The impact of palm oil culture on biodiversity

1. What is the importance of palm oil globally?

Oil palm is the 3rd largest oil crop in terms of planted area behind soy and rapeseed. Because of its high yields, oil palm produces about 35% of all vegetable oils on less than 10% of the land allocated to oil crops. Palm oil is high in palmitic fatty acid and almost 75% of world production goes into food products, particularly cooking oil and processed oils and fats (e.g., margarine). Palm kernel oil is high in lauric fatty acid and is used mostly for soap and industrial purposes, as well as processed foods.

Palm oil is also used to produce biofuels but in the United States, the Renewable Fuel Standard requires that biomass-based diesel meets a lifecycle greenhouse gas emissions reduction of 20%, and the United States Environmental Protection Agency (EPA) analysis indicated that palm oil biofuels do not meet this minimum threshold needed to qualify as renewable fuel. A study that modelled land-based emissions under several biofuel mix scenarios in Europe found that across all conventional feedstocks considered, oil palm had the greatest emissions intensity (emissions per mega joule of biofuel consumed). Oil palm’s intensity was 1.5 times that of soybean, the second most emissions intensive feedstock, and was largely driven by carbon dioxide emissions from drainage of peatlands in Southeast Asia for oil palm development.

Even if the distinction is not always clear, oil palm has a large ‘smallholder’ sector, with in some countries up to 94% of the oil palm land allocated to ‘smallholders’ as compared to large landholders.

2. How is palm oil produced?

Palm oil is derived from the oil palm tree originating from Africa. The highest concentration of palm oil fields is in Indonesia and Malaysia, which provide 85% of the world production; it is also cultivated in western Africa and South America. Since the 1990s, it has become a global commodity widely used in processed foods, in good part because of its high yield. A palm oil plantation yields between 1 (in Africa) and 3.8 tons (in Indonesia) of oil per hectare, compared to 0.8t for rapeseed, 0.7t for sunflower and 0.5t for soy.

Oil palm is a tropical plant species. It needs high rainfall, adequate solar radiation and high humidity to maximize photosynthetic capacity. The cultivation of oil palm is mostly done in a monoculture, except in Africa where it is part of an agroforest system. Palm trees are planted about 10 meters apart so that their crowns do not overlap. Three years after planting, the trees start to bear fruits, and reach peak production after about 10 years. After 25 years the trees become too tall, complicating harvesting, and yields decline; plantations are then cut down and new palms are replanted. Oil palm cultivation is labor-intensive because harvesting is largely manual. This high labor requirement makes oil palm an important livelihood option is many regions.

Fresh fruits are harvested about every two weeks and are crushed to extract the oil from the kernel and the flesh of the fruit, separately. The oil from the fruit goes into food production, whereas the oil from the kernel is used mostly for soap and industrial purposes, but also for processed foods.

Oil palm plantations can take many forms that can be categorised into four main types:

1. Industrial plantations, usually managed by a company, they have their own mill, and cover thousands of hectares; 
2. Medium-sized operations, 25-1000 hectares, without company status; 
3. Smallholder plantations usually run as family farms, typically less than 50 hectares, and relying on external processing,  
4. Smallholder plantations in agroforestry settings, common in Africa, the oil produced is mainly for local consumption 

The exact way small scale productions work vary from region to region and country to country, but they are a very important actors in the sector, since they produce around 40% of global palm oil.

3. What is the impact of palm oil production on biodiversity?

The main direct impact on biodiversity of oil palm cultivation is the habitat loss caused by the deforestation and fire before planting. If, globally, oil palm development causes less than 0.5% of all deforestation, in some parts of the world, up to 50% of deforestation can be attributed to palm oil production. In Malaysia, most of the expansion of oil palm cultivation was done at the expense of forest areas. Oil palms can also be planted in areas that previously were croplands, pasture or shrub land. Between 2005 and 2015, industrial oil palm plantations accounted for 50% (2.1 Mha) of Borneo’s old-growth forest area loss.

Expansion of oil palm, without accounting for biodiversity, is not compatible with international biodiversity policies. Oil palm plantations are much less diverse than the rainforests they replace, and species diversity decreases significantly when forests are converted. The net impact of oil palm is the result of a complex interplay between rodents, snakes, local people, and the loss of ecosystem services provided by the natural forests that palm plantations have replaced.

Given the commonly mono-cultural nature of oil palm cultivation, the simple, one canopy layer structure of plantations, the almost complete absence of leaf litter, the lack of understory vegetation and woody debris, and the more open canopy, it is hardly surprising that the species diversity of oil palm concessions is lower than that of natural forests.

Smallholder plantations tend to harbor higher diversity than industrial ones. Conflicts between wildlife and humans tend to increase when oil palm plantations are established, with species like orangutans and tigers being displaced. In mixed landscapes of oil palm plantations and forests, the plantations can maintain the ecological connectivity between forest areas.

Some species, mainly generalists like pigs and some snakes, benefit from oil palm plantations because of the availability of food like oil seeds for the pigs, and rodents like rats and squirrels for the snakes. In turn, the pigs are killed for meat, and the snakes are used for their skins, mainly by plantation workers.

