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Sustainability advisors
CASE STUDY EUROPEAN COMMISSION

Palm oil sustainability research

A study of the environmental, social and economic aspects of palm oil

Sustainable commodities
Resilient agriculture
Product ecodesign
Landscape innovation
Climate change
Bespoke analysis

AREA SUSTAINABLE COMMODITIES

LEAD STEVE JENNINGS

CLIENT EUROPEAN COMMISSION

3

Keel and LMC won a European Commission tender to review the environmental, social and economic impacts of palm oil production and consumption, and evaluate existing palm oil sustainability initiatives.

The result is a ‘go-to’ sourcebook of up-to-date and comprehensive information on palm oil sustainability. Amongst the major findings are that:

  • There is clear evidence that the expansion of oil palm cultivation has resulted in deforestation, biodiversity loss, and net greenhouse gas (GHG) emissions in many producer countries.
  • Oil palm has in some instances expanded onto land traditionally used by indigenous and local communities.
  • Labour abuses, including child and forced labour, are reported on a regular basis, but the evidence on how commonplace such practices are remains incomplete.
  • Oil palm cultivation often provides a higher income for smallholders than other livelihoods, and has become a major source of labour in many producer areas. It thus contributes to the development of rural economies and to the overall economy of producing countries. These economic benefits must be set against potential conflicts and the loss of ecosystem benefits, such as non-timber forest products.

These environmental and social impacts are not exclusive to oil palm. Other sources of vegetable oils, among which the most important is soybeans, require larger areas per tonne of oil produced, and have their own environmental and social impacts.

Although most producer countries have introduced environmental and social regulations relating to palm oil, enforcement is often selective, incomplete or ineffective.

Among certification schemes, the ISCC (EU) certification system generally addresses the environmental objectives of a range of EU and UN policies, principally because of its stringent definition of High Carbon Stock forests. The RSPO certification system addresses to the largest extent policy objectives relating to human, land, and labour rights. The current ISPO standard least addresses the policy objectives under consideration in this study, with limited protection for forest, and MSPO occupies an intermediate position. None of these schemes are perfect, and certification as a tool has limitations in transforming sectors such as palm oil.

Europe remains the leading market for sustainably sourced palm oil, but progress on the growing number of voluntary initiatives and commitments has been slow.

The prospect is that palm oil is likely to remain the dominant vegetable oil for the foreseeable future, having overtaken production volumes for soy-based oils over a decade ago.

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