Environmental impact of palm oil

Deforestation in Riau province, Sumatra, to make place for an oil palm plantation (2007)

Palm oil, produced from the oil palm, is a basic source of income for many farmers in South East Asia, Central and West Africa, and Central America. It is locally used as a cooking oil, exported for use in many commercial food and personal care products and is converted into biofuel. It produces up to 10 times more oil per unit area as soyabeans, rapeseed or sunflowers. Oil palms produce 38% of vegetable oil output on 5% of the world’s vegetable-oil farmland. Palm oil is under increasing scrutiny in relation to its effects on the environment.

Statistics

An estimated 1.5 million small farmers grow the crop in Indonesia, along with about 500,000 people directly employed in the sector in Malaysia, plus those connected with related industries.

As of 2006, the cumulative land area of palm oil plantations is approximately 11,000,000 hectares (42,000 sq mi). In 2005 the Malaysian Palm Oil Association, responsible for about half of the world's crop, estimated that they manage about half a billion perennial carbon-sequestering palm trees. Demand for palm oil has been rising and is expected to climb further.

Between 1967 and 2000 the area under cultivation in Indonesia expanded from less than 2,000 square kilometres (770 sq mi) to more than 30,000 square kilometres (12,000 sq mi). Deforestation in Indonesia for palm oil (and illegal logging) is so rapid that a 2007 United Nations Environment Programme (UNEP) report said that most of the country’s forest might be destroyed by 2022. The rate of forest loss has declined in the past decade.

Global production is forecast at a record 46.9m tonnes in 2010, up from 45.3m in 2009, with Indonesia providing most of the increase.

Environmental issues

Satellite image showing deforestation in Malaysian Borneo to allow the plantation of oil palm

Rising demand is driving owners to clear tropical forest to plant oil palms. According to UNEP, at the current rate of intrusion into Indonesian national parks, it is likely that many protected rain forests will be severely degraded by 2012 through illegal hunting and trade, logging, and forest fires, including those associated with the rapid spread of palm oil plantations. There is growing concern that this will be harmful to the environment in several ways:

• Significant greenhouse gas emissions. Deforestation, mainly in tropical areas, accounts for up to one-third of total anthropogenic CO₂ emissions, and is a driver toward dangerous climate change.
• Habitat destruction, leading to the demise of critically endangered species (e.g. the Sumatran tiger, the Asian rhinoceros, and the Sumatran Orangutan.)

• Reduced biodiversity, including damage to biodiversity hotspots.
• Destruction of cash crops, such as fruit and rubber trees in Sarawak, Sabah and Kalimantan and Borneo, that belong to indigenous peoples (the Dayak), despite their frequent objections.

Greenhouse gas emissions

Damage to peatland, partly due to palm oil production, is claimed to contribute to environmental degradation, including four percent of global greenhouse gas emissions and eight percent of all global emissions caused annually by burning fossil fuels, due to the clearing of large areas of rainforest for palm oil plantations. Many Indonesian and Malaysian rainforests lie atop peat bogs that store great quantities of carbon. Forest removal and bog drainage to make way for plantations releases this carbon.

Environmental groups such as Greenpeace claim that this deforestation produces far more emissions than biofuels remove. Greenpeace identified Indonesian peatlands, unique tropical forests whose dense soil can be burned to release carbon emissions, that are being destroyed to make way for palm oil plantations. They represent massive carbon sinks, and they claim their destruction already accounts for four percent of annual global emissions.

Greenpeace recorded peatland destruction in the Indonesian province of Riau on the island of Sumatra, home to 25 percent of Indonesia's palm oil plantations. Growers plan to expand the area under concession by more than 28,500 square kilometres (11,000 sq mi) which would deforest half of the province.^{[citation needed]} Greenpeace claims this would have devastating consequences for Riau's peatlands, which have already been degraded by industrial development and store a massive 14.6 billion tonnes of carbon, roughly one year's greenhouse gas emissions.

Research conducted by Greenpeace through its Forest Defenders Camp in Riau documents how a major Indonesian palm oil producer is engaging in large-scale, illegal destruction of peatland in flagrant violation of an Indonesian presidential order, as well as national forestry regulations. Palm oil from peatland is fed into the supply chain for global brands. FoE and Greenpeace both calculate that forests and peatlands that are replaced by palm oil plantations release more carbon dioxide than is saved by replacing diesel with biofuels.^{[citation needed]}

Environmentalists and conservationists have been called upon to become palm oil farmers themselves, so they can use the profits to invest in their cause. It has been suggested that this is a more productive strategy than the current confrontational approach that threatens the livelihoods of millions of smallholders.

National differences

Household palm oil extraction in Democratic Republic of the Congo.

Indonesia and Malaysia

In the two countries responsible for over 80% of world oil palm production, Indonesia and Malaysia, smallholders account for 35–40% of the total area of planted oil palm and as much as 33% of the output. Elsewhere, as in West African countries that produce mainly for domestic and regional markets, smallholders produce up to 90% of the annual harvest.

In January 2008, the CEO of the Malaysian Palm Oil Council wrote a letter to the Wall Street Journal stating that Malaysia was aware of the need to pursue a sustainable palm oil industry.

