Palm oil—can we enjoy it responsibly?

The slippery question of whether to ban the controversial commodity, or work with the producers. Here’s why the latter makes more sense, writes Ekaterina Bessonova of the Stockholm Environment Institute.

“Palm oil is part of our poverty-reduction strategy. It directly contributes to employment and promotes economic growth in rural areas, enabling poor communities to access health and education.” This statement by Bagas Hapsoro, Ambassador of Indonesia to Sweden, at an event about agroforestry and sustainability in Stockholm last month, left environmentalists in the room puzzled and muttering.

What about the rampant tropical deforestation to make way for palm oil plantations, and the enormous climate impact? What about the forest burning that shrouds large parts of Southeast Asia in a lethal haze? What about the indigenous people forced from their homes and the wildlife lost?

Palm oil is fuelling a heated debate. On one side, many environmental NGOs are urging a total ban on palm oil. They argue that the environmental destruction and human rights abuse brought by the rapid development of the palm oil industry is too great, and regard attempts to promote sustainable production, like the industry-led Roundtable on Sustainable Palm Oil (RSPO) certification scheme, as little more than greenwashing.

Their advocacy campaigns have clocked up some significant successes; for example, the European Union, the world’s top consumer of palm oil, agreed to phase out its use in transport biofuels from 2030.

On the other side, businesses and governments in palm oil producing and trading countries claim that boycotting palm oil is not a solution: it will only result in suppliers targeting less fussy markets, like India and China. There is a point of view that the EU ban on palm oil is in fact a protectionist measure aimed at boosting biofuel feedstocks produced in the EU, such as rapeseed. At the same time, they point out that palm oil is now so ubiquitous in food and cosmetics that it simply can’t be phased out. According to actors on this side of the barricades making existing palm oil supply chains more sustainable is the only way forward.

Rocio A. Diaz-Chavez, deputy centre director of Stockholm Environment Institute – Africa, and one of the scientists behind the SEI Initiative on Governing Bioeconomy Pathways, has been studying palm oil for several years. She is only too aware that “Environmental destruction, labour rights abuse and risks to food security as well as losses to the tourist sector brought on by the escalated global appetite for palm oil are impossible to deny.” 

But Rocio is no advocate for a ban. She notes that oil palm is regarded as a wonder crop for a number of good reasons. For one thing, it grows fast and can be harvested several times a year. For another, it has the highest yields per area of any oil crop. The oils extracted from palm fruit and from palm kernels have different physical characteristics, which makes palm oil highly versatile. All these qualities make the crop very productive and profitable for the farmers, even with the middlemen taking their – unfair – share. 

Moreover, the waste from palm oil mills can be used to generate clean energy and fuels, as well as fertiliser. According to Fumi Harahap, a researcher at KTH Royal Institute of Technology, the waste from oil palm mills in Sumatra alone could satisfy up to 50 per cent of Indonesia’s national bioenergy target. According to Gustav Melin, managing director at Svebio, palm oil electricity is already working on a smaller than the island of Sumatra scale at Kekayan Palm Oil Mill in Malaysia. Here palm oil wastes are fermented into biogas which is then used in three 1,200 kW generators, meeting the electricity needs of the entire mill complex and producing a surplus of 2,000 kW that is exported to the national grid.

At the same time, some major palm oil producers are looking at how to produce palm oil more sustainably. Golden-Agri Resources (GAR), one of the major players in palm oil production, has been experimenting with so-called mosaic landscapes, combining conservation, farming and industrial zoning as well as crop-livestock integration. However, the company is still to bring these initiatives to scale, so they are not profitable yet, according to Ian Suwarganada, head of sustainability relations at GAR. “The big bottleneck is resources; most of the palm oil plantations are operated by smallholders and rolling out new technologies to several millions of farmers is very costly,” says Suwarganada.

Another promising attempt to produce oil palm in a sustainable way comes from Colombia, the fourth biggest palm oil producer in the world. “Colombia’s land use model is completely different from the one employed in Southeast Asia, as the country mainly cultivates palm oil on grasslands formerly used for livestock, or already transformed agricultural and forested areas, avoiding deforestation altogether. The country also invests in research and development of palm oil-based products and has established institutions to regulate palm oil supply chains with sustainability as a priority,” says Diaz-Chavez.

So, to ban or not to ban? Diaz-Chavez, for one, is certain that banning isn’t the way forward. Instead, she suggests strict limits on the amount of land that can be dedicated to palm oil production, employing the best available technologies and knowledge to boost yields in a sustainable way, while safeguarding forests and ensuring there is enough land for growing food.

With palm oil, like many other sustainability dilemmas, the answer is not always black and white when you take a closer look. Yes, we can’t turn back the clock and restart palm oil production in more sustainable ways with the knowledge we have now – but we can try to do it better from here on in.

Ekaterina Bessonova is communications officer at the Stockholm Environment Institute

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