Why palm oil is so cheap

• Palm oil is the most widely consumed vegetable oil on the planet
• Its usage has become controversial as huge areas of rainforest have been cut down or burned to make way for palm plantations.
• Sustainable palm oil's popularity is increasing, and the roundtable on sustainable palm oil now certifies 19% of all palm oil produced worldwide.
• Visit Business Insider's homepage for more stories.

The following is a transcript of the video:

Palm oil is a 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 consume, on average, 8 kilos of palm oil each year.

But even if you look through the ingredients of your product, you may not be able to spot it, because, on the back label, it could look like any of these:

Vegetable oil, vegetable fat, palm kernel, palm kernel oil, palm fruit oil, palmate, palmitate, palmolein, glyceryl, stearate, stearic acid, elaeis guineensis, palmitic acid, palm stearine, palmitoyl oxostearamide, palmitoyl tetrapeptide-3, sodium laureth sulfate, sodium lauryl sulfate, sodium kernelate, sodium palm kernelate, sodium lauryl lactylate/sulphate, hydrated palm glycerides, etyl palmitate, octyl palmitate, palmityl alcohol.

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, 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 palm 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, RSPO (Roundtable on Sustainable Palm Oil): "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 in the workers that have been employed to harvest the material."

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 the main reason the oil is so cheap. Oil palm trees are evergreen and perennial, they produce oil all year around, and can happily grow in soils that many other plants can't.

NGOs and companies from around the world set up the NGO 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 deforestation-free.

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.

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.

Joss Lyons-White, PhD student on the Science and Solutions for a Changing Planet: "Palm oil is still pales in comparison in terms of its contribution to deforestation. It pales in comparison with cattle and beef products, which some estimates put up, put up being around responsible for around 70% of tropical deforestation rates."

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 says that, "Despite the commitments that have been made, evidence shows that rates of commodity-driven deforestation have not decreased." since 2001

Dan Strechay, RSPO: "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, and how we go about sourcing and growing our materials like palm oil or soy or cotton."