Palm oil

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Palm oil is a form of edible vegetable oil obtained from the fruit of the oil palm tree. The palm fruit is the source of both palm oil (extracted from palm fruit) and palm kernel oil (extracted from the fruit seeds). In addition to being used as cooking oil and as a component of many processed foods, palm oil is used to make biodiesel. Palm oil is one of the few vegetable oils relatively high in saturated fats (such as coconut oil).

A young oil palm tree. (Source: Wikipedia)

Contents

Events

2009

2008

2007

History

Palm oil was long known of in West African states, and amongst West African peoples, and saw widespread use as a cooking oil. However, palm oil remained rare outside West Africa. During the early nineteenth century, palm oil became a highly sought-after commodity by British traders, the oil being used as industrial lubricant for the machines of Britain's ongoing Industrial Revolution, as well as forming the basis for soaps such as Palmolive. By c. 1870, palm oil constituted the primary export of West Africa. By the 1880's, cocoa became more highly sought-after, leading to the decline of the palm oil trade. (Source: Wikipedia) Palm oil was first introduced to Malaysia in 1870 as an ornamental plant and is now a leading agricultural crop. (source: MPOB)

Sustainability

  • Note: The sustainability of palm oil is addressed by the Roundtable on Sustainable Palm Oil (RSPO).
  • The environmental organization WWF has set 2015 as the target year for palm oil to be derived from entirely sustainable sources.[3]
    • However, as of May 2009, "just 1 per cent of the 1.3 million tonnes of sustainable palm oil produced since November 2008 had been sold - in part because it is more expensive", according to an article in the New Scientist.[4]
  • Forest Footprint Disclosure Annual Review (PDF file) - This February 2010 Forest Footprint Disclosure Project report makes available the results of its 2009 company disclosure request. The report "reveals the names of those businesses that have responded to its first call to disclose details of their ‘Forest Footprint’," defined as "the extent to which procurement policies for Forest Risk Commodities (FRCs) such as palm oil, soy, timber, beef, leather and biofuels are linked to deforestation. The Report identifies two high profile British High Street names as ‘Best Performers’ in their sectors – Marks & Spencer (General Retail) and Sainsbury’s (Food and Drug Retail)." [5] (PDF file)

Greenhouse gases (CO2)

  • Burning of forests to clear ground can cause significant air pollution and releases large quantities of CO2. (Reference needed)
Orangutan habitat has been cleared to create oil palm plantations in Indonesia and Malaysia.

Biodiversity

Pollution

  • Large scale burning of forest to clear land for palm oil in Indonesia is causing pollution levels to climb in Southeast Asia, resulting in mounting haze-related health problems, traffic accidents, and associated economic costs. (Source:mongabay)

Land degradation

Social sustainability

  • In Indonesia, land for plantations is often allegedly sold to companies without consultation or compensation for the indigineous people who are living there and whose livelihood comes from the forest1.

Species conservation

  • The rapid conversion of Indonesian rain forest into oil palm plantations is a direct threat to the survival of orangutans in the wild. Learn more here.

Technology/Science

Properties

  • Oil palm is regarded as the most cost-effective vegetable oil crop, with average yields of 3.5-5.0 t of palm oil per hectare per year, making it a very efficient feedstock for conversion into biofuel. (Source: MPOB)
  • Palm oil is very high in saturated fats.

Technology

Economics/Policy

  • Some researchers have suggested that anything above $55 a barrel makes palm oil-based biodiesel a commercially viable option. (Reference needed)
  • Most active biodiesel plants are heavily subsidized by the government and may not be sustainable in a truly competitive market. (Reference needed)
  • In 2007, some members of the European Parliament have called for a ban on palm oil biodiesel due to increasing sustainability concerns (see articles below).

