Palm Oil: the world’s environmental scapegoat

By Matthew Seet, GLOBUS Contributor

Even if you’ve never heard of palm oil, the chances are that it’s a big part part of your life. In fact, a number of things that we eat and use daily contains palm oil: peanut butter, ice cream, lipstick, soap, bread, and chocolate – just to name a few.  

 But if you have heard of Palm Oil, you’ve probably also heard about how bad it is for the environment. Nowadays, it is essentially a byword for evil, and if you’re like me, you’ve probably had some false beliefs about palm oil. But, hopefully, after reading this, you’ll understand the issue of Palm Oil more – and what we can do about it.  

 A very short introduction to palm oil 

Palm oil is cultivated from a specific type of West African palm tree (Elaeis guineensis), which was first brought to Southeast Asia in the 19th century. The crop thrives in the tropics, and became a popular cash crop in the region due to its long life (a palm oil tree can produce palm oil for up to 30 years) and it’s high demand in manufacturing; palm oil is used in approximately 50% of the products that we commonly use, from biofuels to food items

 Yet, despite its prevalence, any two-bit environmentalist will tell you “I don’t buy anything with palm oil”, but is there anything inherently bad about palm oil? The answer is no. Palm oil is the most efficient vegetable oil in existence in terms of yield per acre, with a theoretical yield of 18.5 tonnes per hectare, per year; in comparison, soybeans only yield 0.4 tonnes. 

 So why is the world up in arms when it comes to palm oil? The answer is simple – deforestation. The recent fires in Brazil were partly caused by the demand for more farming land used to grow palms, and Southeast Asia is plagued by haze from Indonesia and Malaysia when farmers burn peatland to make room for plantations. All in all, studies estimate that 45% of palm oil plantations in Southeast Asia sit on deforested land.

 Why can’t we just ban it?   

When I was working in Indonesia (which happens to be the world’s largest producer of palm oil) last summer, I attended a press conference in Jakarta held by the EU, who had recently imposed higher duties on Indonesian palm oil-based biodiesel and also announced that they would phase out palm oil altogether by 2023. As the EU delegation struggled with interrogation by the Indonesian press, they kept repeating one thing: environmental protection.  

 The EU claims that these measures are aimed at incentivising greater environmental protection standards, but I believe this is a short-sighted and somewhat draconian policy, which represents a microcosm of the larger problem of Western perceptions about palm oil. Banning palm oil seems to be the latest fashion among individuals and businesses alike. I’ve seen more ‘palm-oil free’ products on the shelves as the years go by. However, blanket policies rarely work, and this is no exception.  

 The ones who will invariably suffer from a blanket ban the most are smallholder farmers. Indonesia alone has 4 million smallholder farmers cultivating palm oil, employing more than 7 million workers throughout its supply chain, and it’s not hard to see why so many people are in the industry; palm oil is a ludicrously profitable cash crop, worth €1687 per hectare per year – in the UK, the average is €1448 per hectare per year. A comparative study with rice crops found that palm oil has lower labour requirements, high return on investment and more opportunities for partnerships with big companies, which translates into more jobs and higher incomes for rural communities.  

 Taking opportunities such as these away from communities could be devastating, especially in Indonesia. Often outside the reach of government support, palm oil is one of the only ways for people in remote regions to make a living and develop economically. I don’t see how it would be right to make these communities suffer. 

 The Environment Argument

Even when it comes to environmental protection (the sole reason why the EU was purportedly banning palm oil in the first place) the evidence falls short of the reasoning. While a ban on palm oil reduces the EU’s consumption of palm oil, this doesn’t automatically make the world a better place.  

 World trade doesn’t revolve around the EU. Reduced palm oil exports to the EU only mean that countries like Indonesia and Malaysia must turn to other big importers like China and India, and there is no evidence that China and India are concerned with sourcing their palm oil sustainably. This could set back Malaysian and Indonesian efforts to source palm oil more sustainably, through their work in the Roundtable on Sustainable Palm Oil (RSPO) certification.  

 Furthermore, the EU has simultaneously committed to having biofuel power 10% of its transportation by 2020. With a ban on palm oil, EU biofuel producers will therefore need to make their fuels from existing food crops like soybean and rapeseed, which, as we have already established, is extremely land-inefficient compared to palm oil. Furthermore, using food crops for biofuels will not only utilise more land but also increase global food prices.   

 The missing link between deforestation and palm oil  

As with most issues in developing countries, the root of the problem is poverty. Farmers adopt unsustainable practices because they are low-cost and have been common practice for decades. Thus, breaking the poverty-based link between deforestation and palm oil would put the industry on a good track for reducing the deforestation that plagues Southeast Asia’s rainforests.  

 Importing countries, like the EU, can use their leverage to nudge the industry towards more sustainable production. This is where multilateral cooperation comes into play. In 2003, the EU cooperated with timber-producing countries to implement the FLEGT certification to reduce the amount of illegal logging in importing countries. A similar policy could be implemented with RSPO. 

 A panel regression study indicated that RSPO certification reduces deforestation significantly (~33%), but with only 20% of the world’s palm oil producers being certified, there is significant room for improvement. However, this also implies that certification should be strengthened and made a compulsory practice – currently, the RSPO and other certifications are only voluntary.  

 Conversely, the governments of exporting countries like Indonesia and Malaysia should ensure that their smallholder farmers can afford certification. I believe that governments should be helping their farmers bear the burden of certification, especially if it means that farmers must incur higher costs as a result.  

 What you can do about it  

You may very well believe ‘that’s all well and good, but way above my pay grade’. And you’d be right. Most people aren’t in a position to be influencing government policy. However, what you can do,  is to change your habits and adopt more sustainable practices in your own life. 

 Ethical consumerism might seem like a cliché, but it goes a long way in changing mindsets and attitudes. If we, as consumers, demand that companies source their products sustainably, we then have the power to influence how companies source their materials. This applies not just to palm oil, but other products as well. You might think that companies don’t care about you, but trust me, they do. Otherwise, they wouldn’t invest millions in market research and focus groups.  

The answer isn’t banning palm oil. Changing perceptions is difficult, and I don’t expect it to happen overnight. The root of the problem runs deeper than that. We need to realise that the impetus doesn’t lie with the farmers, governments or even the manufacturers. It lies with our demand, and only by changing that can we influence the way palm oil is produced, and in a few years, I hope to see the ‘palm oil-free’ labels changed to ‘sustainably-sourced palm oil’. 

Header Image by Eva Blue via Unsplash

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