What is palm oil?

Palm oil is a vegetable oil with a growing share of growing worldwide demand for vegetable oil.

It is the world’s most popular vegetable oil and its most traded: 72 million tonnes were produced in 2018.

Vegetable oil yield per hectare
(tonnes)

Source: Oil World 2019 annual

How is palm oil produced?

Oil palms produce fresh fruit bunches (ffb) continuously over their 25-year life. Competing vegetable oil seeds are annual crops. Palm is grown +/-5º of the equator.

Fresh fruit bunches are steamed and then squeezed to yield crude palm oil. Separately, a nut is extracted from the fruit kernel and pressed to produce palm kernel oil (PKO).

Main producers of palm oil - 2018

Source: Oil World 15 Feb 2019 (No.7 Vol 62)

How are palm oil and palm kernel oil used?

Approximately half of products found in a UK supermarket contain palm oil or PKO, including shampoos, cosmetics, ice cream, biscuits, chocolate and cereals.

Is palm oil efficient?

Palm is extremely efficient in land use: tonnes of oil per hectare:

It produces 40% of the world’s vegetable oil on only 8% of the area devoted to vegetable oil cultivation.

Production per hectare
(tonnes)

Oil World: 2015-16 growing season

Is palm oil bad for you?

On balance there is no evidence to support assertions that palm oil is associated with adverse nutritional outcomes in humans. Growing production of palm oil has reduced human consumption of harmful trans fats.

Can palm oil be sustainable?

Yes. The Roundtable for Sustainable Palm Oil (RSPO) has an independently-audited standard covering a wide range of social, environmental and economic criteria.

RSPO was established in 2004 with diverse membership:

  • Environmental pressure groups: eg Oxfam, ZSL;
  • Global bodies: eg WWF; WRI;
  • Leading FMGC groups and retailers: eg Nestle; Modelez; Carrefour, Sainsbury’s; Bayer; Danone; L’Oréal;
  • Banks: IFC; Rabobank; HSBC;
  • Palm oil growers and traders.

8 principles tested for RSPO certification

  1. Commitment to transparency
  2. Compliance with applicable laws and regulation
  3. Commitment to long-term economic and financial viability
  4. Use of appropriate best practices by growers and millers
  5. Environmental responsibility and conservation of natural resources and biodiversity
  6. Responsible consideration of employees, individuals and communities
  7. Responsible development of new plantings
  8. Commitment to continuous improvement in key areas of activity

Is palm oil sustainable now?

Forty per cent of the world’s palm oil producers are members of the RSPO, as well as many product manufacturers, retailers, environmental and social non-governmental organisations.

RSPO oil can be bought for a premium of only US$2-20/tonne.

 
20% of the world’s palm oil is currently produced sustainably…

… but despite the low premium it commands, only half of this is bought.
 

Is it sensible to avoid or ban palm oil?

“Oil palm is highly efficient. Simply using another type of oil might take up
more land leading to more deforestation. We may be able to protect [our forest
relatives] through simple choices, like buying products from deforestation-free
sustainable palm oil from companies that support local people using
existing plantations without cutting down more rainforest.”

Sir David Attenborough, 2019