The cultivation and development of oil palm has significant negative impacts on biodiversity. It is difficult to compare the biodiversity impacts of oil palm to other agricultural systems directly, but it is clear that other agricultures also have a significant impact on biodiversity. For example, in the Amazon, 150 million hectares have been lost and around 80% of this was due to cattle ranching. Another major crop, soy, also has a large negative impact on biodiversity, supporting an impoverished bird diversity compared to natural ecosystems in Brazil and Argentina. However, given the rising demand for vegetable oils and that oil palm produces much more oil than other oil crops for the same cultivated area, moving away from palm oil might not be the best solution to obtain net positive effect on biodiversity.

Oil palm plantations have a predominantly negative net effect on ecosystem functions when compared to primary and secondary rainforest. Net effects do not imply that all effects on a given ecosystem function are positive or negative, but that the majority or most-dominant effects are in the given direction

4. What are the other impacts of palm oil production?

Other indirect impacts of palm oil production include the greenhouse gas emissions related to deforestation, the use of fire for clearing land, water quality, freshwater, species diversity, invasive species associated with oil palm, pest-spillover effects and secondary impacts of hunting.

• Carbon dioxide: Though palm oil plantations can maintain high rates of carbon uptake and their oil can potentially replace fossil fuels, it would take decades, to compensate for the carbon dioxide released when forests are cleared and peatlands drained. However, in the long-term, if palm oil directly replaces fossil fuels, it is theoretically possible to achieve carbon neutrality and even negative emissions as long as fossil fuels play a minimal, if any, role in the plantation’s fertilization, processing and transport. The potential to achieve carbon positive outcomes in the longer term is substantially greater than for other oil-crops that replace forest as, despite its longer maturation phase, oil palm requires an order of magnitude less land to produce equivalent amounts of biofuel. But some studies show that “it would take between 75 and 93 years for the carbon emissions saved through use of biofuel to compensate for the carbon lost through forest conversion, depending on how the forest was cleared”.  
• Nitrous oxide: Oil palm plantations have been observed to release nitrous oxide into the atmosphere. Nitrous oxide is a long-lived and potent greenhouse gas with a global warming potential estimated at 265–298 times greater than carbon dioxide. 
• Methane: Oil palm plantations and the production of palm oil, can be significant sources of methane. Methane is the second most important driver of the atmospheric greenhouse effect and is associated with various additional (generally less well understood) impacts on atmospheric properties including stratospheric water vapour, ozone, sulfate aerosol, and lifetimes of various other atmospheric compounds. Methane is formed during anaerobic decomposition and is generally associated with anoxic waters and liquid waste—this is why the anaerobic ponds used to treat palm oil mill effluent and waterbodies within and around palm plantations are the main sources. 
• Isoprene: One study in Malaysia estimated that the oil palm plantations emitted about seven times more isoprene per unit area than the forests they replaced. Isoprene is believed to influence the atmospheric properties that control the condensation of water vapour, thus influencing cloud cover and rainfall. Isoprene contributes to a process that involves the generation of hydroxyl radicals which promotes smog and ozone in a polluted environment. Thus, oil palm plantations will exacerbate air pollution in the vicinity of industrial centers with wider consequences for people and the environment. 

Water quality in and downstream is also affected by fertilizers, pesticides, and other chemicals all influence local drainage and impact water quality and aquatic habitats. The effluent from most modern mills is generally minimized as much as possible, but release into local rivers has been known to cause severe impacts on aquatic ecosystems. It is also generally believed that the release of nutrients and silt from palm oil and other land developments will negatively impact aquatic habitats nearby— including fisheries and coral reefs.

5. What can be done to mitigate the impact of oil palm on biodiversity?

The main strategy that has been used to mitigate the impact of oil palm cultivation has been to address the loss of natural forests and of peat lands with actions ranging from government regulation to voluntary actions. Initiatives focusing on sustainability of the industry have mostly reacted to the main causes of direct loss of biodiversity, which are land clearing and fires during the expansion of palm oil cultivation. Even if some smallholdings, for example, may be under more hunting pressure than well-managed large-scale plantations, preliminary research from Peninsular Malaysia shows slightly higher levels of biodiversity in oil palm smallholdings, but this is likely context specific and should not be generalized to other oil palm dominated landscapes in the tropics.

Less effort has been made to address the underlying causes, such as the growing demand for vegetable oil and the political economy of land acquisition and development. The direct links between weaknesses in land governance, including corruption and collusion over obtaining oil palm development permits, are well established in the academic literature on forest management and extensively documented in the “grey literature” on oil palm.

Over the past two decades, a large range of environmental governance initiatives have emerged to address sustainability in the industry. These include voluntary certification and corporate commitments, state led regulations and hybrid landscape approaches. There is high complementarity between these initiatives, and together they cover a broad conservation scope and stakeholders. At present, there is still limited evidence of the effectiveness of sustainability initiatives in the industry.

