Palm oil and the environment

More than any other food ingredient, palm oil has acquired associations in the public’s mind with deforestation and threats to endangered species. Increasing numbers of people are aware of this controversy, and are looking to help resolve it, even if this is limited to their consumer choices. In this article we dig into the current state of palm oil and how it relates to you.

Palm oil is grown in the tropics, and is extracted from the fruit of the oil palm tree, Elaeis guineensis, that is native to west and central Africa. Red in colour, the palm fruit is high in carotenoid antioxidants, and also saturated fat. The finished product coming from refineries is denatured through being processed and refined.

Deforestation

Starting in the 1970s, the palm oil sector underwent exponential growth. Oil palms provide a high yield, and the oil became the cheapest on the world market. Palm oil also appealed to the food industry because it is odourless and colourless, remains semi-solid at room temperature, has a creamy texture and extends product shelf life.

… species at risk include the [orangutan, tree kangaroo], Sumatran rhino, … Sumatran tiger … and the Sumatran elephant.

Most of this expansion was centred on Indonesia and Malaysia, which today collectively represent about 85 per cent of world production. The only way this growth could occur was by encroaching on swathes of biodiverse rainforest, with the large equatorial island of Borneo most heavily affected. Deforestation, especially on peatland, which is widespread in that part of the world, is a major source of carbon emissions and contributes to climate change. In 2018, Indonesia introduced a moratorium on new palm oil plantations, but this has so far been stymied by a general lack of implementation at provincial and regional levels.

Among species whose numbers have been declining as a result of this activity is the orangutan. One of the great apes, with a distinctive appearance and reddish-coloured fur, its name is Malay for “person of the forest”. However, other species are at greater danger from palm oil; according to the environment group Mighty Earth, tree kangaroos are threatened in the Indonesian province of West Papua by the Korean–Indonesian palm oil company Korindo, and no more than 250 are believed to be left.

Other species at risk include the Sumatran rhino (no more than 80 left), Sumatran tiger (440–680 remaining) and the Sumatran elephant. Nearly all are classed as being critically endangered.

The consumer marketplace

Palm oil represents about a third of all edible oil consumed globally. It is a common food ingredient in many processed foods, and is estimated to be found in about 50 per cent of packaged products in the supermarkets. Foods most likely to contain it include instant noodles, ice cream, corn chips and biscuits.

Identifying palm oil in the ingredients list is tricky for a couple of reasons. In Australia and New Zealand there is no minimum font size for food ingredient labelling, so remember to bring your glasses or a magnifying glass when shopping. A second reason is that it is typically labelled generically as “vegetable oil”. Specific labelling of palm oil does sometimes exist, but in its absence the easiest solution for shoppers is to assume that all “vegetable oil” contains some palm. For frying oil, palm oil is largely avoided by the large fast-food chains, but ask smaller eating establishments what they are using.

A lot of ingredients derived from palm oil find their way into commercial soaps, and a palm-free alternative is a product made from other oils such as 100 per cent coconut.

Identifying palm oil in the ingredients list is tricky …

Of all the reasons for chopping down rainforest, fuelling vehicles would have to be among the most stupid. Despite this, since 2019 Indonesia has mandated 30 per cent palm biodiesel mixed with regular diesel fuel. The Malaysian state of Sarawak has a similar 20 per cent mandate that started in 2020. A recent study from the University Of Göttingen made a life cycle climate comparison of fossil diesel versus palm biodiesel, and concluded that where palm oil is grown on land previously occupied by forest it is more carbon-intensive than regular diesel.

The RSPO and sustainability certifications

As the environmental concerns swirling around palm oil became harder to ignore, in the early 2000s the World Wide Fund for Nature (WWF) engaged with some large industry players to establish the Roundtable on Sustainable Palm Oil (RSPO) in 2004. It operates under a set of eight principles that cover economic, environmental and social considerations.

Over the years, the RSPO has attracted criticism from some environment groups such as Greenpeace. At worst, the RSPO has been accused by the more radical end of the environment movement of being a greenwash organisation due to its shortcomings. A 2019 report co-authored by the Environmental Investigation Agency, called Who Watches the Watchmen? 2, accused the RSPO of continuing to fail to uphold its own standards.

One case that prompted this lack of confidence involves palm oil producer IOI. In 2010, NGOs started complaining to the RSPO, accusing IOI of land theft and planting oil palms inside a forest reserve. It took the RSPO six years to suspend IOI’s certification, which was reinstated only five months later.

RSPO administers the system for Certified Sustainable Palm Oil (CSPO), which now represents 21 per cent of the world’s supply, and may be identified on food packaging. The different levels of certification are usually presented in order of desirability as:

• 100 per cent identity-preserved CSPO that can be traced back to the plantation
• 100 per cent physically separated CSPO that can be traced to the mill or processing plant
• “Mass Balance”, a term for a mix of part-CSPO and part-uncertified oil, with no guarantee of the percentage of CSPO — a clue pointing to its use includes the term “contributes to the production of certified sustainable palm oil”, and use of an
• RSPO logo with the word “Mixed” at the bottom indicates at least 95 per cent CSPO
• “Book and Claim”, a type of offset-based trading system — again, the “contributes to …” message may be used

In its 2020 Palm Oil Buyers Scorecard, WWF ranked retailers in North America, Europe and Southeast Asia/Australia for their progress towards ensuring palm oil sustainability. Among Australia’s supermarkets surveyed, both Coles and Woolworths have commitments to reach 100 per cent CSPO by 2020, but this is weakened by the inclusion of mass balance and Book and Claim within the definition. Coles scored 8.8 out of 22 (“Lagging behind”), and Woolworths scored 11.4 out of 22 (“Middle of the pack”).

