By Sherree DeCovny, Co-Founder and Research Principal
Palm oil is the largest vegetable oil in the world in terms of produced volume next to soybean oil. It’s mainly used in food and for cooking, but it is also used to manufacture soap, detergent, pharmaceutical products, cosmetics, biofuels and oleo products. Most of it originates in Indonesia and Malaysia, although a small amount comes from Thailand, Colombia, Honduras, Guatemala and Papua New Guinea.
The fruit is transported from the plantation to the mill, and then the crude oil is transported to the ports and shipped to refineries abroad. The EU is one of the largest importers of palm oil. In 2015, it imported 4.54 million tonnes, although volumes have been decreasing because of the gradual substitution of palm oil for other vegetable oils in foods. The Netherlands accounts for over 60% of European re-exports of palm oil, and Germany follows with 24%.
Sustainability is important because oil palms grow in ecologically vulnerable areas. Since 2004, the Roundtable on Sustainable Palm Oil (RSPO) has been collaborating with the global supply chain to transform the palm oil industry and support a transition toward 100% sustainable palm oil. It developed environmental and social criteria that companies must comply with to produce Certified Sustainable Palm Oil (CSPO), and many companies have adopted this standard as their industry benchmark.