Get our best content directly in your inbox
Sign up

Palm oil in the food industry: applications, nutritional value and sustainability

young woman with glasses smiling
11 min read
AUTHOR: Fiona Holland
Palm oil fruit

Palm oil is probably one of the best known and most debated ingredients in the food industry. From its nutritional profile to its effects on the environment, and the question of whether it can be replaced with other fats, there are a range of arguments for and against the production, use and consumption of the ingredient.

What is palm oil?

Palm oil is a vegetable oil found in the fruit of oil palm trees, also known as Elaeis guineensis. It is typically extracted in two different forms – either as palm kernel oil which is made from crushed palm kernels, or as crude palm oil which is extracted from the squashed fruit that grows on trees and has a natural red colour due to the carotenoids it contains.

Today, southeast Asia is known as the epicentre of palm oil production. The oil palm however was first discovered in west Africa across a variety of tropical rainforest regions including Cameroon, Ivory Coast, Liberia, Ghana, and Togo. The crop was first introduced to the West when the Portuguese made expeditions to Africa, leading to the product becoming a popular ingredient on the ships of the Atlantic slave trade. From the 1830s onwards palm oil was transported to Calcutta Botanical Garden by British administrators, which kickstarted a series of trial plantings in the southern Indian region of Kerala.
In the mid-19th century oil palm seedlings were also brought over from Africa to Southeast Asia by Dutch botanists, where they planted the oil palm in the Bogor gardens in Java, Indonesia. Belgian agronomist Adrien Hallet, who had been working to source rubber in what was the Belgian Congo at the time, expanded the production of palm oil in Indonesia, setting up the country’s first commercial plantation for the ingredient in Sumatra in 1911. The following year, Malaysia’s first commercial oil palm plantation was set up using seedlings purchased from Hallet by the French writer Henri Fauconnier.

Deforestation caused by palm oil

Oil palm plantation at edge of the rainforest in southeast Asia, where trees are logged to clear land for agriculture.

cart with palm oil fruit in Costa Rica

Palm oil production in Costa Rica.

Left: Oil palm plantation at edge of the rainforest in southeast Asia, where trees are logged to clear land for agriculture.

Right: Palm oil production in Costa Rica.

From then on, oil production continued to soar, and today over 85% of the global supply of palm oil still comes from Malaysia and Indonesia, according to the WWF. Another 42 countries also produce the oil, including Thailand, Nigeria, Colombia, Guatemala, and Ecuador.

The ingredient is used in a wide range of food products. These include spreads like butter, margarine, peanut butter and Nutella; cakes, chocolate, biscuits, certain sliced breads and even ice cream. Besides food, it can also be found in some makeup and cleaning products and, in some countries, it’s also used to make biofuels. According to the WWF, the ingredient is present in nearly half of the packaged items we find in supermarkets. It’s unsurprising then that it’s still the most consumed vegetable oil worldwide.

Out of all the oils used in processed foods, some experts have suggested palm oil is relatively better for you in comparison to others. While it is high in saturated fat, it doesn’t contain as much as butter does, and is also free from trans fats. Palm oil is also high in antioxidants like vitamin E, which is good for the immune system, and eye and skin health.

Not all scientists believe it’s a healthy oil, however. While some past research says the product could help to reduce levels of bad cholesterol, other reports suggest the opposite. Two types of palm oil tend to be used in the food industry – refined and unrefined. You’ll usually find refined oil in processed foods like pizza, chocolate, coffee, margarine and peanut butter. In the western world, most of the palm oil consumed tends to come from these processed goods as the oil isn’t normally used in cooking. While both unrefined and refined palm oils have a similar nutritional profile, the refined version loses its carotenoids when it is processed meaning it lacks the high levels of vitamin A which you’d otherwise find in the unrefined product.

Deforestation and loss of habitat: why palm oil is deemed unsustainable

One of the best-known cons of palm oil is its negative impact on wildlife and biodiversity caused by deforestation. The high demand for the ingredient has resulted in the destruction of large expanses of tropical rainforests to transform the land into oil palm plantations. Creating these spaces to grow the oil palm has destroyed the habitats of thousands of endangered species, including the Bornean and Sumatran orangutan, Bornean Pygmy elephant and Sumatran rhino.

Tropical rainforests also naturally store carbon. When large numbers of trees are burnt down to make space for plantations, this process releases the carbon from dead plants and trees back out into the atmosphere as carbon dioxide, which in turn contributes to climate change. On top of this, much deforestation tends to also involve the exploitation of workers rights as well as child labour.

The use of palm oil in food production

One of the main reasons palm oil is so popular in food production is that it doesn’t cost much to produce. This is because large numbers of oil palm crops can be grown in small spaces of land and can maintain a high yield pretty much 365 days a year. The crop also doesn’t require much energy to produce, nor does it need nearly as many pesticides per tonne of oil produced in comparison to other vegetable oils, making it appealing to farmers.

What also makes it so attractive in the production of processed foods is that it performs well in various food applications. Its high melting point means it can remain in a semisolid state at room temperature, giving products such as peanut butter and margarine their smooth, spreadable qualities, and helping to prevent products like chocolate from melting in warm temperatures. Its smell and taste profiles are also neutral, making it suitable to add to products without changing their odour or flavour. The fatty acid composition, which is half saturated half unsaturated, also means palm oil can be split or crystallised into high melting point triglycerides – which form a solid fraction called stearin – and into low melting point triglycerides – which stay in a liquid form called olein. Olein is typically used as a cooking oil, while stearin is a hard stock, often used in margarines, shortenings, as well as cocoa butter replacers and infant fat formulas. Finally, palm oil performs very well as a natural preservative, explaining why it can be found in a wide range of processed foods.

Can palm oil be sustainable?

