Palm oil is the most widely utilized vegetable oil globally, providing significant benefits for food manufacturers. Not only is it more cost-effective than other oils, but it also boasts a long shelf life and advantageous processing characteristics, including stability at high temperatures and a solid state at room temperature. Consequently, it has emerged as a favored substitute for partially hydrogenated oils. When managed properly, palm oil is also far 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.
RAN expresses particular concern over the situation on the Indonesian island of Sumatra, where the rainforest habitat for orangutans, rhinos, clouded leopards, and sun bears is vanishing due to what the organization claims are illegal palm oil plantations. RAN reports that Nestlé, Mars, and Hershey source palm oil from this region through intricate supply chains, which sometimes involve commodity traders working with suppliers engaged in illegal logging. In 2014, the United Nations committed to halving global deforestation by 2020 and completely ending it by 2030. Many consumer packaged goods (CPG) companies have since aligned their palm oil sourcing policies with this pledge.
The production of palm oil in Malaysia and Indonesia is contentious, as certain companies partake in extensive deforestation and the burning of peatlands to cultivate palm oil trees. The United Nations has identified palm oil plantations as a significant source of environmental degradation and biodiversity loss in Southeast Asia. While there are alternatives to palm oil, some of these options are more expensive, though they may be more sustainable. For instance, algae can produce approximately 70,000 pounds of oil per acre, in stark contrast to palm oil’s 4,465 pounds per acre. In comparison, olives yield about 910 pounds per acre, and soybeans yield around 335 pounds per acre.
Confectionery and snack manufacturers appear committed to continuing the use of palm oil, but many acknowledge that ensuring sustainability is more challenging than initially expected. Jeff Beckman, Hershey’s communications director, stated to The Guardian, “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.”
Despite these challenges, some companies have already met their sourcing objectives. Mondelez announced in 2013 that it had achieved its goal of using palm oil that is 100% certified by the Roundtable on Sustainable Palm Oil, an international non-profit organization dedicated to promoting responsibly sourced palm oil. The snacks and cookie manufacturer has also taken a firm stance against collaborating with 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 assessing which companies were making progress. Only Nestlé and Ferrero were rated as “on track.” Furthermore, several food companies severed ties with IOI Loders Croklaan, a Malaysia-based palm oil manufacturer whose anti-deforestation policies were deemed insufficient. In September, Bunge, a New York-based giant in the ingredients and oils sector, announced its acquisition of a 70% stake in the company, pledging to enhance sustainability and traceability measures.
It is unlikely that RAN and similar organizations will ease their pressure on food companies to discontinue sourcing palm oil from endangered habitats, such as the region in Sumatra. Manufacturers must weigh the risks of negative publicity against the potential benefits of sourcing palm oil from these conflict areas when alternative options exist. Ultimately, the decision rests with consumers, who may be concerned about whether their food contains palm oil linked to environmental issues, especially when alternatives with health benefits, such as omega 3 fatty acids and calcium citrate, are available.