Is Palm Oil Bad For The Environment? Statistics, Trends, Facts & Quotes

Written by

Inemesit Ukpanah

Last updated

26 April 2024

Palm oil, a type of vegetable oil derived from the fruit of oil palm trees, is a ubiquitous ingredient found in many products, from food to cosmetics and even biofuel. Despite its widespread use, the production and consumption of palm oil have sparked significant environmental concerns. 

Indonesia and Malaysia account for over 85% of global palm oil production. This crop offers a greater yield at a lower cost of production than other vegetable oils. In 2023, the global palm oil production was around 79,464 thousand metric tons, with Indonesia and Malaysia being the world’s largest palm oil-producing nations. 

Palm oil consumption has also increased, with over 71 million metric tons consumed worldwide in 2021/22. In addition, the European Union, a region known for its high palm oil consumption, has experienced a remarkable shift in recent years. Once consuming a staggering 6.6 million metric tons annually between 2015 and 2020, the EU has reduced its appetite for palm oil to just 5 million metric tons in 2021, with little change since then. 

This significant reduction showcases a growing awareness and commitment to sustainability within the European Union as the world grapples with palm oil production’s environmental impacts.

This article aims to provide a balanced, in-depth analysis of the environmental implications of palm oil production and consumption. 

What is Palm Oil, And Which Industry Uses It Exactly?

Palm oil is an edible vegetable derived from the mesocarp, or reddish pulp, of the fruit of oil palms, specifically the Elaeis guineensis species. It is a highly saturated vegetable fat that is semi-solid at room temperature. It is commonly used in cooking, particularly in the tropical regions of Africa, Southeast Asia, and Brazil. 

Palm oil is a highly versatile ingredient in approximately 60% of all packaged products in supermarkets today. It is used in various products, from food to cosmetics and biofuel.

In the food industry, it is used in various processed foods, including peanut butter and chips, and is often labelled as palm shortening. It is a replacement ingredient for hydrogenated fats in different baked and fried products. In the cosmetics industry, it is found in products like lipstick and soaps, while in the biofuel industry, it is used to a small extent. 

These trees grow in regions around the equator and thrive on sunshine, temperatures between 24 and 32 degrees centigrade, and rainfall evenly distributed throughout the year. 

Palm oil accounted for about 33% of global oils produced from oil crops in 2014, and on average, humans consumed 7.7 kg (17 lb) of palm oil per person in 2015.

What Are the Main Uses of Palm Oil?

According to WWF, palm oil is a versatile product with various uses across various industries. Here are some of the primary uses of palm oil:

1. Food Industry: Palm oil is extensively used in the food industry due to its lower cost and high oxidative stability. It produces cakes, chocolates, biscuits, margarine, and frying fats.
2. Cosmetics and Personal Care Products: Palm oil is pervasively used in personal care products. It is used in lipstick as it holds colour well, doesn’t melt at high temperatures, and has a smooth application with virtually no taste. It is also used as a conditioning agent in shampoos to restore the hair’s natural oils.
3. Cleaning Products: Palm oil is refined to create soaps, washing powders, and other cleaning products. It provides the foaming agent in nearly every soap, shampoo, or detergent.
4. Biofuel: Palm oil is used as a biofuel, although it is relatively minor compared to its use in food and personal care products.
5. Other Uses: Palm oil can be used as an adhesive that binds together the particles in fiberboard. It is also used in the production of calf milk replacer.

Palm Oil Nutrition Facts 

It’s important to note that palm oil is 100% fat, half of which is saturated. It also contains vitamin E. Red palm oil contains antioxidants called carotenoids, which your body can convert into vitamin A. However, palm oil contains no carbohydrates, protein, or dietary fibre. 

Environmental Impact of Palm Oil Production

Despite its productivity, the expansion of palm oil plantations often comes at the expense of tropical forests, which form critical habitats for many endangered species. The large-scale conversion of these forests to oil palm plantations has a devastating impact on many plant and animal species, leading to an increase in human-wildlife conflict as populations of large animals are squeezed into increasingly isolated fragments of natural habitat. 

