Why Palm Oil Is So Cheap - YouTube

Palm oil is cheap and ubiquitous.

It's used in thousands of everyday products

and is the most widely consumed vegetable oil

on the planet.

You can get a kilo of palm oil for just $2.

But its usage has become unsurprisingly controversial,

as huge areas of rainforest

have been cut down or burned

to make way for palm plantations.

So why is this oil still so cheaply

and readily available?

Palm oil is in everything,

from chocolate to bread,

instant noodles to shampoo.

And without even really thinking about it,

globally, we each consume, on average,

about 8 kilos of palm oil every year.

But even if you look through the ingredients

of your product,

you may not be able to spot it.

Because written on the back label,

you could see any of these.

These days, Indonesia and Malaysia make up

85% of all palm oil production.

But the oil palm species used actually originated

in West Africa.

The trees were introduced to Malaysia in 1875,

but for 100 years, something was missing.

For years, the flowers were pollinated by hand,

requiring hundreds of workers

and limiting efficiency.

Until, in 1981, African palm weevils

were introduced to the country.

These little beetles pollinated the plants

with no extra work from humans,

and, suddenly, palm oil yields boomed.

Since this, palm oil's popularity

has done nothing but rise.

Demand spiked again in the '90s,

as companies suddenly realized

the negative health implications

of the trans fats found in many processed products

and replaced them with palm oil.

And as ultra-processed foods increased,

so did the use of the oil.

But this incredible rise came at a cost.

The rapid expansion of palm oil plantations

has led to the destruction of huge areas

of tropical rainforest,

creating dangerous CO2 emissions

and destroying the remaining habitats

of already endangered species.

Dan Strechay: It's extremely cheap.

It's shelf-stable.

It has natural preservative qualities.

It is a really good vegetable oil,

but the fact is, it has been grown

in a way that's caused a lot of environmental damage

and has also impacted communities

and the workers that have been employed

to harvest the material.

Narrator: Seeing the devastation caused,

your first instinct might be to cut out palm oil completely.

But searching for an alternative

might actually make things worse.

Palm oil is so efficient

that using an alternative oil

would require up to 10 times the land to grow.

This efficiency is the main reason the oil is so cheap.

Oil palm trees are evergreen and perennial.

They produce oil all year round

and can happily grow in soils that many other plants can't.

NGOs and companies from around the world

came together to set up

the Roundtable on Sustainable Palm Oil

in 2004 to create a set of criteria

to grow this crop sustainably.

But it's only since 2018

that the Roundtable has embraced

the high carbon stock approach,

a system that helps identify valuable areas of forest

and keeps the palm oil they certify

completely deforestation-free.

Strechay: The fact is, it's just a plant.

It's how and where we've done it

and how we've grown it that causes the problem,

but that means that it's a human problem.

We created the issue.

That means that we also have the ability

to solve that issue, to fix that issue.

Narrator: Fixing this problem

isn't going to be easy, though.

Joss Lyons-White: There are numerous barriers that exist

for companies trying to implement

zero-deforestation commitments.

So, one of those is the fact

that you have highly complex supply chains,

and it's difficult to know exactly

where your palm oil is coming from.

Another one is that you have varying levels

of government support

in different regions that produce palm oil.

And the extent of government support,

it plays an important role

in whether a company can produce

without deforestation, for complex reasons.

Narrator: So, are we doing enough?

The Roundtable now certifies about 19%

of palm oil worldwide, but getting to this point

has been a long, slow process,

and we're running out of time.

Kristjan Jespersen: Critically, global consumption

for palm oil will invariably increase

until 2050 as we approach 9.6 billion people.

Lyons-White: You also have to set the persistence

of large markets, such as China and India,

where there is much more of an emphasis on price

rather than the sustainability profile of the product,

and this means that if you're a manufacturer, say,

and you're trying to buy palm oil

and encourage your suppliers

to make sure that their production is deforestation-free,

you have limited leverage

because they always have an alternative market

they can sell into.

So there are these challenges

with implementing a commitment to zero deforestation,

which make it very difficult to achieve.

Narrator: India, China, and Indonesia now account

for nearly 40% of all palm oil consumed,

and it looks like palm oil is going to remain cheap

for a while longer,

but the cost to the planet could be devastating.

But it's not just palm oil that's the problem.

Lyons-White: Palm oil still pales in comparison

in terms of its contribution to deforestation.

It pales in comparison with cattle and beef products,

which some estimates indicate may be responsible

for as much as a quarter of all tropical deforestation.

Narrator: Global Canopy published a list of 500

companies and financial institutions

linked to tropical deforestation from soy,

palm, cattle, and timber.

Only half of these companies have made zero deforestation

a commitment by 2020.

And not a single one of these companies

is on track to make this target.

Global Canopy also says that,

despite the commitments that are being made,

evidence shows that rates of commodity-driven deforestation

have not decreased since 2001.

Strechay: Whether it's palm, soy, beef, leather,

all ingredients, companies have a responsibility

not to wait for the consumer to make the demand.

They have a responsibility

to do it before the consumer demands.

Any forest that's being cleared as we face

what many would call a climate crisis is too much.

So what we know we have to do

is we have to take a very hard look

at how we consume things,

why we're consuming it,

and how we go about

sourcing and growing our materials

like palm oil or soy, beef, or cotton.