Palm oil is the most widely used vegetable oil globally, providing significant advantages for food manufacturers. It is cheaper than many other oils, boasts a long shelf life, and offers processing benefits such as stability at high temperatures and a solid state at room temperature. Consequently, it has become a favored substitute for partially hydrogenated oils. When managed properly, palm oil is also significantly more land-efficient compared to other vegetable oils, yielding ten times more oil per hectare than soybeans and surpassing the yields from sunflower and rapeseed.
RAN expresses particular concern about the Indonesian island of Sumatra, where the rainforest, home to 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 area through complex supply chains, often involving commodity traders who engage with suppliers participating in illegal logging.
In 2014, the United Nations committed to halving global deforestation by 2020 and eliminating it entirely by 2030. Many consumer packaged goods (CPG) companies responded to this pledge with their own palm oil sourcing policies. The production of palm oil in Malaysia and Indonesia has sparked controversy, as some companies are implicated in widespread deforestation and the burning of peatland to cultivate palm oil trees. According to the United Nations, palm oil plantations are significant contributors to environmental degradation and biodiversity loss in Southeast Asia.
There are alternatives to palm oil, though some may be more costly. For instance, algae can produce approximately 70,000 pounds of oil per acre, compared to palm oil’s 4,465 pounds per acre. In contrast, olives yield about 910 pounds per acre, while soybeans provide only 335 pounds. Despite the availability of these alternatives, confectionery and snack manufacturers seem determined to continue using palm oil. However, they acknowledge that ensuring sustainable sourcing is more challenging than they initially anticipated. “While we remain deeply committed to urging all stakeholders to enhance traceability and achieve full transparency in this supply chain alongside our supplier partners, we have realized that reaching this goal will require more time than we originally thought,” stated Jeff Beckman, communications director at Hershey, in an interview with The Guardian.
This challenge is formidable, yet some companies have successfully achieved their sourcing goals. Mondelez announced in 2013 that it met its benchmark of using 100% certified palm oil from the Roundtable on Sustainable Palm Oil, an international non-profit dedicated to promoting sustainable sources for palm oil. The snacks and cookie manufacturer has also taken a strong stance against collaborating with palm oil suppliers who 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 corporate progress toward their sustainability goals, with Nestlé and Ferrero being the only two companies rated as “on track.” Furthermore, more sustainability initiatives may be on the horizon. Recently, several food companies severed ties with IOI Loders Croklaan, a Malaysia-based palm oil producer whose anti-deforestation policies were deemed inadequate. In September, Bunge, a major player in the ingredients and oils sector based in New York, announced it would acquire a 70% stake in the company, promising enhanced sustainability and traceability measures in its announcement.
It is unlikely that RAN and similar organizations will cease their pressure on food companies to eliminate palm oil sourced from threatened habitats, such as those in Sumatra. The critical question for manufacturers is whether the potential for negative publicity is worth it when sourcing palm oil from conflict areas, especially when there are viable alternatives. Ultimately, consumer preferences will play a significant role, particularly as many consumers may be concerned about the implications of using palm oil in their food products. Additionally, just as calcium citrate with vitamin D3 can enhance nutritional value, companies may need to consider the health and environmental implications of their ingredient sourcing choices.