What is palm oil?

Palm oil is an indispensible part of our daily lives: the WWF estimates that palm oil is an ingredient in around 50 per cent of all supermarket products – from detergents and lipstick to ice cream and sausages. In addition, much of the palm oil that is produced ends up in our vehicles in the form of biofuel.

The oil palm

Palm oil is produced from the fruit of the oil palm (Elaeis guineensis). Humans have used it in their diet for more than a thousand years. The oil palm, which was originally native to Africa, is now grown in almost all the tropical regions of the world. The main plantation areas are in Indonesia and Malaysia. In 2019 these two countries produced around 62.3 million tonnes of palm oil (IndexMundi, 2020). Indonesia alone has 11.7 million hectares of land planted with oil palms – an area equivalent to almost all the farmland in Germany. Oil palm cultivation is also expanding in South America and Africa. For example, IndexMundi calculates that Ecuador’s Peru’s annual output of palm oil increased by more than 7% in 2019. This puts Ecuador in ninth and Peru in the twentieth place in the ranking of palm oil producing countries.

The oil palm is a highly versatile plant. It takes between three and five years for a tree to reach its full commercial potential. After four to six years the yield stabilises, and not until the tree is about twenty years old does productivity slowly decline. The old palms are then replaced by new ones. An adult oil palm produces clusters of fruit weighing more than 20 kg about 15 times a year; the fruit grow in large, dense infructescences or bunches. On account of its high yield, which averages 3.69 tonnes per hectare, as well as other characteristics that make it of interest to industry, the oil palm is now the most successful and by far the most productive of all oil plants (see WWF Deutschland, ‘Auf der Ölspur’, 2016). Furthermore, the oil palm is robust and generally free of pests and diseases.

Valuable oils are obtained from both the flesh and the kernel of the oil palm fruit: palm oil from the fruit flesh and solid palm kernel oil from the seed of the fruit.

Palm oil

Palm oil is obtained from the yellow or orange-coloured flesh of the fruit. Shortly before harvesting the oil content of the fruit is at its highest – between 45 and 50 per cent. After harvesting the ripe fruits are sterilised and pressed. This yields crude palm oil (CPO).

Palm oil has many useful properties. It is semi-solid at room temperature and so does not need to be chemically hardened. It is also neutral in taste and very stable when heated; it has a long shelf life and makes foods particularly spreadable. On account of these properties palm oil is used in products as diverse as margarine, convenience foods, baked goods and confectionery, as well as in the manufacture of candles, cosmetics, soaps and detergents. Because of these unique natural characteristics, it is very difficult to find substitutes for palm oil.

Almost 72 per cent of the world’s palm oil is used in food production (IISD, 2020). Another ten per cent is used as a biofuel. The remaining 18 per cent is used in cosmetics, soaps and detergents, candles, or as a lubricant in industry.

The world’s largest producers of palm oil: Malaysia and Indonesia

According to the United States Department of Agriculture (USDA, 2020), global production of palm oil in 2019 totalled almost 74 million tonnes – of which just over 20 per cent (15.58 million tonnes) was from sustainable production. This required 23 million hectares of land, or roughly 1.5 per cent of all the world’s farmland. After Indonesia and Malaysia, which supply about 84 per cent of the palm oil on the world market, the largest producers of palm oil are Thailand, Colombia and Nigeria.

The largest importer of palm oil is India (19 per cent), followed by the European Union (15 per cent, 7.3 million tonnes) and China (14 per cent) (Index Muni, 2020). The largest users of palm oil are India (9.4 million tonnes) and Indonesia (6 million tonnes) – countries in which palm oil is traditionally used for cooking. The EU is the third-largest consumer of palm oil. Germany’s direct imports of palm oil are declining with a total around 1.12 million tonnes in 2017, with an additional 695,000 tonnes being imported as constituents of other finished and semi-finished products. Germany accounts for less than two per cent of global palm oil consumption.

Palm kernel oil

Although they are obtained from the same fruit, palm oil and palm kernel oil have very different properties. Because of its consistency, palm kernel oil is used mainly in the confectionery industry. It is valued as a carrier for flavours and vitamins that could not be incorporated into food without it. On account of the special properties of palm kernel oil – which are not found in any other vegetable oils except coconut oil – there is also strong demand for it from the cosmetics and detergents industry. Palm kernel oil is used in cosmetic products such as skin creams and lipstick. Shampoos, soaps and detergents contain substances known as tensides that are derived from palm kernel oil.

Where is palm kernel oil used?

According to the United States Department of Agriculture (USDA, 2020), around 20 million tonnes of palm kernel oil were produced in 2019. Direct imports into Germany totalled around 0.43 million tonnes, with a further 0.09 million tonnes entering the country as constituents of other finished and semi-finished products. This is less than eight per cent of the quantity traded worldwide (MEO Carbon Solutions, 2016). 

More than 120,000 tonnes of the palm kernel oil imported into Germany was also consumed here. The largest users in 2015 were the manufacturers of detergents, cleaning products and cosmetics industries, who accounted for almost 80,000 tonnes. Palm kernel oil is also used in the food sector (almost 30,000 tonnes) and the chemical and pharmaceuticals industries (approx. 15,000 tonnes). Consumption of palm kernel oil in the food sector has declined significantly – by almost 25,000 tonnes – since 2013, but use in the detergents, cleaning products and cosmetics industries has increased by about 10,000 tonnes in the same period.

Derivatives of palm oil and palm kernel oil

Palm oil and palm kernel oil can be modified through complex chemical conversion processes. This produces derivatives such as tensides and emulsifiers that can be used in cosmetics and detergents. Emulsifiers make it possible to combine two liquids that would normally separate – such as oil and water. Tensides are detergent substances. The derivatives of palm oil and palm kernel oil are widely used ingredients for which it is currently almost impossible to find usable alternatives with comparable properties.