Palm oil production also contributes to pollution. A palm oil mill generates 2.5 metric tons of effluent for every metric ton of palm oil it produces. The direct release of this effluent can cause freshwater pollution, affecting downstream biodiversity and people. Additionally, the indiscriminate application of pesticides and fertilisers can pollute surface and groundwater sources. 

Palm Oil and Deforestation

Palm oil production has been a significant driver of deforestation, particularly in tropical regions. According to the Food and Agriculture Organization (FAO), palm oil has contributed to an estimated 5% of tropical deforestation. When considering global deforestation, palm oil contributes to 2.3%. 

In Indonesia, Malaysia, and Papua New Guinea, which produce over 80% of the world’s palm oil, deforestation for oil palm cultivation reached a historic high of 400,000 hectares per year between 1997 and 2006. Between 1990 and 2005, 55-60% of oil palm expansion in Indonesia replaced virgin forests, equivalent to more than five million football pitches

However, recent data from Chain Reaction Research (CRR) indicates a decreasing trend for deforestation linked to palm oil. In 2021, deforestation in Indonesia, Malaysia, and Papua New Guinea fell to its lowest since 2017. 

Contribution of Palm Oil Production to Carbon Emissions

Palm oil production contributes significantly to global carbon emissions. Converting peat swamp forests to palm oil plantations releases large amounts of greenhouse gases (GHGs). 

Research shows that palm oil plantations on peatland contribute between 16.6% and 27.9% of total greenhouse gas emissions from Malaysia and Indonesia, equating to 0.44% and 0.74% of annual global emissions. 

Moreover, the International Council on Clean Transportation estimates that palm-driven land use change in Indonesia and Malaysia has emitted roughly 500 million tonnes of CO2e yearly, contributing 1.4% of global net CO2e emissions. This is almost as high as global emissions from the aviation sector and more than the total GHG emissions from California.

Water Pollution and Biodiversity Loss

For every metric tonne of palm oil produced, 2.5 metric tonnes of palm oil mill effluent (POME) are generated from the milling process. The release of POME into waterways harms aquatic ecosystems. This means palm oil leads to significant water pollution. 

Statistics on the Loss of Biodiversity in Palm Oil-Producing Regions

1. Palm oil plantations often replace ancient forests that support high levels of biodiversity.
2. Only around 15% of forest species can survive in plantations
3. Globally, palm oil production is affecting at least 193 threatened species
4. In Southeast Asia, 45% of sampled oil palm plantations came from areas that were forests in 1989, leading to significant biodiversity loss
5. Indonesia (57%) and Malaysia (27%) dominate global palm oil production

Top Five Ranking Producing Countries of Palm Oil 

The palm oil industry plays a significant role in the economies of these countries. For instance, in Indonesia and Malaysia, the palm oil sector employs almost 5 million people directly and 6 million indirectly. 

Here is a list of the top 5 ranking countries based on their metric tons of production. 

1. Indonesia: 47,000,000 metric tons
2. Malaysia: 19,000,000 metric tons
3. Thailand: 3,450,000 metric tons
4. Colombia: 1,900,000 metric tons
5. Nigeria: 1,500,000 metric tons

Is Palm Oil Sustainable?

Palm oil can be sustainable if produced and managed responsibly. It is the world’s most widely used vegetable oil, accounting for 38% of the world’s vegetable oil output on just 5% of its farmland. However, palm oil production has positive and negative impacts on the environment, economy, and society.

On the other hand, sustainably produced palm oil can help address the impact problems. For example, the Roundtable on Sustainable Palm Oil (RSPO) certification ensures that labour rights in the value chain are respected and that there is no child labour, forced labour, or discrimination. The Roundtable on Sustainable Palm Oil (RSPO) was established in 2004 to promote the growth and use of sustainable palm oil products through global standards and multistakeholder governance. 

Oil palms can be harvested yearly, providing farming families in tropical areas with a year-round income. However, the palm oil industry has been associated with negative environmental impacts, such as deforestation, loss of biodiversity, and greenhouse gas emissions. 

Is Palm Oil Toxic?

