Deforestation & Palm Oil

The relation between palm oil and deforestation

Zooming into the role of palm oil in forest loss, FAO data shows, that palm oil has contributed to an estimated 5% of tropical deforestation in tropical areas. When looking at global deforestation, palm oil contributes to 2.3% of global deforestation (The European Commission). A part of this expansion has taken place on land that was previously used for growing other crops like coffee or rubber (The European Commission).

Palm oil deforestation continues to decline

In 2022, Chain Reaction Research (CRR) has again identified a decreasing trend for deforestation linked to palm oil. According to its most recent publication on this topic, deforestation linked to palm oil in Indonesia, Malaysia and Papua New Guinea ‘has fallen to its lowest level since 2017’. These countries accounted for 84,2 percent of the global palm oil production in 2020 (EPOA & IDH 2020). This declining trend has also been identified by other organizations, such as WWF and the World Resources Institute (WRI), over the past years.

Why a slowing trend?

This decline is, according to the WWF and WRI, the result of strengthened law enforcement, moratoria, certification of palm oil plantations and corporate zero-deforestation commitments. Government initiatives in Indonesia and Malaysia introduced in the past years to combat deforestation, such as a permanent moratorium on primary forests and peatland conversion or stricter forest laws.

In addition, corporate actions such as the No Deforestation, No Peat and No Exploitation commitments (NDPE) have been introduced on an increasing scale by the palm oil industry. Likewise, CRR also notes the implementation of NDPE policies and adds COVID-19 related restrictions as possible factors behind this decline in recent years. Finally, certification standards as the RSPO do now include a ban on any deforestation or peat clearing.

Challenges ahead

    While deforestation from large scale plantations is declining, deforestation from small scale farmers is increasing. It is crucial to accelerate this slowing trend in industrial plantations and eliminate deforestation. In addition, as outlined by a recent study of the WWF, remaining deforestation in Indonesian Borneo is also associated with pressure from smallholders that do not have zero-deforestation commitments or other voluntary commitments. It is therefore key to ensure that small scale farmers can engage in corporate and government actions to combat deforestation. For more than 3 million small farmers worldwide, palm oil is an important income source. Increasing the socioeconomic benefits while deforestation is key, for example by providing trainings to increase their yield and productivity.

    Source: Austin et al. (2019): What causes deforestation in Indonesia?