News

2010

  • Indonesia may open more forests to palm oil, 16 February 2010 by The Malaysian Insider: "As Indonesia looks for ways to meet its ambitious emissions-reduction targets, the Ministry of Forestry yesterday said it plans to issue a new regulation that would allow commercial forestry companies to plant crops such as palm oil in new concession areas."
    • "The regulation would stipulate that at least 49 per cent of forest concessions in question be used for planting commercial forests, while up to 21 percent could be planted in crops. The remaining 30 percent would be set aside for conservation and the use of local communities."
    • "A similar regulation was issued in 1999 but was withdrawn after many forestry companies planted more of their land in palm oil than permitted."[7]
  • Palm oil plantations could be classified as forests, 8 February 2010 by The Ecologist: "European Commission guidance would allow biofuels to be labelled as sustainable even if forests have been destroyed to make way for the palm oil plantations."
    • "According to a leaked document from the European Commission, reclassifying palm plantations as forested land could be justified and allow it to meet sustainability criteria."
    • According to the document, this would mean "'for example, that a change from forest to oil palm plantation would not per se constitute a breach of the criterion.'"
    • "Friends of the Earth said the plans, if accepted, would allow rainforest to be destroyed to make way for palm plantations and the resulting biofuel to still be classified as sustainable."
    • "The EU is due to publish a report on greenhouse gas emissions from biofuel production in March 2010."[9]
  • From palm oil to cotton, Benin now shifts to rice, 4 January 2010 by Daily Nation: "Known for its palm oil and cotton production, Benin’s agriculture sector wants to become known for high-quality rice and to quit importing rice by 2011, according to the government."
    • "FAO estimates Benin is using 8 per cent of available land for rice cultivation and could save $55 million and cover 70 per cent of domestic demand if it invested more in rice production."
    • "West African rice imports reached six million tonnes in 2001 and are likely to rise to 11 million by 2010, according to FAO."

