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Palm Oil: A Sustainable Choice with Environmental and Economic Advantages


In the realm of vegetable oils, sustainable palm oil stands out as a route to lower greenhouse gas emissions, better land use efficiency, increased conservation potential, and large-scale employment opportunities. By rooting out unsustainable agricultural practices and focusing on sustainable farming and processing, we can reap the rewards of this commodity without the historical downsides that have plagued the industry. 

Environmentally-friendly and sustainable palm oil is produced using sustainable practices such as planting oil palm trees on degraded land, using integrated pest management techniques to reduce the use of pesticides, retaining natural vegetation buffers around plantations to protect water quality and wildlife, and using renewable energy sources to power plantations.

The economic benefits of sustainability include increased productivity as sustainable practices can lead to increased yields of oil palm fruit, which boosts profits for farmers and companies. Sustainable practices also help to reduce the costs of production, such as the cost of pesticides and fertilizers while improved market access mean producers and manufacturers are able to meet demand from consumers who are increasingly demanding sustainable products, so companies that produce environmentally friendly palm oil may have better access to markets.

It also benefits labour employed in the production of palm oil by improving livelihoods, reducing conflict between small-scale farmers and large plantations and wildlife, and raising environmental awareness and encouraging people to make more sustainable choices.

When implemented effectively, sustainable farming practices reduce deforestation through planting oil palm trees on degraded land or by using existing plantations more efficiently, improves water quality by reducing the use of pesticides and fertilizers and by retaining natural vegetation buffers around plantations, increasing biodiversity by planting a variety of trees and plants on plantations and by providing habitat for wildlife. It also reduces greenhouse gas emissions by using renewable energy sources and by planting trees that absorb carbon dioxide.

Existing certification schemes like the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme , the Indonesia Sustainable Palm Oil (ISPO) Certification Scheme and the multilateral Roundtable on Sustainable Palm Oil (RSPO) have an important role to play in supporting the due diligence and risk mitigation processes of operators and traders aiming to minimise the environmental impact of the palm oil industry, especially in Indonesia and Malaysia, the two largest producers. This will create opportunities for the health, environmental and economic benefits of palm oil to be maximised. If the aim is to produce environmentally friendly palm oil, then certification of farmers and producers is essential.

Certification schemes draw their memberships from stakeholders across the entire value chain, including oil palm producers, palm oil processors and/or traders, consumer goods manufacturers, retailers, banks and investors, environmental/nature conservation non-governmental organisations (NGOs) and social and developmental NGOs

More crucially, they exist to secure real impacts on the ground as they tie deforestation objectives into a holistic set of standards on environmental, social and human rights. 

For example, RSPO certification has been found to reduce deforestation rates by 33 per cent and is associated with a 20 per cent lower impact on biodiversity compared to non-certified palm oil.

Palm oil certified as sustainable by the MSPO and RSPO certification schemes also deliver:

Greenhouse Gas Emissions:

Palm oil exhibits lower greenhouse gas (GHG) emissions compared to other vegetable oils. Research published in the journal Nature Communications indicates that sustainable palm oil production releases fewer GHG emissions than soybean, sunflower, or rapeseed oils. Furthermore, palm oil-based biodiesel from sustainable plantations produces less than one-third of the emissions generated by fossil fuels, making it an effective tool in reducing carbon footprints.

Land Use Efficiency:

Palm oil boasts remarkable land use efficiency, requiring less land to produce a given amount of oil compared to other vegetable oils. Transitioning to alternative vegetable oils like sunflower, rapeseed, or soybean is not a solution as they have considerably lower yields per hectare compared to palm. Because of its high yield, palm oil requires only around one-ninth ofthe land of its counterparts. To keep pace with growing food demand would require 36 million hectares of additional palm oil land, whereas soybean, the second most popular oil crop, would need 204 million more hectares, resulting in increased deforestation and habitat destruction. This makes palm oil a more sustainable choice, preserving vital ecosystems and conserving biodiversity.

Conservation Efforts:

Sustainable palm oil production emphasizes conservation through initiatives like the RSPO. This organization sets rigorous standards for environmental protection, including the preservation of high conservation value areas and no planting on peatlands. European and Brazilian vegetable oils, on the other hand, often lack similar comprehensive conservation measures, making palm oil a superior choice in terms of environmental sustainability.

Employment Opportunities:

Palm oil cultivation creates significant employment opportunities, particularly in developing countries where the industry is prominent. The RSPO estimates that oil palm farming provides an income for over 7 million smallholder famers globally. These farmers are crucial to the socio-economic development of their communities: in Malaysia, palm oil has been a key contributor to reducing poverty from 50 per cent in the 1960s to just 5 per cent today, with smallholder production accounting for 40 per cent of total palm oil plantation areas. European and Brazilian vegetable oils do not possess the same level of employment generation, making palm oil a key driver of economic growth and social stability.

European and Brazilian Vegetable Oils: Not a Better Alternative:

European vegetable oils, like rapeseed and sunflower, often require extensive land use and have higher GHG emissions than palm oil. Additionally, Brazilian vegetable oils, such as soybean, are associated with large-scale deforestation in the Amazon rainforest. These factors undermine their environmental and sustainability credentials.