Over the last 50 years, global palm oil consumption has increased exponentially.[i] Palm oil is estimated to be in 50% of all consumer goods.[ii] This includes food, cosmetics, toiletries, and cleaning products. 85% of global palm oil now comes from Indonesia and Malaysia.[iii]
There has been a recent surge in demand for palm oil because its rivals, soy-oil and sun-oil, have increased in price due to production concerns in the US and supply disruptions in the Black Sea.[iv] Reuters report that this should increase Malaysian palm oil production.[v] India is the world’s biggest buyer of edible oils. In July, India imported 1.09 million metric tons of palm oil, the most they have imported in seven months.[vi] Palm oil is becoming more lucrative- the crude palm oil cost currently being offered to India for September is $910 a tonne, compared with $1,050 for crude soy-oil and $1,010 for crude sun-oil.[vii]
Palm oil is a major cause of deforestation, leading to biodiversity loss and the release of carbon dioxide into the atmosphere. Every year, around 5 million hectares of forest are lost to deforestation.[viii] We have previously discussed the impacts of leather and beef production on deforestation. Palm oil and soybean production account for 18% of global deforestation.[ix] Conserving and restoring the world’s forests could reduce global emissions by 18% by 2030.
In recent years, news stories and reports from organisations such as Amnesty International have linked palm oil production to child labour and other forms of exploitation. As a result, consumers have a negative perception of palm oil. A recent study found that Swiss consumers have a negative perception of palm oil. Specifically, they have a negative perception of the sustainability of palm oil. The problem is that this concern does not translate into sustainability action because consumers are not aware of which products contain palm oil.[x] Another study on the impact of green marketing on consumer purchasing of palm oil products found similar results. Most consumers do not read the product descriptions on packaging[xi], so they would not be aware if a product contains palm oil or not.
However, WWF says that boycotting palm oil is not the answer. 35% of the world’s vegetable oil comes from palm oil, but this is grown on only 10% of the global land used to grow vegetable oil crops.[xii] This means that palm oil is extremely productive and efficient. It would take between 4-10 times more land to achieve the same amount of vegetable oil from soybeans or coconuts.[xiii] This means that boycotting palm oil could actually increase deforestation and transfer the problem of deforestation to other parts of the world where alternative kinds of oilseed are grown.
Sustainable palm oil is certified by the Roundtable on Sustainable Palm Oil (RSPO). There are four RPSO certification models[xiv]:
1. Identity Preserved- This is where the palm oil has a single identifiable certified source that is separated from conventional palm oil throughout the supply chain.
2. Segregated- This is where volumes of palm oil from different sources are certified and separated from conventional palm oil.
3. Mass Balance- Ordinary palm oil is mixed with certified palm oil throughout the supply chain.
4. Credits/Book & Claim- This model encourages Certified Sustainable Palm Oil to be produced, but it does not physically certify palm oil. RSPO Credits and Independent Smallholder Credits are bought from RSPO Certified growers, crushers, and independent smallholders, by manufacturers and retailers.
However, the study on Swiss consumers’ perception of palm oil also found that there was a low level of recognition of the RSPO label, which could hinder consumers from buying products containing Certified Sustainable Palm Oil.[xv] Today, 20% of global palm oil production is RSPO certified.[xvi] 99% of the palm oil in UK retail is either Segregated or Mass Balance palm oil.[xvii] 3Keel’s report on palm oil in the UK retail sector has found that in 2022, 83% of 108,713 tonnes of reported palm oil in food categories were either RSPO Segregated or Identity Preserved. This was an increase of 4% from 2021.[xviii] However, 3Keel found that whilst Segregated volumes of palm oil are increasing in food, there is a certification gap in non-food products. 85% of the palm oil in non-food categories use the Mass Balance and Credits certification models.[xix]
Figure 2: RSPO segregated palm oil in UK retail
Source: 3Keel
Policy, reducing palm oil usage, regional approaches, and trader engagement are other approaches to improving the sustainability of palm oil, each with its own challenges.
Figure 3: The alternatives to sustainable palm oil certification
Source: 3Keel
Palm oil waste (palm oil clinker, palm oil fibre, palm kernel shells, and palm oil fuel ash) can be used in asphalt pavement and concrete.[xx] Crude palm oil and its by-products can be used to create more sustainable and cost-effective concrete. These products are more renewable, environmentally friendly, and safer to handle than petroleum-based binders.[xxi] Although, more research needs to be done in this area, and there are some barriers, such as the need for large-scale production equipment, a lack of design standards and guidelines, and inefficient raw material processing conversion facilities[xxii]. Additionally, in countries where crude palm oil is not produced, there is the challenge of securing palm oil as feedstock for non-food items while having enough palm oil to maintain food and energy security.[xxiii]
References
[ii] WWF- British Companies have Led the Way in Palm Oil Sustainability
[iii] WWF- 8 Things to Know about Palm Oil
[iv] Reuters- Palm Oil Demand Boosted as Rival Oil Prices Jump on Supply Woes
[v] Ibid
[vi] Reuters- India’s July Edible Oil Imports at Record High
[vii] Reuters- Palm Oil Demand Boosted as Rival Oil Prices Jump on Supply Woes
[viii] Our World in Data- Cutting down forests: what are the drivers of deforestation?
[ix] Ibid
[xi] Machová et al- The Impact of Green Marketing on Consumer Behavior in the Market of Palm Oil Products
[xii] WWF- 10 Myths about Deforestation
[xiii] Ibid
[xiv] 3Keel- 2022 Palm Report
[xvi] Ibid
[xvii] Ibid
[xviii] 3Keel- 2022 Palm Report
[xix] Ibid
Gemma recently graduated with a degree in International Development. She is currently studying for an MSc in Sustainable Urbanism, which examines urban planning and urban design through a sustainability lens. “I’m passionate about addressing sustainability challenges in a holistic and pragmatic way. Zero Carbon Academy's diverse range of services targets many of the areas that need support if we are to transition to a liveable future. I’m excited to see the impact that the Academy makes.”