2009

  • Indonesia could double oil palm plantation area, 2 December 2009 by Mongabay: "Indonesia has 18 million hectares of land suitable for oil palm cultivation, nearly twice the 9.7 million hectares that have already been allocated for plantations, said Agriculture Minister Suswono...at the opening of the 5th Indonesian Palm Oil Conference in Bali."
    • "Roughly 7.9 million hectares of the allocated area has already been planted with oil palm."
    • "Oil palm expansion in Indonesia promises to be controversial due to environmental concerns. In February the government approved a decree that will allow the conversion of up to 2 million hectares carbon-rich peatlands, a move scientists warn could trigger the release of hundreds of millions of tons of CO2."
    • "[E]conomic returns from oil palm plantations could soon face competition under a scheme (known as REDD for reducing emissions from deforestation and degradation) that would compensate countries for protecting carbon sinks, notably tropical forests and possibly peatlands. Under some circumstances carbon conservation could outperform palm oil production....Indonesia's recent announcements about oil palm expansion across peatlands may in fact be posturing to win more compensation under a REDD mechanism."[10]
  • Success of Palm Oil Brings Plantations Under Pressure to Preserve Habitats , 17 September 2009 by New York Times: Each year, the oil palm plantations in Indonesia and Malaysia "produce millions of tons of palm oil, which has soared in popularity since the 1970s and is now found in foods like margarine, potato chips and chocolate, as well as in soap, cosmetics and biofuel."
    • "But the palm plantations are in the cross hairs of consumer groups and corporations in Australia, New Zealand, Europe and the United States. Echoing the longstanding concerns of environmental groups, they say palm oil producers continue to fell large tracts of forest to make way for plantations, destroying habitat for endangered species like the orangutan."
    • "The increasingly vocal protests are not what the industry expected five years after it began developing a certification system for producing environmentally sustainable palm oil. In 2004, the Roundtable on Sustainable Palm Oil was formed, representing palm oil producers; consumer goods manufacturers including Unilever, Johnson & Johnson and Kellogg; environmental groups like the World Wide Fund for Nature; and social and development organizations."
    • "The roundtable requires plantations to develop plans to protect rare or endangered species on their land and to assess whether there are cultural relics that need to be preserved."[12]
  • (Palm Oil:) How the World Bank Let 'Deal Making' Torch the Rainforests, 19 August 2009 by Climate Wire / New York Times: "The World Bank ignored its own environmental and social protection standards when it approved nearly $200 million in loan guarantees for palm oil production in Indonesia, a stinging internal audit has found."
    • "The audit does not address climate change or how lending for palm oil -- an ingredient in foods and a biofuel added to diesel for cars -- fits into the World Bank's new 'strategic framework' for development and climate change."
    • "Specifically, auditors said, when loaning to Wilmar International Ltd. and other firms between 2003 and 2008, the IFC did not check out concerns about the companies' supply chain plantations. The Forest Peoples Programme, a U.K.-based nonprofit group that originally brought the complaint, charged that the companies illegally used fire to clear forestland, cleared primary forests, and seized lands belonging to indigenous people without due process."
    • In a letter, nonprofit organization representatives "called on the World Bank to freeze palm oil lending, charging that IFC suffers a 'systemic problem whereby the pressure to lend and to support business interests overcomes prudence, due diligence and concern for social and environmental outcomes.'"[13]
  • Oil giants destroy rainforests to make palm oil diesel for motorists, 15 August 2009 by TimesOnline: "Fuel companies are accelerating the destruction of rainforest by secretly adding palm oil to diesel that is sold to millions of British motorists."
    • "Twelve oil companies supplied a total of 123 million litres of palm oil to filling stations in the year to April, according to official figures obtained by The Times."
    • "Only 15 per cent of the palm oil came from plantations that met any kind of environmental standard. Much of the rest came from land previously occupied by rainforest."
    • "[C]learing rainforest to create biofuel plantations releases vast quantities of carbon stored in trees and soil. It takes up to 840 years for a palm oil plantation to soak up the carbon emitted when rainforest is burnt to plant the crop."
    • "The expansion of the palm oil industry in Indonesia has turned the country into the third-largest CO2 emitter, after China and the US. Indonesia has the fastest rate of deforestation, losing an area the size of Wales every year. The expansion of plantations has pushed the orang-utan to the brink of extinction in Sumatra."[14]
  • Controversial palm-oil plan may save the orang-utan, 22 July 2009 by New Scientist: Orang-utan "researchers and conservationists in Sabah, in Malaysian Borneo, may have to do what had until recently been unthinkable: join forces with the palm oil industry whose plantations have eaten into much of the orang-utan's habitat. October this year will see an unprecedented meeting of Malaysia's palm oil producers, conservationists and local government to figure out how to protect the world's last orang-utans."
