Palm Oil: Good or Bad?

On 18 December 1591, a seven-month sea voyage from Africa to England ended when a ship anchored at Limehouse docks in London. Along with 150 elephant tusks and 589 sacks of pepper, the ship carried 32 barrels of palm oil. It is thought to have been the first arrival into Europe of what would become perhaps the most controversial plant product that is not a drug.

The term palm oil covers various things we get from a species of tropical palm called Elaeis guineensis. “Crude palm oil” is squeezed from the palm’s fleshy red fruit. “Palm kernel oil” is extracted by crushing the fruit’s hard stone. Finally, many “palm oil derivatives” are acquired through industrial processes, which together accounts for about 60% of global palm oil use: it is in of all packaged products sold in supermarkets, everything from processed foods to cosmetics, soaps and detergents. It is also used as a cooking oil (predominantly in Asia and Africa), in industrial lubricants, in animal feeds and as a fuel – in 2018, half of the palm oil imported into the European Union was destined for biodiesel.

With all this thirst for palm oil, its production creates jobs in remote rural areas where alternative employment is scarce. A huge 4.5 million people across Indonesia and Malaysia earn a living from the palm oil industry, whilst a further 25 million people indirectly depend on palm oil production for their livelihoods (Indonesia and Malaysia produce nearly 85% of the planet’s palm oil). More than 40 other countries produce it, in far lower but fast-increasing quantities. The top producers in South America and Africa are Colombia and Nigeria.

So why is palm oil so controversial?

Palm oil is contributing to large scale deforestation. To meet the growing global demand for palm oil 5.5 million hectares of forest have been removed for palm oil plantations, to put this in perspective, this is an area roughly twice the size of Belgium.

Such large-scale deforestation is also responsible for habitat destruction, threatening the habitat of many endangered species. Today, less than 1,500 Bornean Pygmy Elephants remain after palm oil plantations have encroached on their habitat.

Palm oil production has also been associated with corruption, forced evictions and land-grabbing. It has sparked conflict with local communities, including indigenous peoples. There have also been serious concerns about forced labor, child labor and violations of worker rights on some plantations.

According to a recent study, replacing rainforest with oil palm plantations releases 61% of the carbon stored in the forest, mostly into the atmosphere. Each hectare of rainforest converted releases 174 tons of carbon.

Paradoxically, palm oil production is threatened by global warming, too. Not only do some palm varieties grow poorly in warmer temperatures but flooding from rising sea levels also threatens palm-oil-producing countries like Indonesia.

There are more just and sustainable ways to make palm oil. Studies show that small-scale agroforestry techniques, like those historically practiced in Africa and among Afro-descendant communities in South America, offer cost-effective ways to produce palm oil while protecting the environment.

The question is whether enough consumers care. Over 20% of palm oil produced in 2020 received certification from the Roundtable for Sustainable Palm Oil, a nonprofit that includes oil palm producers and processors, consumer goods manufacturers, retailers, banks, and advocacy groups. But barely half of it found buyers willing to pay a premium for sustainability.

So, basically, it’s up to us!