How Bad is the Palm Oil Industry For the Environment?

The palm oil industry has played a big role in our global economy, but as of recently – our newfound environmental and social challenges have raised concerns if this worldwide economically beneficial industry is good for the environment moving forward.

Often found in everyday products and helping to provide millions of jobs, the palm oil industry is continuing to grow – but should it? 

In this article, we’ll explain what the palm oil industry is, the pros and cons of the industry, why the palm oil industry is bad for the environment, and potential alternatives to the use of palm oil.

The palm oil industry refers to the production and distribution of palm oil, or an edible vegetable oil – often used in products for everyday consumption like pantry food items, toiletries, cleaning products, and even biofuels. 

Palm oil is predominantly used in food as a preservative in pantry items such as peanut butter, noodles, chocolate or other baked goods – but is also used in other household products like shampoo, soap, body or hand lotions, and toothpaste.

The palm oil industry works by:

1. Preparing Palm Oil to Be Produced – The majority of palm oil trees are planted in regions with year-round warm climates – such as Southeast Asian countries like Malaysia and Indonesia. In fact, Malaysia produced 18.45 million tonnes of palm oil in 2022 alone. 
2. Production in the Palm Industry –  Once the palm oil trees are planted, the fruits can be harvested and processed into palm oil – and the palm oil can then be placed into everyday household products such as pantry foods and cosmetics. 
3. Distribution – Palm oil isn’t usually distributed in its whole form, but rather concealed into various products used everyday – such as packaged bread or in your favorite cosmetics. 

💡 If you’re trying to avoid palm oil products when shopping, be sure to try and read the labels carefully – as palm oil can often be disguised under different names such as palm fruit oil, palm kernel, vegetable oil, sodium kernelate, and more.

The palm oil industry is controversial seeing as there are several pros and cons to the palm industry – with some of the benefits including being able to provide numerous jobs and prolong the shelf-life of various products, but the consequences include the environmental damage caused by the industry. 

The palm oil industry is essential for global trade and helping to boost the economies for countries with lower incomes – but the cons of the palm oil industry are beginning to raise concerns and cause stakeholders to reconsider if the potential setbacks in the long-term are worth the benefits palm oil provides.

Some of the pros of the palm oil industry include:

• Preserving the shelf-life of household products
• Providing millions of jobs 
• Helping to boost the economy in countries such as Malaysia, Indonesia, and Columbia

However, some of the consequences of the palm oil industry include:

• Harming biodiversity and air quality
• Enabling unfair working conditions and social injustices 
• Compromising current progress on the fight against climate change 

The palm oil industry is bad for the environment because it contributes to deforestation, compromised air quality, and excessive greenhouse gas emissions.

There are several ways in which palm oil industry creates a substantial negative impact on the environment:

• Biodiversity – The palm oil industry often requires vegetation to be torn down in order to plant new trees for palm oil, which can have a profound impact on the surrounding environment, wildlife, and overall biodiversity. Biodiversity has a direct effect on climate change, meaning that the palm oil industry indirectly exacerbates the negative effects of global warming.
• Air Pollution – Most relevant for residents in nearby areas where palm oil production is high, the palm oil industry plays a role in our current levels of air pollution – as burning vegetation releases particular matter into the atmosphere and can even cause unplanned wildfires. 
• Deforestation – The process required to create new palm oil plantations often results in the need to remove existing trees – especially those within existing tropical forests. This means that the palm industry contributes to deforestation, which in turn – can spur the loss of greater biodiversity and reduce the amount of carbon dioxide emissions being absorbed from the atmosphere. 
• Greenhouse Gas Emissions – Deforestation results in excessive carbon dioxide emissions, which further aggravates climate change and the amount of greenhouse gas emissions present in the surrounding atmosphere.

👉 The palm oil industry has not only had a negative impact on the environment, but on social issues – as the industry has accentuated issues with working rights such as human rights and various conflicts between surrounding communities and palm oil production sites. 

Given the negative environmental effects of palm oil, many presume that the automatic answer should be to stop producing palm oil entirely – but this could create catastrophic consequences on its own. This is because millions of people, especially in southeast Asian countries such as Indonesia, rely on palm oil for their gross domestic product and overall livelihood. 

Therefore, one of the best solutions to help reduce the negative impact created by the palm oil industry is to diversify the types of oils used in everyday products and also mitigate deforestation for future palm oil production sites.

This is imperative seeing as if the palm oil industry were to shut down tomorrow, the economic repercussions would prove difficult to handle – making the sustainable production of palm oil a happy medium for all.

Here are some of the ways the palm oil industry is likely to evolve in the coming years:

• More Sustainable Practices – As stakeholders grow concerned regarding the environmental repercussions created by the palm oil industry, there will likely be changes made to the overall process to producing palm oil – such as seeking to implement the values depicted by the Roundtable on Sustainable Palm Oil (RSPO) to encourage more ethical sourcing and mitigate deforestation. 
• Shifts in the Global Market – Consumers and businesses alike are beginning to grow wary of the effects of palm oil production and if it is a lucrative long-term investment. Therefore, it is probable that there will be a shift in both consumer preferences and the economic viability of the palm oil industry. This is the main reason why the palm oil industry should seek to be more sustainable sooner than later. 
• Stricter Requirements – Countries around the world are becoming increasingly concerned with the effects created on behalf of the palm oil industry, meaning regulatory changes and stricter environmental legislation could arise and be necessary for those in the industry to follow. This would help to reduce the negative impact created for workers or mitigate potential issues within various supply chains. 
• Technological Improvements –  Thanks to other tactics such as climate smart farming, specialised technologies to help optimise agricultural practices are becoming the new norm. This can ultimately help to reduce the environmental impact often created by the palm oil industry.

👉 Overall, the future of the palm oil industry will likely evolve as a result for the need for greater sustainability efforts in conjunction with shifting market dynamics – both of which can help propel the palm industry into a more sustainable future.

Luckily, there are ways the palm oil industry can reduce their impact on the environment without needing to shut down operations entirely – such as by seeking to use products which refrain from the use of palm oil or serious adjustments to the production of palm oil itself. 

Here are some ideas for both the industry and consumers alike to mitigate the negative impacts associated with the use of palm oils: 

• Look for Alternatives to Palm Oil – Many products use palm oils even when they don’t need it, such as nut butters – which can often be made using natural oils. Yes, it’s true that you’ll have to stir your peanut butter before using it – but refraining from the use of palm oil can help reduce the negative impact it creates on the planet.  
• Seek Greater Supply Chain Transparency – Aiming to boost the transparency amongst suppliers related to the palm oil industry can help to promote more sustainable practices. within the palm oil supply chain to ensure accountability and promote responsible sourcing practices. 
• Alternative Land Usage – One of the main problems with the palm oil industry is how much it contributes to deforestation. Therefore, seeking to utilise areas of land in line with sustainable forestry can help to promote the conversion of forests while also heavily reducing the environmental impact created by the palm oil industry. 

If reading this article about the palm oil industry and how it is bad for the environment has inspired you to consider your company’s own carbon footprint, Greenly can help.

At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. We offer a free demo for you to better understand our platform and all that it has to offer – including assistance with boosting supplier engagement, personalised assistance, and new ways to involve your employees.

Learn more about Greenly’s carbon management platform here.