70m metric tonnes of palm oil exported each year is shipped to more than 70 countries around the world, where it is used in everything from biofuels to chocolate bars. More than 50% of all supermarket items contain palm oil.

Palm oil grows best around the equator, in some of the world's most biodiverse countries. Indonesia is the largest producer, with Malaysia in 2nd place. Together, they produce 85% of the world's production. African and Latin American countries are becoming bigger palm oil players.

The Problem: Deforestation

Demand for palm oil has increased rapidly over the last decade due to dietary changes and its use as biofuel. Production is predicted to double by 2030, and triple by 2050. Deforestation for monocultural palm oil plantations destroys habitats, threatens species extinction, and contributes to greenhouse gas emissions. ref

To meet the growing demand, tropical rainforests and peatlands are being torn down in some of the world's most biodiverse countries, with ever-expanding oil palm plantations taking their place. For eg., an area the size of a football pitch is torn down in Indonesia’s rainforest every 25 seconds. These rainforests are vital for regulating the Earth’s climate - see Deforestation.

Peatlands are being drained and cleared across Indonesia to make way for palm oil plantations. This not only releases millions of tons of carbon into the atmosphere, but it also dries the land, making it susceptible to devastating fires - often caused by palm oil and pulpwood companies burning forest to clear land.
According to Nasa's Earth Observatory, if current rates of deforestation continue, the world’s rainforests will vanish within 100 years, eliminating the majority of plant and animal species on the planet, causing the earth's temperature to increase, disrupting weather patterns, as well as uprooting the communities who live there.


Boycotting is not an option. Palm oil is a very productive crop, and switching to another oil, eg. oil-seed rape or soy beans, just means that far more land would be used to produce vegetable oil. Palm oil is about 9 x more productive per hectare than the next most productive oil, and it requires less fertiliser, fewer pesticides and less energy than either. Sainsburys and Iceland's commitment to going palm-oil free does not help, laudable though it may be, because all other kinds of oils are much harder on the environment.[2] It would be far more useful if both of them would bring their clout to bear, and insist on sustainably sourced palm oil. So why aren't they doing this? Answer: because they think citizens will "respond better" to this tactic. They are treating consumers like children - ping them on social media and let them know you aren't impressed: @Sainsburys, @IcelandFoods.

Algal oil produced through the natural mutation process of algae and standard industrial fermentation is another potential option. But initial trials by Ecover were suspended after vociferous opposition to the method’s reliance on Brazilian sugar and synthetic biology (genetic engineering techniques).[3]

Yeast: Using Metschnikowia pulcherrima, a yeast traditionally used in South Africa's wine industry, researchers at the University of Bath believe they can develop a truly versatile and planet-friendly alternative to palm oil. The yeast can be fed any form of organic feedstock. Development still has a way to go - it costs around $400 more per ton to produce than palm oil. Nevertheless, the scientists think they can have it up and running within 3-4 years.[4] The project page is here.

As vegetable oils go, even Greenpeace accepts that palm oil is the "best solution" - but only when produced responsibly: "It is fundamentally one of the most efficient vegetable oils in terms of land use”.

The Solution

The answer to deforestation is Sustainability. BASF's short video is a good explainer on this.

... and it is often impossible for citizens to tell. The EU Food Information Regulation Dec.2014 only required manufacturers to specify what type of vegetable oil a food product contains - the regulation does not require stating whether it is sustainable or not. The game changer, as always, is whether citizens demand it. ref

Of that, 16% was certified sustainable in 2013, meaning it meets standards around deforestation, lawfulness, transparency and social impact laid out by the Roundtable on Sustainable Palm Oil. However many say these are not sufficient to ensure it is sustainable and deforestation-free.

