The Palmoil-Problem

What is palmoil?

Palm oil and palm kernel oil are vegetable oils obtained from the flesh of the fruits of the oil palm or from the palm kernel. Palm oil is the most cultivated vegetable oil in the world, with a market share of over 30%, ahead of soybean oil. World production of palm oil has risen in recent years, in some cases by more than 15 % per year. In 2015, about 60 million tons of palm oil were produced worldwide. In comparison, in 2001 the figure was 25.6 million tons.

The most important cultivating countries for oil palm plantations are Malaysia and Indonesia, which together account for over 85% of world production. Indonesia alone has increased its production by 66% since 2002/03 and overtook the market leader Malaysia in 2005/06. The areas under cultivation in Malaysia and Indonesia have increased tenfold since 1990. The trend is rising. The total palm oil plantations in Indonesia currently amount to a good 8 million hectares. And they are to be expanded to 13 million by 2020 and 20 million by 2025.

Palm oil is used worldwide primarily in the food industry (mainly in confectionery and finished products), but also in hygiene and cleaning products, chemicals and in energy production.


Why is palm oil used?

The oil is popular primarily because of its high yield. The yield of a hectare of palm oil plantation is about 3 times as high as that of rapeseed oil and 7 times as high as the yield of soya plantations. This also makes palm oil the cheapest oil in the world. The oil is mainly used in the food industry because of its creamy texture and heat resistance.


Palmoil consumption

A large proportion of palm oil is consumed in Asian countries, especially in India (22%) and China (12%). But also Malaysia and Indonesia itself, as well as Pakistan and Thailand use quite high quantities of the oil. And yet the European Union is the second largest market for palm oil, accounting for around 14% of global consumption.

According to estimations by the Forum for Sustainable Palm Oil (FONAP), palm oil consumption in Europe is primarily driven by energy production (biodiesel), which, according to current estimates, accounts for almost 50% of palm oil consumption in Europe. In other markets, such as food production, palm oil consumption has been declining for several years.


Impact on humans and nature

Although the oil palm has the highest productivity of oil in the world, OUHL and many other nature conservation organisations worldwide are very critical of it. The main reason for this is not the plant itself, but the way it is farmed.



Huge palm oil plantations characterize many regions and areas of Indonesia and Malaysia today. In these monocultures animals are generally not tolerated, orangutans and other animals, for example, are shot down to secure the lives of people in their proximity.

Just a few years ago, these huge cleared areas were rainforests with a great biodiversity that provided a habitat for many animals and plants. Since the oil palm can only thrive in a tropical climate, these rainforests are in direct competition with palm oil production and are therefore being cleared more and more. As a result, many animals are no longer able to feed themselves sufficiently and, driven by hunger, approach the people dangerously, where they are often classified as dangerous and killed.


Fire clearance

Although the climate and the rainforests of Indonesia and Malaysia are generally not susceptible to forest fires, devastating forest fires occur again and again in both countries. These are generally due to attempts to clear rainforests in a controlled manner in order to use them as cultivated areas for palm oil. In these fires, peat soils in particular release their stored carbon dioxide in large quantities. According to NASA experts, in the period from August to October 2015 alone, up to 600 million tons of greenhouse gases were released into the Earth's atmosphere by these forest fires, which corresponds approximately to the annual emission of the Federal Republic of Germany. With three billion tons, Indonesia is now the world's third largest producer of greenhouse gases behind the USA and China!


Human rights abuses

Particularly in Indonesia, the cultivation of palm oil is often accompanied by poor working conditions, social injustice, land conflicts and massive human rights violations. It often affects indigenous peoples who are deprived of their livelihoods and displaced from their lands. Although the majority of concessions are based on social criteria, they are hardly never 100% adhered to. Plantation workers often live with their families on the palm oil plantations, frequently without contact to life outside the plantation. It is therefore all the more important to give the children living there access to education and to pay the workers minimum wages.

According to reports by the Indonesian Human Rights Commission Komnas HAM, around 30 percent of human rights violations in their country can be directly associated with the cultivation of palm oil.



Due to the palm oil industry, roads lead further and further into the rainforests, which are otherwise difficult to access. These paths also enable poachers to easily enter the habitats of many wild animals and make it easier for them to carry out their illegal hunting activities.


Health impacts of palmoil

Almost half of palm oil consists of saturated fatty acids, which can cause high cholesterol and heart disease and are known as "fatteners". Palm kernel oil, which is often used for cocoa icing, ice confectionery and caramel, even consists of 80 percent saturated fatty acids.

Palm oil also contains fatty acid esters (3 -MCPD and glycidol fatty acid esters), which are considered carcinogenic. The concentrations of harmful substances are particularly high in refined palm oil, a component of baby milk. The popular nut nougat and chocolate bread spreads often also contain a great deal of palm oil. Children are particularly at risk because their body weight is low in relation to the amount of harmful substances they ingest.



In order to make the production of palm oil and palm kernel oil more sustainable, various certification schemes have been developed in recent years. This certification of palm oil can be a powerful lever to mitigate the environmental and social problems caused by palm oil production, such as the displacement of indigenous peoples or the deforestation of rainforests. Certification offers an opportunity to formulate and solve these problems.


Roundtable on sustainable palmoil

The Roundtable on sustainable palmoil ( hereafter RSPO) is by far the largest certification body for palm oil. It was founded in 2004 on the initiative of the WWF with the aim of developing a sustainable standard for palm oil and to bundle and further improve the commitment of the various interest groups. These interest groups come from seven different sectors of the palm oil industry: palm oil producers, the palm oil processing industry and traders, manufacturers of consumer goods, retailers, banks and investors as well as non-governmental organisations with an environmental and social background.