Africa

In Africa, the situation is very different compared to Indonesia or Malaysia. In its Human Development Report 2007-2008, the United Nations Development Programsays production of palm oil in West-Africa is largely sustainable, mainly because it is undertaken on a smallholder level without resort to diversity-damaging monoculture. The United Nations Food and Agriculture program is encouraging small farmers across Africa to grow palm oil, because the crop offers opportunities to improve livelihoods and incomes for the poor.

Increasing demand

Food and cosmetics companies, including ADM, Unilever, Cargill, Procter & Gamble, Nestle, Kraft and Burger King, are driving the demand for new palm oil supplies, partly for products that contain non-hydrogenated solid vegetable fats, as consumers now demand fewer hydrogenated oils in food products that were previously high in trans fat content.

Friends of the Earth concluded that the increase in demand also comes from biofuel, with producers now looking to use palm as a source.

Biodiesel

Biodiesel made from palm oil grown on sustainable non-forest land and from established plantations effectively reduces greenhouse gas emissions.

However, Greenpeace has concluded that "first generation" biodiesel extracted from new palm oil plantations may not on balance reduce emissions. If wood from forests cleared for palm plantations is burned instead of used for biodiesel, leaving forests untouched may keep more carbon out of the air.

Although palm oil has a comparatively high yield, alternative vegetable fuel oil sources with such as jatropha may have a better net effect. Although palm requires less manual labor to harvest a given amount of oil than jatropha, the latter grows well in more marginal areas and requires less water.

Sustainability

Greenpeace accuses major multinational companies of turning a blind eye to peatland destruction to supply low cost vegetable oil.

The Roundtable on Sustainable Palm Oil, founded in 2004, gathers growers, processors, food companies, investors and NGOs to address this problem. Its purpose is to prod the industry into producing "sustainable" palm oil, product that is certified as not involving the destruction of important areas. Certified supply and demand have both grown slowly. In the first year of trading only 30% of sustainable oil was sold as such. In 2010, sustainable purchases represented most of the 2 million certified tonnes produced. RSPO has struggled to set standards for greenhouse-gas emissions for plantations. Its members account for only 40% of production.

Helped by $1 billion from Norway, In May, Indonesia announced a two-year moratorium on new concessions to clear natural forests and peatlands and its own rival to the RSPO, which is expected to restrict all producers.

Carbon credit programs

Meanwhile, much of the recent investment in new palm plantations for biofuel has been part-funded through carbon credit projects through the Clean Development Mechanism; however the reputational risk associated with unsustainable palm plantations in Indonesia has now made many funds wary of investing there.

Persuading users

In 2008 Unilever, an RSPO member, committed to use only palm oil which is certified as sustainable, by ensuring that the large companies and smallholders that supply it convert to sustainable production by 2015. This policy was in part a response to a Greenpeace-staged event which dispatched activists dressed as orang-utans to Unilever’s offices in London, Merseyside, in Rome and in Rotterdam. Dove, one of the company’s best-known brands, was singled out by name.

Nestlé a Swiss food giant, buys only 320,000 tons of palm oil a year and is an RSPO member. A 2010 spoof online advertisement shows an office worker eating an orang-utan finger made to look like a KitKat. Before the "ad", it had begun buying certified oil, but planned to limit itself to certified product only in 2015. On May 17, 2010, after 1.5 million viewings and 200,000 protest e-mails, Nestlé suspended all purchases from Sinar Mas and other suppliers running “high-risk plantations or farms linked to deforestation”. Nestlé recruited a Swiss charity, The Forest Trust (TFT), to review its supply chain, auditing every supplier.

World Wildlife Foundation (WWF) publishes an annual scorecard of the palm-oil policies of 59 European companies. As of 2009, twelve companies including giant retailer Metro, tied for worst, scoring 0. Sainsbury's, Marks & Spencer and Migros achieved the highest scores.

In 2010, the Nature Conservancy took representatives of America’s National Farmers Union and the American Farmland Trust to Brazil to see how illegal forest clearance was “hurting US businesses by flooding markets with cheap and unsustainable products”. A new report from David Gardiner & Associates, a consultancy, says that protecting the 13,000,000 hectares (50,000 sq mi) of mostly tropical forest that are lost annually to timber, cattle and agricultural production would boost American agricultural revenue by as much as $190 billion-270 billion between 2012 and 2030.

See also

• Food vs. fuel
• Environmental issues with energy
• Sustainable biofuel
• The Burning Season, a 2008 documentary that highlights deforestation in Indonesia for palm oil plantations

Further reading

• Butler, R. A.; Laurance, W. F. "Is oil palm the next emerging threat to the Amazon?". Tropical Conservation Science 2 (1): 1–10. http://tropicalconservationscience.mongabay.com/content/v2/09-03-23_butler-laurance_1-10.pdf. 
• How the Palm Oil Industry is Cooking the Climate. Netherlands: Greenpeace International. November 2007. http://www.greenpeace.org/international/Global/international/planet-2/report/2007/11/cooking-the-climate-full.pdf. 

External links

• Cooking the Climate - a Greenpeace report on the palm oil industry
• Palm oil publications from Greenpeace
• Bruce Parry's Penan documentary showing the social and environmental impact of palm plantations in Malaysia
• "The slippery business of palm oil" – The Guardian November 6, 2008
• "Palm oil: the biofuel of the future driving an ecological disaster now" – The Guardian April 4, 2006