Other criticisms of CSPO include the following:

• In a 2018 study, Australian academics compared certified with non-certified plantations for biodiversity conservation, and concluded that the certified plantations performed no better.
• Another 2018 analysis by the International Union for the Conservation of Nature (IUCN) evaluated CSPO as marginally better than uncertified in preventing deforestation.
• Greenpeace UK went so far as to describe CSPO as a “con”. Palm oil has been one of the industries driving annual fires in Indonesia, and the group found that roughly three-quarters of the fire hotspots in palm oil concessions in 2019 were on land controlled by RSPO members.
• Biologist Roberto Cazzolla Gatti accused CSPO of being a greenwashing exercise, and asserted that sustainable palm oil doesn’t exist. While 99 per cent of CSPO in Borneo is on land that was deforested between 1990 and 2000, the RSPO later applied to its certification rules a 2005 cut-off for no further clearance of primary forest or high conservation areas.

Boycott or not?

Palm oil’s environmental disaster prompts some challenging questions. If people care about palm oil, which is far from certain, how to discourage them from being misled by greenwash, or from pursuing a strategically useless direction? The two directions for individuals and companies are either to endeavour to avoid palm oil altogether or to demand CSPO.

Boycotting is largely criticised in the media as being counterproductive or futile, and there is a lot of finger-wagging about how bad such a strategy is, including from grassroots groups. The first argument against a boycott is that it would hurt small farmers.

The two directions for individuals and companies are either to endeavour to avoid palm oil altogether or to demand CSPO [Certified Sustainable Palm Oil].

Secondly, it could depress palm oil prices and consequently increase demand. A third issue, if palm oil production shrank significantly, would be the damage caused by the expansion of substitute oil crops in other parts of the world. Compared to other edible oil crops, palm yields far more oil per hectare, with the result that sunflowers would need nearly six times more land, and growing soya in its place would require more than eight times more land. In South America, soya, often genetically modified, is creating another deforestation crisis.

In addition to individuals, some food retailers and manufacturers have been going palm oil-free, especially in Europe where this has often been in response to public pressure. British supermarket Iceland set a 2018 deadline for removing palm oil from its own-brand range, and added “No palm oil” stickers. In September 2020, Australian confectionery maker Darrell Lea switched to sunflower oil, admitting that the move was driven by customer concern.

Finding a strategy

It is important to recognise that further palm oil deforestation is caused by an increase in production beyond the existing land area. Factors include population growth (the world’s largest consumer of palm oil is India), increasing affluence in some countries and new uses such as automotive fuel. Stopping the industry’s ecocidal expansion is critical.

While global production has grown in recent years, the rate of growth has encouragingly been slowing. This expansion shows that over the past few years, in the face of scaremongering, personal boycotts and numerous product reformulations were only slowing down the industry’s growth rather than decimating the sector and saving rainforest into the bargain. Conversely, following the conventional media line and declining to boycott over the past few years would have led to significant further rainforest loss.

Economists at Purdue University in the US have hit on two ways to use a combination of regulation and economic signals for a good outcome. The first of these would involve Malaysia and Indonesia limiting palm oil production to 2011 levels, which would boost its price, and in a separate measure to give farmers subsidies for avoiding deforestation. The second involves the rest of the world setting tariffs on palm oil imports, slowing demand. This could be pursued in conjunction with the same subsidies for avoiding deforestation.

Beyond palm oil, companies are increasingly implementing across-the-board no-deforestation policies rather than tackling each tropically sourced ingredient in a piecemeal fashion. Some of this is being carried out via the Tropical Forest Alliance, which is pursuing a zero-deforestation goal across range of industries, including palm oil, soya, cocoa, cattle and timber.

Turning palm oil plantations back into rainforest

On Borneo, in the Malaysian state of Sabah, a German charity called the Rhino and Forest Fund is embarking on a pioneering project to convert 15.5 hectares of palm oil plantation back into rainforest, monitored by scientists. If this plan gets off the ground, the goal is to purchase more of these plantations in order to create wildlife corridors that prevent isolated populations of threatened species from going locally extinct.

Time to cut back

In an ideal world, the onus should not be on the overburdened shopper to help resolve this crisis, either via consumer habits or lobbying. However, individuals can make a small difference.

For a long time, there has been a largely unconscious belief that the natural world exists to pander to human convenience, but fortunately increasing numbers of people are waking up and rejecting this outmoded view. Affluent society has succeeded in keeping itself clean with generous amounts of palm oil soap, but the price measured in biodiversity terms has been steep.

While the solution to palm oil typically involves the dilemma of trading off two less-than-ideal consumption choices against one another, there is a third option which is to cut back on consumption of all edible oil in processed food, and to obtain healthy fats from other sources. Fundamentally, the palm oil dilemma has a message about voluntary frugality in a profligate and wasteful consumer society.