It is a versatile oil used in various food and cosmetics products. However, whether palm oil is toxic depends on several factors, including its state (fresh or oxidised), consumption levels, and individual health conditions.

Fresh palm oil contains 50% saturated fatty acids but does not promote atherosclerosis and arterial thrombosis. It has many antioxidants, beta-carotene, and vitamin E, which benefit health. Palm oil is naturally trans-fat-free and high in vitamin A, providing 15 to 30 times more vitamin A than carrots and tomatoes. 

However, palm oil, which is 50% saturated, has a more favourable fatty acid composition than palm kernel oil and coconut oil, which are more than 85% saturated. Some studies have found that palm oil consumption produced LDL or “bad” cholesterol in slightly higher amounts than other vegetable oils.

The Trade-Offs: Palm Oil vs. Other Vegetable Oils

Despite the environmental concerns, palm oil is the most resource-efficient vegetable oil, requiring considerably less land to produce the exact yield than other oils. For instance, every hectare of land that produces 0.7 tonnes of sunflower oil can produce 3.8 tonnes of palm oil. 

Moreover, palm oil production is often economically viable in sites unsuitable for most other crops and generates considerable wealth for some actors. If we were to meet global oil demand from alternatives to palm oil, we would need significantly more land, leading to potentially more significant environmental impacts.

Can Palm Oil be Recycled?

Yes, palm oil can be recycled. In the crude palm oil (CPO) production process, waste materials such as empty fruit bunches (EFB), fibre, shells, and palm oil mill effluent (POME) are generated.

These waste materials can be recycled and used as organic fertilisers and fuel. For example, Golden Agri-Resources has achieved 100% recycling of waste from the CPO production process in their upstream operations since 2015.

Additionally, cooking oil, including palm oil, can be collected and recycled to produce soaps, candles, and renewable energy. It can be collected and brought to recycling centres, which accept cooking oil. 

Moreover, palm oil wastes can be recycled to produce a pozzolanic cement replacement material for concrete. Another study has shown that used palm oil can be recycled to make white bio oil, bio petroleum diesel, and heavy fuel.

What Are The Alternatives to Palm Oil?

One promising alternative to palm oil is PALM-ALT, a plant-based palm fat replacer developed by researchers at Queen Margaret University in Scotland. This alternative is 100% plant-based, can be sourced entirely within the European Union and the United Kingdom, and is healthier and more environmentally friendly than palm oil. 

It is 25% lower in total fat and 88% lower in saturated fat compared to palm oil, offering a healthier option for consumers. 

Notwithstanding, there are several alternatives to palm oil, each with its benefits and drawbacks.

1. Microbial Oil: C16 Biosciences, a company founded by MIT alumni, has developed a microbial oil to replace palm oil. This oil is not chemically identical to palm oil but contains the same fatty acids, allowing it to function similarly in food, beauty, and personal care products. 
2. Canola (Rapeseed) and Sunflower Seed Oils are popular palm oil replacements. However, they require a lot of land and water to produce and take longer to grow.
3. Coconut Oil: This alternative is similar to palm oil in terms of affordability and quality. However, coconut trees are also limited to tropical locations, and the same amount of land would have to be used for growing if it were to replace palm oil groves.
4. Shea Oils: Shea butter is rich in vitamins A and E. While it may not wholly replace palm oil in all applications, it is a sustainable and eco-friendly option for consumers seeking effective and environmentally responsible products. However, palm oil is cheaper than these alternatives.
5. Annatto Oil: This vegan alternative to palm oil can be used in cooking. It is made by soaking annatto seeds.
6. Ghee: This is considered an excellent all-around substitute for palm oil, especially in cooking.
7. Other Oils and Fats: Other alternatives include olive oil, sweet almond oil, cocoa butter, and beeswax, which are used in soap making. Tallow and lard are also mentioned as alternatives, especially in soap-making

While these alternatives show promise, it’s important to note that each has its challenges, including cost, availability, and differences in physical properties. Therefore, combining alternatives and sustainable palm oil production practices may be the most effective approach to addressing the environmental and health concerns associated with palm oil.

