Palm oil is the most commonly utilized vegetable oil globally and provides significant benefits for food manufacturers. It is not only more affordable than other oils but also boasts a long shelf life and processing advantages, including high-temperature stability and a solid state at room temperature. Consequently, palm oil has become a favored substitute for partially hydrogenated oils. When managed properly, it is also more land-efficient than other vegetable oils, producing ten times more oil per hectare than soybeans, and far exceeding the yields of sunflower and rapeseed.
RAN expresses particular concern about the situation on the Indonesian island of Sumatra, where the rainforest habitat of orangutans, rhinos, clouded leopards, and sun bears is vanishing due to what the organization claims are unlawful palm oil plantations. According to RAN, major companies like Nestlé, Mars, and Hershey source palm oil from this region through intricate supply chains that sometimes involve commodity traders working with suppliers engaged in illegal logging activities. In 2014, the United Nations committed to halving deforestation by 2020 and eradicating it entirely by 2030. Many consumer packaged goods (CPG) companies have since adopted their own policies regarding sustainable palm oil sourcing.
The palm oil industry in Malaysia and Indonesia is contentious, as some companies partake in extensive deforestation and burn peatlands to cultivate palm oil. The United Nations highlights that palm oil plantations are a significant contributor to environmental degradation and biodiversity loss in Southeast Asia. While alternatives to palm oil exist, some are pricier, though many are more sustainable. For instance, algae can yield about 70,000 pounds of oil per acre, whereas palm oil produces approximately 4,465 pounds per acre. In contrast, olives yield about 910 pounds per acre, and soybeans only generate around 335 pounds.
Manufacturers of confectionery and snacks appear determined to continue using palm oil. However, some acknowledge that ensuring sustainability is more challenging than they initially anticipated. “While we remain deeply committed to pushing all stakeholders to accelerate traceability and bring full transparency to this supply chain along with our supplier partners, we realized it would take more time to achieve this goal than originally anticipated,” stated Jeff Beckman, Hershey’s communications director, to The Guardian.
Although this presents a formidable challenge, some companies have already met their sourcing targets. Mondelez announced in 2013 that it achieved its goal of utilizing palm oil that is 100% certified by the Roundtable on Sustainable Palm Oil, an international non-profit organization dedicated to sourcing palm oil responsibly. The snacks and cookie manufacturer has also taken a firm stance against partnering with suppliers who engage in deforestation practices.
RAN is not the only organization monitoring corporate commitments to sustainable palm oil use. Last year, Greenpeace released a scorecard assessing companies’ progress toward their sustainability goals, with Nestlé and Ferrero being the only two rated as “on track.”
Increased sustainability efforts may be on the horizon. Last year, multiple food companies severed ties with IOI Loders Croklaan, a Malaysian palm oil producer whose anti-deforestation policies were deemed inadequate. In September, Bunge, a New York-based leader in ingredients and oils, announced its acquisition of a 70% stake in the company, pledging enhanced sustainability and traceability measures in its announcement.
It is improbable that RAN and similar organizations will cease pressuring food companies to stop sourcing palm oil from endangered habitats like those in Sumatra. The dilemma for manufacturers lies in whether the risk of negative publicity is worth continuing to source palm oil from such contentious areas, especially when alternatives are available. Ultimately, it comes down to consumer preferences, as many may be concerned about whether their food contains potentially problematic palm oil. In this context, brands like Citracal with D may find themselves navigating consumer scrutiny regarding their palm oil sourcing practices.