I suppose with a subheading like “Is Palm Oil Sustainable?” I give away the answer. Palm oil may be organic, natural, and renewable, but its adverse effects are severe. The primary production is in Asia, primarily Indonesia and Malaysia. Still, it is grown in Brazil and parts of Africa where the warm climate and ample water make it easy to grow.
How Vital is Palm Oil?
For Producers and Consumers
Palm oil is used in surprising products. Palm oil has been used for years for cooking, primarily in Asia. It is still used extensively in China and India for cooking, but its use elsewhere has changed and expanded. It is now critically important as an ingredient in other products.
Why Palm Oil
A big reason for the explosion in palm oil use occurred with the medical case against saturated and trans fats. Trans fats are oils that must be partially hydrogenated to stay solids at room temperature. In the 1990s, investigations found that trans fats are a contributing factor to heart disease, the number one cause of death in the United States. There was a movement to replace trans fats, and palm oil is a perfect substitute. In 2001, the FDA officially stated that trans fats and saturated fats increase the risk of chronic diseases and cancer, which only boosted the market for palm oil.
Palm oil is unique in food processing because it naturally stays solid at room temperature and is now used in nearly all processed foods. It is used in chips, cookies, margarine, frozen pizza, donuts and more. Once palm oil became readily available, it also displaced animal tallow in soap, cosmetics (like lipstick), shampoo (it makes it foam), body lotion, and more. Over 70% of personal care items today contain one or more palm oil derivatives. It is also used by fast food companies like McDonald’s, Subway, KFC, and most others. While the number of outlets may be roughly stable in Europe and North America, these companies have experienced massive growth in India, China, and Southeast Asia, contributing to the rising demand for palm oil.
Palm oil is considered more “natural” than other oils or animal byproducts, so it only grows in popularity. The lure of “natural” is a key driver in use in western countries.
Another very important driver in the demand for palm oil production is the European Union's drive to renewable resources as they move away from fossil fuels. Europe uses palm oil to produce biofuels just as the US does with domestic corn to produce ethanol. The majority of Indonesia’s substantial production goes to Europe for this purpose.
For Exporters
For manufacturers and growers, palm oil is highly cost-effective. The agricultural cost of manufacturing palm oil is less than other oils, as it is much more productive per hectare. On average, palm oil energy production is 5x that of rapeseed oil production, 8X sunflower oil production, and 10x that of soybean oil production. Because palm oil is grown in the tropics, it has the added benefit of a year-round growth cycle and multiple crops yearly. All in all, palm oil is a wonder crop.
Palm Oil is the dominant crop in Malaysia and Indonesia. Those two countries also produce the great majority of Palm Oil. Most of Indonesia’s output goes to Europe for Biofuels. Palm Oil production is also moving into new territories in Latin America and Africa.
The Problem with Palm Oil
The good is often offset by the bad. In this case, the very good – palm oil – is offset by some severe ecological problems.
The most visible problem to locals, albeit not the worst problem internationally, is smoke. In the past few decades, the yearly dry season in Indonesia has been a time for burning the forest. This has been an aspect of tropical forests for thousands of years. Burning parts of the forest makes them suitable for a few crop growth seasons. This process is called slash-and-burn; burning renews the forest floor, which has been leached of most nutrients. Recent changes have increased smoke and the effect on local pollution.
Slash-and-burn at a greatly expanded scale has become the default for palm oil plantations. It has the “benefits” of clearing the land to plant oil-producing palms and enrich the soil. But it generates smoke pollution on a massive scale. Traditionally, these fires burn for a short time and then are extinguished by monsoons. Climate change has changed the timing and severity of rainfall, resulting in much more pollution for the region. Smoke pollution affects entire countries as these fires burn unabated, sometimes for months. The random changes in rainfall have negatively changed the life cycle of these fires. When the fires burn too long, the peat layer can ignite and is exponentially harder to contain.
But the most visible problem of smoke is not the most serious. The most severe problem with palm oil is also a result of slash-and-burn agriculture. Slash-and-burn is carried out in the rainforests. These rainforests hold much of the world’s carbon and much of the world’s unique flora and fauna. Regarding carbon, approximately 1.5 billion tons of carbon is released yearly by slash and burn. This is between 92% and 94% of the absorbed carbon fixed in the affected area per burn. Slash-and-burn returns minerals into the soil but releases carbon. Additionally, removing forest growth reduces the future ability to anchor carbon. Crops like oil palms also store carbon, but the rainforests anchor nearly 100 times the amount anchored by corps.1
To get an idea of how much of the rainforests were converted to palm oil plantations between 1960 and 2021, Malaysia and Indonesia converted a total of about 81,000 square miles, about the size of Nebraska. For the world, the amount of land converted is about the size of California.
This converted land is stripped of its biodiversity, much of which remains undiscovered in areas like Sumatra and Papua New Guinea. Palm oil plantations do not support a variety of animals and plants. The monoculture destroys the area’s capability to support a variety of flora and fauna.
Addressing the problems
The Roundtable on Sustainable Palm Oil (RSPO) was created in 2004. This is an international compact that strives to control the negative effects of palm oil production in the environment and on workers. Malaysia and Indonesia also have sustainable standards set in MSPO and ISPO, respectively. However, accepting these “sustainable” standards is voluntary for each plantation and the adoption of these standards has been very limited.
Only 17% of Indonesia’s palm oil coverage is certified by the ISPO. In Malaysia, 19% is certified by the RSPO or MSPO. In total, about 20% of palm oil produced is certified by the RSPO.
RSPO has quite a few detractors. RSPO has been disparaged because it is beholden to the producers, is slow to act, and enables greenwashing. Palm Oil marketed as “sustainable” is more expensive to consumers than non-certified oil, even though the effect on the rainforests is the same with products or either type.
Despite promising a total commitment to conservation, the RSPO participants engage in converting forests to plantations unabated.
The Future
Given the growth in demand and the location of land capable of supporting palm plantations, we will continue to see growth in the land used to produce palm oil. Countries in Africa, like Nigeria, are actively investing in this sector.
Production will continue to increase until a better product is available.
To answer the question posited in the sub-heading, “Is Palm Oil Sustainable?”; qualified yes (apologies to Evita). The negative effect is major, but the timing is minor. Nations and people are short-sighted about ecological problems. The trade off between a public good for the world - less climate change long term, and the short term benefit - a sustainable export for countries is normally decided with the short term returns being more important.
I would be derelict in mentioning that the idea of limiting palm oil production is a “first world problem.” We in the west might assume that the decision to save rainforests is a public good, ignoring the very positive effect on national income and local workforce in the region.