About Palm Oil

What is palm oil?

  • Palm oil is the most produced and traded vegetable oil in the world, accounting for 40 percent of all vegetable oils traded internationally. Palm oil is in dozens of products around your house, from Girl Scout cookies and sliced bread to lipstick and detergent.
  • Palm oil is also the most efficient oil to grow – some estimate that it can produce ten times more fruit than other vegetable oil crops.
  • Palm oil is everywhere, and Indonesia is at the center of the industry. Indonesia is the largest producer and exporter of palm oil worldwide, bringing in $19 billion a year in exports. And worldwide demand for palm oil is only on the rise. 

What is sustainable palm oil?

  • Sustainable palm oil respects the natural environment and the local communities at all phases of production.  In particular, sustainable palm oil production includes:
    • Negotiating and collaborating in good faith between companies and communities during land acquisition and land development
    • No clearing of high value forests
    • No planting on peatland
    • No use of fire for land preparation
    • Including small farmers into the supply chain and facilitating their compliance with sustainability principles articulated by companies.  
  • For more information on examples of company sustainability commitments, please see Wilmar and Golden Agri Resources Forest Conservation Policies.  
Default image, no image supplied by the user.

Environmental Impact

  • Palm oil is responsible for large-scale deforestation across Indonesia. Scientists predict that all of Indonesia’s forests will disappear completely in 20 years if we don’t stop deforestation.
  • As more and more forest is converted to palm oil, millions of tons of carbon and other greenhouse gases are released into the atmosphere. Indonesia is now the fifth largest greenhouse gas emitter in the world.
  • When palm oil plantations are built in rainforests, they destroy some of the most diverse ecosystems in the world and the habitat for already endangered species, such as the Sumatran orangutan, rhinoceros, tiger, and elephant.  Furthermore, thousands of orangutans are directly killed, maimed or orphaned in the process.
  • The slash-and-burn approach to clearing forests for palm oil plantations is also causing devastating fires and toxic haze that spreads as far as Singapore and Malaysia, crippling Indonesia’s economy and endangering people’s health.   A recent World Bank analysis shows that the 2015 fires cost Indonesia $16.1 billion in just 5 months – that’s twice the cost of reconstructing from the 2004 Indian Ocean tsunami. 
Default image, no image supplied by the user.

As international palm oil buyers demand sustainable products, Indonesia must adopt responsible forestry practices to stay competitive.

In 2015, European countries committed to achieve 100 percent sustainable palm oil in Europe by 2020. Europe is the second largest global import market for palm oil and home to some of the world’s biggest brands and companies. Many U.S. food companies and retailers have also committed to source 100 percent certified sustainable palm oil. 

Independent smallholder farmers are critical.

There are over three million independent smallholder palm oil farmers in Indonesia selling to local mills, accounting for more than a third of Indonesia’s total palm oil production. The palm oil sector provides a livelihood for approximately 16 million Indonesians through direct and indirect employment. Around 61 cities and small towns have developed from and live off of the sector.