    • "Such collaborations will be especially important given the poor start for the international Roundtable on Sustainable Palm Oil (RSPO), set up in 2002, which is supposed to address the issues of environmental damage and wildlife conflict by encouraging producers to ensure their plantations are certified as sustainable."
    • "The conservation group WWF wants palm oil to be 100 per cent sustainable by 2015, but the initial results have been dispiriting. A WWF report released in May showed that just 1 per cent of the 1.3 million tonnes of sustainable palm oil produced since November 2008 had been sold - in part because it is more expensive."[15]
  • Sustainable palm oil gets boost in China, 14 July 2009 by WWF: "Major China-based producers and users of palm oil have announced they intend to provide more support for sustainable palm oil, an important boost for efforts to halt tropical deforestation."
    • "The public statement, made at the 2nd International Oil and Fats Summit in Beijing on July 9, committed the companies to 'support the promotion, procurement and use of sustainable palm oil in China,' as well as 'support the production of sustainable palm oil through any investments in producing countries.'"
    • "China is currently the world's largest importer of palm oil, accounting for one third of all global trade. Increasing demand for palm oil, which is used in everything from soap to chocolate bars, is causing considerable damage to fragile rainforest environments, threatening endangered species like tigers, and contributing to global climate change."[16]
  • Significant rise in RSPO-certified palm oil in EU, 26 June 2009 by Commodity Online: "The volume of RSPO-certified sustainable palm oil imported in European Union markets have increased significantly as producers in South East Asia comply with the Roundtable on Sustainable Palm Oil, the multi-stakeholder association working to make all palm oil production sustainable. The equivalent of more than one third of all palm oil imported into the EU could now be sold as ‘sustainable’..."
    • "RSPO rules and audits on the ground guarantee that social and environmental standards were met during the production of certified sustainable palm oil. For example, producers need to protect the habitats of endangered species and no new primary forests can be cut for oil palm plantations. The rights of local communities, smallholders and workers have to be respected as well..."
  • Brazilian miner Vale signs $500M palm oil deal in the Amazon, 25 June 2009 by Mongabay.com: "Vale, the world's largest miner of iron ore, has signed a $500 million joint venture with Biopalma da Amazonia to produce 160,000 metric tons of palm oil-based biodiesel per year....Vale says the deal will save $150 million in fuel costs starting in 2014, with palm oil biodiesel replacing up to 20 percent of diesel consumption in the company's northern operations. The biodiesel will be produced from oil palm plantations in the Amazon state of Pará."
    • "environmentalists...fear palm oil production could soon become a major driver of deforestation in the region. Cultivation of oil palm is a leading cause of forest loss across Southeast Asia, but has yet to be widely planted in the Brazilian Amazon, where deforestation is mostly driven directly by conversion for cattle pasture expansion and indirectly by expansion of industrial agriculture, including soy."
  • The world's top 15 listed palm oil planters, 9 June 2009 by Reuters: Information on the "15 largest listed palm planters, ranked by market value....mostly located in Indonesia and Malaysia".
    • Statistics provided on "plantation holdings are in hectares and include both cultivated and uncultivated land".
  • Indonesia needs $4b to avert deforestation, 4 June 2009 by The Jakarta Post: "...Indonesian deforestation could be averted if international communities grant US$4 billion until 2012 to finance the livelihood of local peoples and stop forest conversions....The Forestry Ministry said the money would be used to address the main causes of deforestation prior to the implementation of the reducing emissions from deforestation and degradation (REDD) mechanism."
    • "Many have criticized the Indonesian government for its failure to combat high rates of deforestation, which have risen to over one million hectares per year."
    • "Indonesia has about 120 million hectares of rainforest – the third-largest on the planet after Brazil and Congo."
    • "...illegal logging [can] be seen from the expansion of oil palm estates in protected areas and conservation forests in the country....local administrations still [award] licenses for forest conversion, including for plantations."
  • CPO Producers Say Green Efforts Not Paying Off, 31 May 2009 by JakartaGlobe: "While many palm oil plantations and farmers are struggling to get certificates proving their palm oil is produced in a sustainable manner, others that have the certificates are complaining that buyers in Europe don’t want to buy their products because they are too expensive."
    • "When the first batch of RSPO-certified palm oil arrived in Europe in November 2008, the company involved, Malaysia-based United Plantations, was accused by environmental organizations Greenpeace and Wetlands International of not actually meeting the RSPO’s requirements...Greenpeace maintains that the roundtable’s system fails to adequately address issues like deforestation, peatland clearance and other land-related conflicts."