Palm Oil Statistics, Trends, Facts and Expert Quotes

Palm oil is a significant commodity in the global market, with a wide range of applications in food, cosmetics, and biofuels.

Here are some key statistics, trends, facts, and quotes related to the palm oil industry:

Statistics and Trends

• In the 2022/23, the United Kingdom imported approximately 383.4 thousand metric tons of palm oil. 
• The UK’s palm oil imports have remained relatively static, ranging from 380Kt to 425Kt between 2015 and 2021.
• The wholesale price range for UK palm oil in 2023 is between £0.51 to £1.54 per kilogram.
• The UK is a net exporter of palm oil, with the annual growth of UK palm oil in value between 2015 and 2019 being -3 %.
• The UK holds position 1 in world palm oil exports, with its top export markets being Ireland, Morocco, Belgium, Iraq, and Malta.
• The UK is a net exporter of palm oil. In 2019, the UK exported 229 tonnes of palm oil, earning the country £23.2m
• Palm oil production has grown consistently at a CAGR of over 5% over the last decade.
• Palm oil is the world’s highest-yielding and least expensive vegetable oil. Of the total world production, 5% is used for biofuels, 24% for cosmetics, and 71% for the food industry.
• It is estimated that 33% of all the products in a local UK supermarket contain palm oil.
• More than 60% of palm oil produced in 2020 was exported, providing an essential source of foreign exchange revenue for exporting countries.
• Palm oil meets 40% of the global demand for vegetable oil
• Voluntary Sustainability Standards (VSS)-compliant oil palm fruit now represents 17% of total global production
• The palm oil sector employs almost 5 million smallholders and workers in Indonesia and Malaysia and a further 6 million people indirectly. It is responsible for nearly 3 million downstream jobs in importing countries.
• The global market value of the palm oil sector exceeded £48.5 billion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of at least 4% to reach £63.2 billion by 2027. 

Facts

• Palm oil is the world’s highest-yielding and least expensive vegetable oil, making it a popular choice for millions of companies globally.
• Approximately 90% of the world’s oil palms are grown in Malaysia and Indonesia.
• Palm oil is found in around half the items on supermarket shelves, from food to cosmetics, and is used for biofuel.
• It is estimated that 33% of all the products in a local UK supermarket contain palm oil.
• Palm oil is linked to deforestation, with 8,800 hectares of deforestation linked to UK palm oil imports between November 2021 and July 2023.
• In 2019, 70% of the total palm oil used in the UK came from sustainable sources that don’t harm nature or people.
• Every hectare of land that produces 0.7 tonnes of sunflower oil can produce 3.8 tonnes of palm oil.
• Palm oil is rich in antioxidants, namely vitamin E, which supports the immune system, prevents heart diseases, and lowers cancer risk.

What do people say about palm oil?

Palm oil contributes to global warming as forests are cleared to make way for oil palm plantations

Matt Piotrowski, Director of Policy and Research at Climate Adviser

Palm oil is a very productive crop. It offers a far greater yield at a lower cost of production than other vegetable oils. Global production of and demand for palm oil is increasing rapidly. But such expansion comes at the expense of tropical forests—which form critical habitats for many endangered species and a lifeline for some human communities

World Wildlife Fund (WWF)

People have been screaming and shouting for sustainable palm oil, but as soon as it is available, they find all kinds of excuses and disappear out of that door. Sustainability is a shared journey. If you want the world to produce sustainable timber, beef, chickens, cars or palm oil, you must support that movement and be a part of the change

Carl Bek-Nielsen, Chief Executive Director of United Plantations Bhd

Palm oil is simply the superior crop for its effective land utilisation

The Malaysian Palm Oil Council.

The warm, humid climate of the tropics offers perfect growth conditions for oil palms. Day after day, huge tracts of rainforest in Southeast Asia, Latin America, and Africa are being bulldozed or torched to make room for more plantations, releasing vast amounts of carbon into the atmosphere

Rainforest Rescue

We are working with the palm oil-based industry in the Netherlands to find ways to promote sustainable palm oil production and appropriate certification schemes

Marcel Silvius, a renowned climate expert at Wetlands International in the Netherlands

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