While palm oil may not be hold a prominent position in most Americans’ kitchen culinary selection, globally it is a fast-growing behemoth. Since 1990, palm oil consumption has quintupled into a $5 billion-a-year industry, and the World Bank expects that number to double by 2020 in large part due to rising consumption in China and India.
Palm oil, the world’s most-used cooking oil, is especially popular in developing countries, but even in the European Union it accounts for 25 percent of edible oil consumption. About 50 million metric tons of the oil, which is used in processed foods, cosmetics, and cleaning agents as well as for cooking, were produced last year. Comparatively, according to the Global Land Project (GLP), only about 2.9 million tons of olive oil were produced. Palm oil now accounts for approximately 32 percent of the global vegetable oil production, soybean oil is second with 25 percent, and rapeseed oil third with 15 percent.
40 percent of the Earth’s land surface is used for agriculture, according to a 2012 GLP report called, “Contemporary Land-Use Transitions: The Global Oil Palm Expansion.” Agricultural land-use changes can have a major impact on freshwater availability, biological diversity, and carbon emissions. According to the GLP report, palm oil is one of the few agricultural crops to accelerate in importance in recent decades when it comes to land use. A major reason for the surge in palm oil production is that it is cheap to produce. In 2009 it cost an average of $200 less per ton to produce than other major oils.
“During the past few decades, the oil palm has become one of the most rapidly expanding equatorial crops in the world,” the report states. “Oil palms are now grown in 43 countries and their total cultivated area accounts for nearly one-tenth of the world’s permanent cropland.”
For those concerned about the climate, this is a big deal. Palm oil growth has caused major deforestation in Malaysia and Indonesia, where more than half of the crop’s expansion since 1990 has taken place. Not only can the expansion lead to the loss of forestland, which acts as a carbon sink, but it can also uproot carbon-rich peatlands, thus releasing large amounts of carbon into the atmosphere.
Environmentalist and human rights groups have been pressuring palm oil producers to clean up their act for some time. A few companies, including Nestlé, have pledged to use more sustainable palm oil practices and avoid harming old-growth forests. But on Thursday the biggest development yet took place when Wilmar, the world’s largest palm oil company, signed a landmark policy committing it to eliminating deforestation from its supply chain, among other things.
The new policy is the result of hard-fought campaigns targeting Wilmar for damage caused by the plantations it owns as well as third party suppliers. The commitment also applies to company subsidiaries, which when combined account for processing or trading nearly half of the $5 billion-a-year industry.
“If Wilmar is genuine in its commitments to deforestation-free, peat-free, exploitation-free palm oil, this could be a game-changer for the industry,” Sharon Smith, palm oil campaign manager for the Union of Concerned Scientists, told Reuters.
Smith also noted that in a Newsweek ranking last year of the environmental performance of the world’s 500 biggest companies Wilmar came in last.
“The announcement represents a vital new approach for Wilmar International, which stands astride the global palm oil industry through its control of 45 percent of palm oil trade, and is a significant player in other commodities like sugar and soybeans,” Climate Advisers and the Forest Trust said in a statement. “The announcement sets a responsible path forward for one of the most environmentally intensive commodities on earth.”
The policy has three major areas: deforestation, development of peatlands, and human rights. The policy says Wilmar will stop using palm oil that is produced at the expense of high carbon stock forests or high conservation value areas, and will “progressively reduce greenhouse gas emissions on existing plantations.”
These are major changes, especially considering just last year the U.S. arm of Wilmar International was openly arguing with an EPA analysis that found that palm oils don’t have a low enough GHG emissions lifecycle to be included in the renewable transportation fuels mandate.
The conservative American Legislative Exchange Council (ALEC), which has been waging a war on clean energy, criticized the EPA’s findings at the time, stating that, “The Environmental Protection Agency’s decision to restrict the trade of tropical palm oil marks an abandonment of free trade principles that have been so beneficial to so many.”
“It is a disturbing development to see a politically motivated group like ALEC join forces with the shadowy palm oil lobby from Malaysia and Indonesia as well as with huge agribusiness companies Cargill and Wilmar to pressure the EPA to overturn what is supposed to be a science-based decision made in the best interests of the American people,” Laurel Sutherlin with the Rainforest Action Network said at the time.
Environmental groups are lining up to praise Wilmar’s recent announcements. If the company follows through with these commitments it could make a major difference in the effort to reduce GHG emissions relating to land use changes.