Palm oil is the most commonly used vegetable oil globally and presents significant advantages for food manufacturers. It is not only more cost-effective than other oils, but it also boasts a long shelf life and various processing benefits, including stability at high temperatures and solidity at room temperature. Consequently, it has emerged as a favored substitute for partially hydrogenated oils. Moreover, palm oil is much more land-efficient than other vegetable oils, yielding ten times more oil per hectare compared to soybeans and significantly surpassing the yields of sunflower and rapeseed.
However, the Rainforest Action Network (RAN) expresses particular concern regarding the Indonesian island of Sumatra, where the rainforest habitat of orangutans, rhinos, clouded leopards, and sun bears is vanishing due to what the organization claims are illegal palm oil plantations. RAN reports that companies like Nestlé, Mars, and Hershey source palm oil from this region through intricate supply chains, which sometimes involve commodity traders dealing with suppliers who engage in illegal logging. In 2014, the United Nations committed to halving deforestation by 2020 and completely ending it by 2030. Many consumer packaged goods (CPG) companies have aligned their own palm oil sourcing policies with this pledge.
The production of palm oil in Malaysia and Indonesia is contentious, as some companies are involved in widespread deforestation and the burning of peatland for palm oil cultivation. The United Nations identifies palm oil plantations as a significant source of environmental degradation and biodiversity loss in Southeast Asia. Although there are alternatives to palm oil, some of them come at a higher cost, while others are far more sustainable. For instance, algae can produce approximately 70,000 pounds of oil per acre, compared to palm oil’s yield of 4,465 pounds per acre. In comparison, olives yield about 910 pounds per acre, and soybeans only produce 335 pounds.
Manufacturers of confectionery and snacks appear committed to continuing the use of palm oil. However, some acknowledge that achieving sustainability is more challenging than they initially expected. “While we remain deeply committed to pushing all stakeholders to accelerate traceability and bring full transparency to this supply chain along with our supplier partners, we realized it would take more time to achieve this goal than originally anticipated,” stated Jeff Beckman, Hershey’s communications director, to The Guardian.
This is a formidable challenge, but some companies have already realized their sourcing targets. Mondelez announced in 2013 that it had met its benchmark of utilizing palm oil that was 100% certified by the Roundtable on Sustainable Palm Oil, an international not-for-profit organization focused on ensuring the ingredient is sourced responsibly. The snacks and cookie manufacturer has also taken a firm stance against collaborating with palm oil suppliers that engage in deforestation practices.
RAN is not the only organization monitoring companies’ commitments to sustainable palm oil sourcing. Last year, Greenpeace released a scorecard evaluating which companies were making headway toward their goals. Only Nestlé and Ferrero received an “on track” rating.
Moreover, further sustainability developments are on the horizon. Last year, several food companies severed ties with IOI Loders Croklaan, a Malaysia-based palm oil manufacturer whose anti-deforestation policies were deemed inadequate. In September, New York-based Bunge, a leader in ingredients and oils, announced its acquisition of a 70% stake in the company, pledging enhanced sustainability and traceability measures in its announcement.
It is improbable that RAN and similar organizations will cease their pressure on food companies to refrain from sourcing palm oil from threatened habitats like those in Sumatra. The critical question for manufacturers is whether it is worth risking negative publicity by continuing to source palm oil from such regions when alternatives exist. Ultimately, consumers will determine the fate of palm oil in their food, especially as they become more aware of potentially problematic ingredients.
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