Are there really any alternatives to palm oil?

Over the past decade, the hard work of some of the $40bn global palm oil sector’s leading players has meant that many of the industry’s largest companies now pledge not to destroy forests and to protect sensitive peatland areas. 

Despite the progress, undoubtedly palm oil supply chains retain significant levels of deforestation risk. And with more alternative oils available and suitable for use in a variety of products, it is hardly surprising that some retailers are considering eliminating palm oil altogether.

But, is boycotting the world’s most productive and versatile vegetable oil the right thing to do? 

 Consumer choice

The UK supermarket chain Iceland says it “worked tirelessly” and “invested millions of pounds” to remove palm oil from its own-label food by the end of 2018. It was a move that saw the business reformulate more than 130 of its original products and launch 300 new, palm oil-free lines, reducing overall demand for the ingredient by more than 500 tonnes a year. Iceland managing director Richard Walker fronted the chain’s move, stating his belief that palm oil could not be sustainable and that consumers should be given the choice not to buy it.

Walker refers to tropical forests as “the crown jewels” of the natural world, and characterises Iceland’s intent as to increase consumer awareness and to encourage the palm oil sector to move faster in developing sustainable sources of supply.   

However, illustrating the challenges involved in eliminating palm oil entirely, the chain was caught out in early 2019 when it became clear that for 17 product lines Iceland branding had simply been removed from packaging when a viable alternative to palm oil had not been formulated in time to meet its “no palm by end of 2018” pledge.  

Similar “no palm oil” promises have been made by other retailers. For example, the department store Selfridges recently announced that all 280 of its own-brand products do not now include palm oil, switching instead to alternatives. 

 More deforestation? 

However, according to 2018’s IUCN International report, switching to other vegetable oils – whether soy, rapeseed, sunflower seed or others – may very well result in more primary forests and other ecosystems being converted into agricultural land, not less. 

Greenpeace has been vocal in campaigning about palm oil, but does recognise that when grown in vast quantities all alternative oils have serious environmental problems, including rainforest destruction. Soy of course has significant environmental impacts, not least through expansion in South America, most notably in the biodiverse Brazilian cerrado grass and scrub lands, significant parts of which have been cleared for soy plantation. 

And whatever environmental impacts, there are also question marks over the ability for palm oil alternatives to scale-up and sustain large sectors.

Palm oil is a land-efficient crop. Over 1m tonnes of palm oil can be produced on just 250,000 hectares of land. Global Canopy estimates suggest that meeting the growing global demand for vegetable oil – said to grow from around 204m tonnes in 2019 to 230m tonnes by 2027 – with soy would require over five times more land than producing the same amount of palm oil. And that’s even when the best yields are achieved. 

Rape and sunflower plants can be cultivated in regions that do not face the threat of tropical deforestation in the same way that palm does. But expansion of plantations could harm native ecosystems and result in water use challenges, as well as the many other issues associated with intensive farming. 

Another alternative, heterotrophic algal oil, requires large quantities of sugar for production. Right now, just 4% of all of the world’s cane sugar is certified as sustainable under Bonsucro.

Among other approaches, startup biotech business C16 Bioscience is developing a method of brewing a synthetic alternative to palm oil using microbes, though the viability at scale of this process is as yet unclear. 

 LCA answers

A recent lifecycle assessment analysis by United Plantations Berhad in Indonesia, which examined different oils, shows that palm oil performs better than all other oils for all environmental impacts. In some categories, such as “ozone layer depletion” and “acidification”, palm oil has less than half the impact on the environment than rapeseed and sunflower oils, according to the study.

In terms of scale, of the expected global production of vegetable oil by the end of 2019, around 40% (77m tonnes) of this will come from palm and palm kernel, and approximately 30% (around 56m tonnes) from soy beans. Meanwhile, just 26.3m tonnes of oil from rapeseed (canola) (around 12% of total vegetable oil) and 19.4m tonnes of sunflower oil (just under 10%) are currently produced globally. 

The majority (70%) of global soy production is, of course, used for animal feed rather than oil. So, combined with the small volumes of other palm oil alternatives being produced, a monumental scale-up would be required if consumer goods brands are to eliminate palm oil from products altogether. 

 Demand-side challenges

Anita Neville, senior vice president, group corporate communications, at the Singaporean palm oil business Golden Agri-Resources, argues that “no palm oil” commitments are an “abdication of responsibility” from brands.

All across the value chain – from producers and traders to manufacturers and retailers – companies have made profits based on unsustainable practices, she says. “The world has called out this behaviour, demanding that sustainable production be normalised. But this takes time and investment.”

Normalising sustainability also requires demand-side players to support the transformation through their purchasing power, Neville adds.

In fact, the supply of sustainable palm oil certified by the Roundtable on Sustainable Palm Oil currently outstrips demand, partly down to premium cost and lack of necessity for many companies to buy it, with large quantities sold on the uncertified open market instead. Corporate pledges, such as Nestlé’s ambition to source only sustainable commodities, including palm oil, by 2020, may change this (though Nestlé, of course, has had a complicated relationship with the RSPO).

Fay Richards,  communications manager for the RSPO, says that to incentivise and mainstream sustainable production practices, the downstream market “must commit to buy certified sustainable palm oil and support the growers”. 

While the RSPO certification system has had its detractors the body is clearly working hard to be at the heart of transforming the palm oil sector. Its recently updated and improved principles and criteria were generally welcomed and, the RSPO says, go beyond what any other major agricultural certification standard requires.

But to work effectively, the system needs more companies to commit to using it, rather than walking away from palm oil altogether. Richards argues that without pressure and demand for sustainable palm oil from brands in developed nations, “the likely outcome is more unsustainable palm oil”. While she accepts that increasing awareness of the issues facing the sector is important, “not engaging for lasting change in a supply chain is short-sighted”, she says. 

 Smallholder livelihoods 

Over 40% of all oil palm is cultivated by smallholders. In Indonesia and Malaysia, around 4.5 million people earn their living from palm oil production. A widespread abandonment of palm oil would force more consolidation of farm assets and smallholders to focus on other cash crops. And with income falling, governments would be faced with managing an economic transition in rural communities.   

For Neville, substituting palm oil with existing traditional crops is unlikely to have a huge impact, at least in the short term. “If you look at the players who have made a song and dance about their palm oil-free status, they have been relatively small volume players, and they had little-to-no track record of supporting certified palm oil.”

However, in the longer term, should negativity surrounding palm oil be sustained, perhaps a move to non-traditional substitutes, such as algal oils could be a game changer. But as with moving from palm to existing alternatives such as soy, this raises questions of whether there has been sufficient thought given to the potential risks or unintended consequences of such a move. 

But, for now, are there viable alternatives? Given the rampant demand for vegetable oils showing no sign of slowing down, and the current small volumes of alternative oils reaching market, palm oil is clearly here to stay. And in that case, the growing challenge for brands and retailers is how they can work with their supply chains to ensure that sustainable palm oil reaches the mass market, and quickly. 

 
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