Various international organisations and processes are involved to establish intergovernmental targets of direct relevance to oil palm and biodiversity conservation. These include The Convention on Biological Diversity (CBD)¹ , most of the 17 Sustainable Development Goals of the United Nations², and the climate change and desertification related conventions. For example, 20 specific Aichi Targets of the CBD Strategic Plan for Biodiversity 2011–2020³ are directly relevant to oil palm production and consumption.

Among the number of steps at which mitigation action can be taken in order to offset and minimize the predicted negative impact are:

• Avoidance: addressing the impact before it happens to make it less severe; 
• Restoration: on-site restoration of biodiversity following an impact;  
• Compensation and offset: replacing the lost resources or providing alternatives and ensuring a net positive impact.

The mitigation hierarchy, for example, is a sequence of steps taken throughout a project’s lifecycle starting with avoidance of impacts, minimization of inevitable impacts, on-site restoration and, finally, compensation or biodiversity offsets if required.

There are certification systems in place, such as the Roundtable on Sustainable Palm Oil⁴, that require producers to avoid clearing primary forests, to protect rivers, and to avoid fires and control pollution. Since the last decade, as public awareness of the problem of deforestation grows, there is a trend of individual corporate commitments of “no deforestation”, and the palm oil industry is one of the sectors where this level of commitment is the highest, with more than half of the companies having such a commitment.

In terms of governmental intervention, there can be policies in the countries where oil palms are grown, like the moratorium on deforestation in Indonesia, or in the countries that import palm oil, like the Amsterdam Declaration⁵ that support a fully sustainable supply chain.

Also, companies with “no deforestation” commitments are in a powerful position to drive behavioral change upstream in the supply chain. Buyer demands are thought to serve as a leverage point to mobilize sustainability practices of less visible producers such as non-certified small-to medium-sized companies and smallholders with insufficient incentives or capacity to prioritize conservation. Eventually, it is important to underline that most of the sustainability initiatives in the sector complement each other and that these conservation interventions together cover a broader scope than any one of them does individually. They have different conservation scopes, are applied at different scales, and target different stakeholders and markets.

Schematic representation of selected interactions between different sustainability tools and initiatives in the oil palm industry. Arrows depict relationships where a tool/initiative is explicitly used by another initiative to achieve its sustainability objectives. Please note that not all existing relationships, initiatives or tools are represented. Rather this figure aims to illustrate some of the articulation complexities in the environmental governance of the oil palm sector

¹ www.cbd.int/ 
² www.un.org/sustainabledevelopment/sustainable-development-goals/ 
³  www.cbd.int/doc/strategic-plan/2011-2020/Aichi-Targets-EN.pdf
⁴ https://rspo.org/about 
⁵ www.euandgvc.nl/documents/publications/2015/december/7/declarations-palm-oil 

6. What is the future of palm oil?

The global demand for vegetable oil is growing fast. The demand in 2050 is projected to be double of what it was in 2008, with a demand of 310 million tons, up from about 165 million tons in 2013. It is possible to increase the yield of current production through better management or use of more productive varieties, for instance, but that does not necessarily mean that there would not be more development and more land conversion, since palm oil production is a lucrative endeavor for investors.

There is room for cultivation of oil palms in Africa and South America, where the production is still relatively small, but the environmental impact of expansion of oil palm plantations in those areas is understudied.

Governments of producing countries have also reacted to international debates on oil palm and deforestation:

• In Brazil, for example, the National Plan for the Production and Use of Biodiesel, and the Brazilian Forest Code are among several regulatory documents that refer to the sustainable development of oil palm; 
• The Indonesian moratorium on issuance of forest utilization licenses, issued in 2011, addresses environmental concerns about oil palm development by prohibiting the allocation of new oil palm leases in “primary forests” and “peatland areas”. In the same year, the Ministry of Agriculture initiated the Indonesian Sustainable Palm Oil certification system (ISPO);  
• The Malaysian Sustainable Palm Oil system is based on seven principles, which include the protection of the environment, natural resources, biodiversity and ecosystem services, and guidelines for the development of new plantations;  
• Governments that use but do not produce palm oil have set aspirational goals for and restrictions on palm oil imports and purchases. Several importing governments have made political commitments related to oil palm’s perceived sustainability. 

Anyway, a potential substitute may come in the form of a yeast, Metschnikowia pulcherrima, which is used as a biological control agent in the South African wine industry and is able to produce oil with a similar lipid profile to palm oil.

7. What are the main gaps in the knowledge about palm oil production impacts?

The most significant gaps that require further research are:

• The socio cultural and economic impacts of oil palm development;
• The spatial distribution of the different vegetable oil crops; 
• The modelling of past oil palm expansion in order to understand the constraints and model future expansion; 
• The impact of large scale expansion on local climate and water regime; 
• The costs and benefits of optimal biodiversity management for the growers; 
• How species survive and move across oil palm landscapes; 
• The characterization of the biodiversity value of traditional oil palm production and the feasibility and productivity of small-scale systems, and the conservation benefits of such systems.