The market for sustainable palm oil is growing but it still represents only a relatively small fraction of overall palm oil sales. Of the 59m metric tonnes (MT) of palm oil produced in the 2013/14 financial year, 42% was consumed in one of just 3 countries: India (8.3m MT), Indonesia (9.8m MT) and China (6.4m MT). Lagging behind in fourth are the 27 member states of the European Union, which collectively consumed just over 10% (6.2m MT). Yet when it comes to Certified Sustainable Palm Oil (CSPO), the story is very different. The vast majority of cargo ships leaving Indonesia and Malaysia, which produce over 90% of the world’s certified palm oil, are bound for Europe. CSPO sales are particularly strong in the UK, the Netherlands, France and Germany.

Some people believe that palm oil can never be sustainable, but others maintain that with strict regulations and responsibly managed land, production can work together with conserving our environment.

The industry offers a path out of poverty for many people in developing countries such as Indonesia, where more than 28m live below the poverty line. However, many oil palm plantations have been developed without consultation or compensation of the people that live on the land. These communities may not own their land but have managed it for generations, growing food and cash crops, and gathering medicines and building materials from the forests.

Many of the huge corporate buyers driving demand for sustainable palm oil are headquartered in Europe. The three corporations involved in designing the Roundtable for Sustainable Palm Oil - Anglo-Dutch consumer giant Unilever, Swiss retail chain Migros, and the UK arm of Swedish food manufacturer Aarhus (now AKK) – are all European. Even today, 64% of RSPO’s 1,722 non-palm oil producing members come from the region.

Companies are under increasing pressure from many sections of society to reduce their environmental and social impacts. When it comes to palm oil, some businesses have responded to these demands, such as Unilever, which sources 100% of its palm oil sustainably; but others, such as Burger King, refuse to disclose what percentage of the palm oil they use is certified. see infographic

Environmentalists continue to campaign in frustration over the pace of uptake. Certified sustainable plantations only account for only 16% of global palm production. For the remaining 84%, it’s business as usual.

Demand for palm oil has increased rapidly over the past decade due to dietary changes and the fact that it is now also used as biofuel. Global palm oil production is predicted to be double the 2000 level by 2030 and triple by 2050.

The Palm Oil Challenge

Traceable Palm Oil

The Solution: sustainability plus traceability.
How to ensure sustainability? The answer is traceability, through the supply chains. The European Palm Oil Alliance's short "explanimation" video explains it very well: link.

ToDo: Biofuels:

link, link, link, DDG search

The Big Players

They talk the talk, but do they walk the walk?
In 2010, members of the Consumer Goods Forum pledged to clean up global commodity supply chains by 2020.1 But deforestation shows little signs of slowing down – because brands and their suppliers have totally failed to implement their promises. As the world’s largest palm oil trader, Wilmar International bears much of the blame - Wilmar trades palm oil from destructive producers.
Palm Oil companies assessed by SPOTT (link):

Associated Organisations

  • The European Palm Oil Alliance is a business initiative to engage with and educate stakeholders on the full palm oil story. EPOA closely collaborates with national initiatives active in the different European countries, facilitating science based communication and creating a balanced view on the nutritional and sustainability aspects of palm oil. EPOA strongly supports the uptake of 100% sustainable palm oil. Current participants of the European Palm Oil Alliance are:

Cargill Inc, Bunge Loders Croklaan, Indonesian Palm Oil Association, Lipidos Santiga, Malaysian Palm Oil Council, MVO, the Netherlands Oils and Fats Industry, Sime Darby, Unigra, Olenex (an Archer Daniels Midland/Wilmar JV). ref, website


  1. ^ Palm Oil vs Coconut Oil: Similar Yet Different. Nastassia Green, Oilypedia. Accessed Sept.10.2018.
  2. ^ Selfridges is selling Iceland own-brand mince pies – and proud of it. Unusual collaboration between upmarket department store and frozen food specialist is because both have committed to going palm-oil-free. Rebecca Smithers, The Guardian, Oct.15.2018.
  3. ^ Ecover puts algal oil trial on hold as activists target brand. Jim Manson, Natural Products, Jul.01.2014.
  4. ^ Finally! A Viable Palm Oil Alternative That Can Save Orangutans and the Rainforests. Kate Good, One Green Planet, Feb.18.2018.