Currently, almost 20% of the palm oil produced worldwide is certified as sustainable by the RSPO. To be certified as sustainable by the RSPO, criteria such as compliance with local, national and ratified international laws, environmental standards for soil, water and waste management and pesticide use must be met. Furthermore, no new plantation established after November 2005 may have been established in areas of primary forest or forest with high conservation value and the rights of the local population, as well as social standards in working conditions, and the prohibition of child labor and discrimination must be observed. Last but not least, the RSPO standards prohibit any fire clearance.


Despite the prominent founder and the high number of members, the RSPO is today always in discredit to do Greenwashing. In 2011, for example, 256 organisations worldwide signed a joint declaration accusing the RSPO of eyewashing and supporting massive deforestation and abuses against indigenous peoples.

RSPO standards are relatively low and allow companies with relatively low shares of sustainable palm oil in their own production to present themselves as sustainable. Furthermore, the RSPO's method of Book&Claim is under strong criticism. This is comparable to a market for certificates, similar to emissions certificates. Here, food producers can purchase certificates from sustainable producers who have sold their palm oil on the normal market. These practices allow companies to certify palm oil grown in a non-sustainable way as sustainable.

Furthermore, the RSPO criteria are generally considered too lax. For example, only forests worthy of special protection are considered to be protected. In general, this applies above all to primary rainforests. Secondary forests may therefore continue to be deforested, even if they represent a habitat for many species. To qualify as secondary forests, it is sufficient that forest fires or deforestation have prevailed in recent decades and that parts of them have been replanted.

Above all, however, the RSPO is repeatedly accused of doing nothing about the constant deforestation. This accusation must, however, be somewhat revised. In fact, for a long time the RSPO did not take action against violations of its own criteria. This is mainly due to the fact that the RSPO has hardly any means of exerting pressure other than the expulsion of a member.

In recent years, however, the RSPO has shown its teeth from time to time, and has taken tougher action every now and then. For example, the palm oil giants Golden Agri Resources and the IOI Group have been excluded for repeated violations. These activities are a small glimmer of hope that the certification of the RSPO can at some point be a serious criterion for partially sustainable palm oil.

Other certification schemes

In addition to the RSPO, there are also some much smaller certification models. Of particular interest here is the International Sustainability and Carbon Certification (ISCC), since the standard of this certification is the guideline for the European biofuel policy.

The ISCC standard was developed in 2006 with the aim of establishing ecological and social sustainability criteria for all types of agricultural raw materials. Among other things, compliance with the sustainability requirements of the European Union (Renewable Energies Directive - EU RED) in the area of biomass and energy is checked with the aid of the International Sustainability and Carbon Certification Standard (ISCC). In addition, the standard can also be used for the certification of sustainable palm (nuclear) oil (ISCC PLUS).

The following six principles must be observed for certification by ISCC PLUS:

  • Protection and conservation of areas with high biodiversity or high carbon storage capacity
  • Agricultural production in compliance with good agricultural practices. This includes protecting soil fertility, water quality and quantity, reducing emissions and minimising the use of plant protection products.
  • Safe working conditions through training, the use of protective clothing and adequate and rapid assistance in the event of accidents.
  • Respect human, labour and land rights and ensure responsible working conditions, health, safety and welfare of workers and indigenous peoples
  • Compliance with regional and national legislation and relevant international agreements
  • Adherence to good management

Gleam of hope

A change of mentality in the banks

Traditional banks have been instrumental in financing palm oil plantations, whether legal or illegal. In mid-2017, however, the first two banks, ING Paribas and HSBC, revised their internal regulations for financing palm oil. We hope that this trend will also spread to other banks, so that the expansion of the plantations, which currently seems almost impossible to prevent, will lead to the least possible damage to nature.



After many environmental organisations have long demanded that biodiesel be abolished, the European Parliament officially acknowledged on 17 January 2018 that biofuel is by no means as sustainable as expected and thus voted for palm oil not to be put in the tank by 2021 at the latest. This decision is a major blow for the palm oil industry and has a direct impact on the demand and profitability of palm oil.


Companies aim at using more sustainable palm oil

More and more companies in the food production industry are giving in under pressure from consumers and are setting themselves the internal goal of using only 100% sustainable palm oil, which can to 100% be traced back to its source. Most of these companies had set themselves the target of meeting these criteria by 2015. Unfortunately, the reality is that too many companies still use non-certified palm oil too often in their production chain. More details can be found on the annual Palmoil Scorecard from Greenpeace or the WWF.


Can stricter certification criteria lead to sustainable palm oil?

Although many steps are being taken towards sustainable palm oil, it must be noted that even the plantations that were not grown on former forests cannot really be considered sustainable. The main reason is the monocultures. In contrast to other trees, the oil palm hardly loses any foliage. Thus, the soil hardly receives any new nutrients and the palm can only thrive at all through expensive intensive fertilization. Furthermore, the roots of the oil palm do not reach particularly deep, which leads to the drying out of the soil in a country that experiences a longer dry season after longer rainy seasons.

The rather superficial roots also pose a further danger, namely that of landslides: after intensive rainfall, landslides occur again and again in palm oil plantations growing on slopes. These affect increasingly the houses of the local farmers, who do not withstand the force of these landslides and it unfortunately again and again leads to casualties.

Since there is an abundant variety of oils, palm oil can be replaced without major problems in the kitchen. However, in order to avoid a worldwide replacement of palm oil by soybean oil, for which even more rainforests would be cleared, the consumption and sustainability habits of the people should change.