The true cost of palm oil

Check the ingredients list of almost anything in your kitchen. Chances are, palm oil is there. It's in roughly half of all packaged products in supermarkets — and producing it is one of the leading drivers of tropical deforestation.

Why palm oil is everywhere

Palm oil is cheap, versatile and efficient. Oil palm produces more oil per hectare than any other vegetable oil crop — about 10 times more than soy per unit of land.¹ That makes it economically attractive and, in theory, more land-efficient than alternatives.

The problem is where it's grown and what gets cleared to make room for it. Indonesia and Malaysia account for about 85% of global palm oil production.¹ In both countries, vast areas of tropical rainforest — including peatlands and orangutan habitat — have been converted to oil palm plantations.

The crop shows up in foods (margarine, baked goods, chocolate), personal care products (shampoo, soap, cosmetics), cleaning products and even biofuels. It's listed under dozens of names: palmitate, glyceryl stearate, sodium lauryl sulfate, and more. Unless you actively avoid it, you're buying it.

The scale of palm oil deforestation

Palm oil-driven deforestation hit a historic low of 32,000 hectares in 2024, according to Trase.² That sounds like progress. But the picture is more complicated.

First, 32,000 hectares is still an area larger than Malta being cleared for a single crop in a single year. Second, the trend is creeping back up. Deforestation for palm oil in Papua, Indonesia, more than doubled from 3,600 hectares in 2024 to 7,300 hectares in 2025.²

Third, domestic consumption is now the main driver. In 2024, 67% of total palm oil deforestation in Indonesia was linked to domestic demand, not exports.² That shifts the pressure from international buyers to Indonesia's own growing biofuel and food industries.

Malaysia vs. Indonesia: two different trajectories

Malaysia has managed to keep deforestation lower in recent years. In 2024, only 23% of companies operating in Malaysian oil palm concessions recorded deforestation, compared to 67% in Indonesia.³

Indonesia, by contrast, has seen an upward trend in deforestation linked to oil palm since 2021. The difference comes down to enforcement, land-use planning and whether governments prioritize short-term palm oil revenue or long-term forest protection.

Neither country has stopped clearing entirely. But the divergence shows that policy choices matter. Malaysia's lower rate proves that palm oil production and forest conservation are not mutually exclusive — if there's political will to enforce it.

Read more about deforestation in Indonesia.

What palm oil does to orangutans

The Bornean orangutan is critically endangered. There are an estimated 75,000 to 100,000 left in the wild, and about 10,000 of them live in areas that have been allocated to oil palm concessions.⁴

Between 750 and 1,250 orangutans are killed every year during human-orangutan conflicts, many of which occur when plantations expand into forest habitat.⁴ When forest is converted to monoculture oil palm, orangutans lose both habitat and food sources. The ones that remain often end up in isolated patches of forest surrounded by plantations, where they starve, are killed or are captured.

The population has declined by more than 50% in the last 60 years, driven primarily by habitat clearance for palm oil plantations.⁵ Other species — pygmy elephants, Sumatran tigers, Sumatran rhinos — face the same trajectory.

Does RSPO certification work?

The Roundtable on Sustainable Palm Oil (RSPO) is the main certification scheme meant to guarantee deforestation-free palm oil. As of 2024, RSPO-certified production reached 16.2 million tonnes, representing 20.1% of global palm oil output.⁶

Research shows that RSPO certification reduces deforestation by 33% compared to non-certified palm oil within the same concessions.⁷ That's real progress. But it also means that RSPO-certified plantations still clear forest — just less of it than uncertified ones.

The bigger problem is loopholes. A May 2026 Mongabay investigation found that several companies linked to Indonesia's Fangiono family, including First Resources, continue to expand despite holding RSPO certification.⁸ They do it by using subsidiaries, shell companies and land swaps that technically comply with RSPO rules while still driving deforestation.

RSPO's highest certification tiers — RSPO Next and RSPO No Deforestation, No Peat, No Exploitation (NDPE) — close some of those loopholes. But only a fraction of certified palm oil meets those standards.

Domestic demand is the new frontier

For years, the focus was on cleaning up supply chains for export markets in Europe and North America. Pressure from buyers worked: major brands committed to deforestation-free palm oil, and export-linked deforestation fell.

But now, 67% of Indonesia's palm oil deforestation is driven by domestic consumption.² Indonesia's biodiesel mandate requires blending palm oil into diesel fuel. That creates massive domestic demand that isn't subject to the same scrutiny as exports.

Biofuels are marketed as green energy, but when the palm oil in them comes from cleared rainforest, the carbon footprint is worse than fossil fuels. The policy meant to reduce emissions ends up accelerating deforestation.

What replaces palm oil?

Boycotting palm oil sounds simple. The reality is harder. Palm oil is efficient. Replacing it with soy, sunflower or rapeseed oil would require far more land to produce the same amount of oil.¹ That could just shift deforestation elsewhere.

The better approach is demanding certified, truly deforestation-free palm oil and supporting policies that protect forests while allowing sustainable production. Alternatives exist — coconut oil, shea butter, algae-based oils — but they come with their own trade-offs in cost, land use and environmental impact.

The solution isn't to replace palm oil. It's to stop clearing forests for it.

Learn about approaches that work: deforestation solutions.

Your shopping basket, their habitat

Every product with palm oil in it is connected to a supply chain that, somewhere along the line, involves land-use decisions in Indonesia or Malaysia. Most of the time, you won't know whether that supply chain is clean or not. Labels like "RSPO certified" help, but they're not a guarantee.

The most reliable labels are RSPO Next, NDPE commitments from specific companies, or third-party certifications like Rainforest Alliance that include independent forest monitoring. Short of that, you're trusting the brand.

But individual choices alone won't solve this. What moves the needle is policy: governments enforcing forest protection laws, biodiesel mandates being reformed to exclude deforestation-linked palm oil, and import regulations like the EU's Deforestation Regulation (EUDR) that ban products tied to recent forest loss.

Read about the EUDR and how it works: EU Deforestation Regulation explained.

Palm oil doesn't have to destroy forests

Malaysia's lower deforestation rate shows it's possible to produce palm oil without clearing rainforest. Indonesia's 2024 low shows that when enforcement is strong, clearing drops. RSPO certification, when done rigorously, cuts deforestation by a third.

The crop itself isn't the problem. The clearing is. And the clearing happens because enforcement is weak, because subsidies reward expansion over sustainability, and because domestic biofuel demand creates a market that doesn't care about forests.

Palm oil is in your shopping basket. Forests and orangutans are paying the price. The question is whether buyers, governments and producers will close the gap between commitments and reality before the last forests are gone.

Watch the film to see the stakes. Then decide how the story ends.

Questions people ask