    • "The EU is in the process of requiring all palm oil producers to certify both crude palm oil and derivative products. Companies that do not obtain certification by 2010 will not be allowed to sell to EU countries."
  • "Green" palm planters struggling to find buyers, 30 May 2009 by Alibaba.com: "JAKARTA, May 27 - Palm oil planters in the world's top two producers Indonesia and Malaysia are struggling to find buyers for their eco-friendly palm oil...threatening to slow momentum."
    • "Under fire from green groups and some Western consumers, the palm oil industry established the Roundtable on Sustainable Palm Oil (RSPO) in 2004 to develop an ethical certification system that includes commitments to preserve rainforests and wildlife."
    • "...the industry had so far sold only 15,000 tonnes of certified green palm oil since the first shipment last November while output might have reached around 600,000 tonnes."
    • "The issue of 'green' palm remains contentious and some conservation groups argue that the current voluntary rules are not effective in protecting the environment."
  • Palm oil could scuttle forest carbon plan: experts, 29 May 2009 by Reuters: "Carbon credits derived from a fledgling forest conservation scheme for developing nations will struggle to compete with palm oil as an investment...”
    • "...REDD allows developing countries to raise potentially billions of dollars in carbon credits in exchange for conserving and rehabilitating forests...However, profits from palm oil plantations could, in some cases, out-compete revenue from selling REDD credits…"
    • "...REDD credits arising from 10,000 hectares (25,000 acres) of conserved forest sold over a 30-year period -- where payments were front-loaded so that most of the money was delivered within the first eight years -- could fetch about $118 million if those credits could be used to meet emissions obligations for rich nations."
    • "The same credits would fetch only $14 million if their purchase was voluntary...'Whereas high-yield palm oil would get about $96 million'..."
  • Sustainability criteria must be science based, verifiable and WTO-compatible (Malaysian Minister of Plantation Industries and Commodities), 25 February 2009, by the World Refining Association: Malaysia's Minister of Plantation Industries and Commodities, the Hon. Datuk Peter Chin Fah Kui, stated in an interview that “We urge the EU to ensure that its sustainability scheme does not discriminate against third country producers and that the criteria used are science based, verifiable and WTO-compatible".
    • "One of the biggest concerns in the use of biofuels is its impact on food security [...]. As far as the Malaysian Government is concerned, the local mandate B5 if fully implemented will require only 500,000 tonnes annually or a mere 3% of our national production of CPO [Crude Palm Oil]. In fact, 90% of Malaysian palm oil is used for traditional applications such as foodstuffs and oleochemicals (soap and cosmetics), while only a small fraction is destined for biofuel production."
    • "We are engaging countries such as the EU and USA that are coming up with legislations which impose sustainability criteria on our palm and biofuel products. This includes the EU Directive on Renewable Energy."
  • Indonesia reopens peatland to palm oil plantation, 18 February 2009 by The Guardian: "Indonesia today acknowledged it had quietly lifted a year-long freeze on the use of peat land for palm oil plantations, fuelling fears of a rise in greenhouse gas emissions."
    • "Environmental groups had pressed the government to maintain the ban but Indonesia's agriculture ministry said tighter controls for issuing new permits for growing palm oil on peat land had been set after a study during the past year."
    • "To grow palm oil, the peat land that must be cleared and drained, releasing millions of tonnes of CO2 into the atmosphere. The oil is a major export product and is used in numerous foods, soaps, washing powders and as a feedstock for biofuels."
    • "Indonesia is the world's leading palm oil producer and has planted palm estates of 7.1m hectares, with smallholders accounting for about 35 percent. Palm oil generated exports revenue of £7.64bn in 2008."[18]
  • The cost of the biofuel boom on Indonesia's forests, 21 January 2009 by The Guardian: "A flurry of scientific field work and environmental reports have linked the spread of oil palm plantations in Indonesia to the decimation of rain forests, increased conflict between logging and oil palm interests and rural and indigenous people, and massive CO2 emissions through logging, burning, and the draining of carbon-rich peat lands. And most of the trouble, as I learned on a recent visit, is playing out in the Indonesian lowland rain forests on Sumatra and Borneo, an ecosystem long regarded as a global hotspot for rare and endemic species — but perhaps not for much longer."
    • "According to Indonesia's own figures, 9.4 million acres of forest have been planted with oil palm since 1996, an area larger than New Hampshire and Connecticut combined. That works out to 2,000 acres a day, or about one football field a minute....Only Malaysia, which has less at stake biologically, produces more."
    • "The week [the author] visited Sumatra, Greenpeace activists aboard the Rainbow Warrior were blockading a shipment of palm oil off its coast. A banner tied to the ship's mast read: 'Palm Oil Kills Forests and Climate.'"[19]

