As UN climate negotiators met in Bangkok last month, the organisation World Growth launched a new campaign to highlight the economic benefits of oil palm. The pro-market nongovernmental organisation issued a series of press releases extolling the benefits of sustainable oil palm development, calling it a ‘path out of poverty’ for developing nations and poor people. Furthermore it decried ‘political intervention by environmental groups’ who sought to challenge investment in oil palm, calling their actions ‘morally indefensible’.

That campaign provoked howls of protest from environmentalists around the globe. Green bloggers buzzed with indignation. Sean Whyte of Nature Alert wrote on the website Orangutan Outreach that the oil palm industry was ‘in denial’ and accused World Growth’s founder Alan Oxley of being selective with his facts. Whyte added that oil palm was ‘arguably the most environmentally destructive industry in the world’.

The campaign, and the furious response it has generated, reflects a growing concern that the booming business of palm oil has social and environmental consequences that are poorly understood.

To contribute to this debate, a new CIFOR report reviews research into the impacts of palm oil and concludes that much more information is needed.

‘Global concern about natural resources has made the question of oil palm development much more pressing,’ says Markku Kanninen, one of the report’s authors and a CIFOR scientist. ‘Some see the oil palm industry as a major driver of forest destruction and a contributor to greenhouse gases. Others emphasise its potential as a renewable fuel. Its contribution to poverty alleviation remains unclear. We wanted to find out what is actually known about the consequences of this rapidly growing industry.’

A productive source of oil

Elaeis guineensis is a tropical forest palm native to west and central Africa. It produces from three to eight times more oil from a given area than any other tropical or temperate oil crop. Most palm oil is used in foods, but the vegetable oil also shows up in detergents, cosmetics and plastics.

The palm oil trade began back in the sixteenth century when barrels of it were first exported from West Africa to Europe. As its usefulness became more widely recognised, the palm was transplanted around the world. The first plantations in south-east Asia were established in peninsular Malaysia in 1917.

Indonesia, the world’s largest producer

Since the early 1980s, the total area of land allocated to mature oil palm has more than tripled globally, reaching nearly 14 million hectares in 2007. By 2005, Indonesia had become the world’s largest producer with plans to continue its rapid rate of expansion.

The total area that oil palm plantations now occupy in Indonesia increased by more than 2,100 percent over this same period. Oil palms now grow on 4.6 million hectares. Indonesia's wet tropical climate provides ideal growing conditions for oil palm. Land is abundant and labour is cheap.

But much of the land currently used for oil palm was once tropical forest. Conservationists are concerned that continued development of the industry may lead to more forest destruction.

Biofuels

Worldwide concerns about energy sources have escalated the controversy over oil palm. High prices for fossil fuels have spurred interest in biofuels and other sources of energy. While 77 per cent of palm oil is now used for food, biodiesel from palm oil stands out as a leading biofuel option. Major investments are already planned to convert millions of hectares of tropical forests, peatlands and other land types to oil palm plantations.

Uncertainty

‘We still don’t know the full implications of our current choices,’ Kanninen says. ‘How can we maximise benefits and minimise costs? There is plenty of data available on investments, but we lack a systematic examination of the real impacts of this fast-growing industry. Credible, unbiased research will help us shape national and global policies on biofuels.’