Many food companies have been trying to steer away from incorporating traditionally sourced palm oil into their products in recent years, and as a result it’s become quite common to see the term ‘sustainable palm oil’ in the list of ingredients of processed goods. In 2004, with the support of the WWF, the Roundtable on Sustainable Palm Oil was formed with the aim to “make sustainable palm oil the norm.” Holding over 4000 members from 94 countries including Unilever, AAK, the Malaysian Palm Oil Association and Migros, the organisation has set out environmental and social standards that members must adhere to, to limit the negative effects of palm oil production on the environment and habitats of wildlife and local communities. What this means in practice is that companies must be able to prove traceability by publishing data relating to the work of their suppliers.

“Providing a succinct definition as to what constitutes ‘sustainable’ in palm oil can be difficult, but it is generally understood as palm oil that has been produced in a way that ensures minimal impact on the environment of the regions it’s grown in”, says Gary Lewis, President of National Edible Oil Distributor’s Association (NEODA) and Chief Commercial Officer at KTC Edibles, an ingredient company based in the UK.

“This means palm oil that has been sourced in a way that doesn’t compromise the planet or people. Sustainable palm oil is produced in a way that actively minimises deforestation, protects biodiversity and ensures that workers aren’t exploited.”

Orangutan mum and baby

The production of palm oil has devastating effects on the environment and its inhabitants, causing loss of habitat for species such as the orangutang and the pygmy elephant.

Pygmy elephants playing

Left: The production of palm oil has devastating effects on the environment and its inhabitants, causing loss of habitat for species such as the orangutang and the pygmy elephant.

Being accredited by third party organisations as well as also being members of industry bodies like The Soil Association and NEODA, also means that KTC Edibles receives regular inspections from such organisations. As Lewis explains, “Undergoing regular audits from these parties means that we are being held accountable to our sustainability promises by unbiased, external organisations who have the facilities to check that our operations meet certain standards of sustainability.”

Despite the work of the RSPCO, many aren’t convinced that regular auditing and monitoring of palm oil production is sustainable enough. A study published in 2018 in the Science of the Total Environment has raised questions over whether certified oil palm plantations and their connections to older deforestation can make them ‘sustainable’ if they are situated on land which was destroyed years before. Between 2001 and 2016 around 40% of the areas in certified palm oil concessions witnessed forest loss, with tree loss being visible before and after the certification schemes have been put in place.

In an interview with The Independent, Roberto Cazzolla Gatti, Associate Professor of Conservation Biology at the University of Bologna, co-author of the study and a Research Associate at Purdue University at the time of publication, commented: “The implication is that there is no reason for companies to claim sustainable palm oil and to use labels for certified products because, in terms of deforestation, there is no significant difference between a certified and a non-certified palm oil plantation. Both need (or needed in the recent past) the complete removal of the original tropical forest.

“Our research shows quite unequivocally that, unfortunately, there is no way to produce sustainable palm oil that did not come from deforestation,” he added, “No shortcuts: if you use palm oil, certified or not, you are definitely destroying tropical forests.”

Further research published in 2020, in a more recent version of the study, also found that 75% of oil palm concessions in Indonesia and Borneo in Malaysia certified by the RSPO are situated on land that was forest or wildlife habitation in the past 30 years. The plantations occupying this land today may not have been the main contributors to deforestation but should not be able to obtain sustainable certification with this history, according to the study’s authors.

Sustainable palm oil alternatives

As consumers become more aware of the dangers of climate change and how deforestation impacts wildlife and the environment, it’s understandable why many would feel the food industry should swap out palm oil for a sustainable ingredient.

Some companies are working to develop and trial suitable alternatives to palm oil using yeast fermentation. Wisconsin-based Xylome and British company Clean Food Group (CFG) are both working to develop their own substitutes. Xylome’s alternative Yoil is a renewable drop-in replacement for palm oil made by a novel yeast fermentation process. According to the company, the product has the same profile as refined, odourless palm oil and is suitable for all food applications. CFG calls its CLEAN Palm product, made from cultivated natural yeast, “a sustainable, local, circular alternative to palm oil.” Last year the ingredients company Doehler Group announced its investment in CFG to support the scaling of its technology, demonstrating production at commercial scale as well as manufacturing product batches required for market approval.

While cultured alternatives have the potential to work just as well as traditional palm oil in food applications, it is unlikely that just two companies alone will be able to replace it on the immense scale that’s needed to fuel the current demand. The latest figures expect the global demand for vegetable oils to soar by 46% by 2050, meaning the need for the ingredient is far from disappearing anytime soon.

Asking food companies to avoid the use of palm oil in all their products would also seem to be the perfect way to avoid its negative environmental impact, but sadly it’s not that simple. As Lewis explains: “Deforestation and biodiversity loss associated with palm oil cannot be solved by switching to alternatives”, Lewis says. “A 2018 report by the IUCN found that banning palm oil or switching would lead to an increase in land use, deforestation and biodiversity loss.” Research from the WWF also echoes these findings, revealing that palm oil producers can make two fifths of the world’s vegetable oil supply on only 6% of the land used to make all vegetable oils. Creating the same amount of oil using other crops such as soybeans and sunflowers would require around four to 10 times more land, the charity says.

Producing other crops on the same scale as palm oil could end up making the problem far worse and end up increasing deforestation in other parts of the world.

There’s also the question of the people who work in the sector. As Lewis explains, “Tens of millions of people depend on palm oil for their livelihoods – especially in key producing regions such as Indonesia and Malaysia. A boycott or ban would have a huge humanitarian and economic impact.”

With the large scale of palm oil usage in the food sector and the impact on those working in this industry, it’s unlikely F&B companies will stop using it in their formulations any time soon.

Could labs be the answer to finding a truly sustainable alternative?


Related content