2008

  • Biofuels standards challenged by new report on Malaysian Palm Oil , 8 October 2008 by Friends of the Earth UK: "Malaysian palm oil is finding its way into British petrol tanks despite concerns about its carbon balance and the rainforest being destroyed to produce it - according to a new report by Friends of the Earth international."
    • "The UK Renewable Fuels Agency (RFA) has reported that Malaysian palm oil being used for fuel in the UK meets a 'qualifying environmental standard', but Friends of the Earth's research reveals it is far from green."
    • The FOE report finds that Sarawak state in Malaysia "plans to more than double its 2007 levels of oil palm acreage by 2010....at the expense of tropical forests" and that "companies regularly practice open burning on carbon rich peat soils releasing millions of tonnes of greenhouse gases into the atmosphere".[20]
    • See the report Malaysian Palm Oil: Green Gold or Green Wash?
  • First GreenPalm Certificates Traded, 4 September 2008. In its newsletter, Greenpalm announced that "just hours after the first GreenPalm certificates were offered for sale on our website (...), a bid of $50 per certificate, was received and accepted. Further bids have subsequently been made.
    The purchaser of the first GreenPalm certificates will now be able to prove that their business, or brand, supports the production of sustainable palm oil.
    The producer of that palm oil, the first in our scheme to be successfully audited against the new and rigorous Roundtable on Sustainable Palm Oil (RSPO) audit, has earned a worthwhile premium for producing palm oil sustainably."
  • Biofuels and banquets put pressure on stocks of palm oil, 9 January 2008 by the Times Online, reported that "The Malaysian Government has been forced to release emergency stocks of palm oil to break a wave of panic-buying after cooking oil prices soared. The crisis has prompted palm oil rationing in a country that is one of the world’s largest producers."

2007

  • Malaysia May Revoke Biofuel Permits as Palm Oil Rises, 11 December 2007, by Bloomberg: "Malaysia, the second-biggest palm oil producer, may revoke some licenses to produce biofuel from the commodity...as the surging price of the raw material makes the fuel too expensive to make, a minister said." The minister also noted that one of Malaysia's four biodiesel manufacturing plants may close in the face of increased prices for the feedstock, which has risen some 55 percent in the past year.[23]
  • Dutch to deny palm subsidies until green levels met, 10 December 2007: "The Netherlands warned...it will not renew subsidies for palm-based biofuel until global producers meet its environmental requirements." The Netherlands reportedly will "mandate stringent criteria to help limit environmental damage" under its green energy subsidy system in 2008. Environment Minister Jacqueline Cramer was quoted as saying that "Until the problems are solved, there will be no subsidy for palm oil....It makes no sense to use palm oil for bio-energy purposes while the carbon dioxide produced is more than what we are actually trying to save, particularly when you cut down peatforests."
  • A who's who of Indonesian biofuel, 22 May 2007, from Asia Times Online. Many of the companies that are now investing heavily in Indonesia's biodiesel industry are the sames ones that "incurred and defaulted on huge foreign debts in the wake of the 1997-98 Asian financial crisis. Few fully repaid their debts and today they still dominate the country's logging, wood-processing and pulp industries. Several also have highly suspect environmental records."

2006

Resources

See books, reports, scientific papers, position papers and websites for additional useful resources.

Regions/Countries

Look here for more detailed information on a specific country's or region's policies, organizations and industry.

Organizations

Other oil palm products

Palm oil leavings

References

  1. Promised Land - Palm Oil and Land Acquisition in Indonesia: Implications for Local Communities and Indigenous Peoples by Marcus Colchester, Norman Jiwan, Andiko, Martua Sirait, Asep Yunan Firdaus, A. Surambo, Herbert Pane; Forest Peoples Programme, Perkumpulan Sawit Watch, HuMA and the World Agroforestry Centre, 2006. "An intensive, multi-disciplinary study of the legal and institutional processes of land acquisition for oil palm plantings in Indonesia with a focus on the rights of local communities and indigenous peoples."


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