Delivering the Sustainable Development Goals (SDGs) requires balancing demands on land between agriculture (SDG 2) and biodiversity (SDG 15). The production of vegetable oils and, in particular, palm oil, illustrates these competing demands and trade-offs. Palm oil accounts for ~40% of the current global annual demand for vegetable oil as food, animal feed and fuel (210 Mt), but planted oil palm covers less than 5–5.5% of the total global oil crop area (approximately 425 Mha) due to oil palm’s relatively high yields. Recent oil palm expansion in forested regions of Borneo, Sumatra and the Malay Peninsula, where >90% of global palm oil is produced, has led to substantial concern around oil palm’s role in deforestation. Oil palm expansion’s direct contribution to regional tropical deforestation varies widely, ranging from an estimated 3% in West Africa to 50% in Malaysian Borneo. Oil palm is also implicated in peatland draining and burning in Southeast Asia. Documented negative environmental impacts from such expansion include biodiversity declines, greenhouse gas emissions and air pollution. However, oil palm generally produces more oil per area than other oil crops, is often economically viable in sites unsuitable for most other crops and generates considerable wealth for at least some actors. Global demand for vegetable oils is projected to increase by 46% by 2050. Meeting this demand through additional expansion of oil palm versus other vegetable oil crops will lead to substantial differential effects on biodiversity, food security, climate change, land degradation and livelihoods. Our Review highlights that although substantial gaps remain in our understanding of the relationship between the environmental, socio-cultural and economic impacts of oil palm, and the scope, stringency and effectiveness of initiatives to address these, there has been little research into the impacts and trade-offs of other vegetable oil crops. Greater research attention needs to be given to investigating the impacts of palm oil production compared to alternatives for the trade-offs to be assessed at a global scale.
Over the past 25 years, global oil crops have expanded rapidly, with major impacts on land use1. The land used for growing oil crops grew from 170 Mha in 1961 to 425 Mha in 2017 (ref. 2), or ~30% of all cropland worldwide3. Oil palm, soy and rapeseed together account for >80% of all vegetable oil production, with cotton, groundnuts, sunflower, olive and coconut comprising most of the remainder (Table 1 and Fig. 1). These crops, including soy (125 Mha planted area2) and maize (197 Mha planted area2), are also used as animal feed and other products.
Oil palm originates from equatorial Africa where it has been cultivated for millennia, but it is now widely grown in Southeast Asia. Between 2008 and 2017, oil palm expanded globally at an estimated rate of 0.7 Mha per year2, and palm oil is the leading and cheapest edible oil in much of Asia and Africa. While it has been estimated that palm oil is an ingredient in 43% of products found in British supermarkets4, we lack comparable studies for the prevalence of other oils.
As a wild plant, the oil palm is a colonizing species that establishes in open areas. Cultivated palms are commonly planted as monocultures, although the tree is also used in mixed, small-scale and agroforestry settings. To maximize photosynthetic capacity and fruit yields, oil palm requires a warm and wet climate, high solar radiation and high humidity. It is thus most productive in the humid tropics, while other oil crops, except coconut, grow primarily in subtropical and temperate regions (Table 1). Moreover, because oil palm tolerates many soils, including deep peat and sandy substrates, it is often profitable in locations where few other commodity crops are viable. The highest yields from planted oil palm have been reported in Southeast Asia5. Yields are generally lower in Africa6 and the Neotropics5, likely reflecting differences in climatic conditions including humidity and cloud cover6 as well as management, occurrence of pests and diseases, and planting stock7.
Palm oil is controversial due to its social and environmental impacts and opportunities. Loss of natural habitats, reduction in woody biomass and peatland drainage that occur during site preparation are the main direct environmental impacts from oil palm development8. Such conversion typically reduces biodiversity and water quality and increases greenhouse gas emissions, and, when fire is used, smoke and haze5,9. Industrial oil palm expansion by large multinational and national companies is also often associated with social problems, such as land grabbing and conflicts, labour exploitation, social inequity10 and declines in village-level well-being11. In producer countries, oil palm is a valued crop that brings economic development to regions with few alternative agricultural development options12, and it generates substantial average livelihood improvements when smallholder farmers adopt oil palm13. Here, we review the current understanding of the environmental impacts from oil palm cultivation and assess what we know about other oil crops in comparison. Our focus is on biodiversity implications and the environmental aspects of sustainability, and we acknowledge the importance of considering these alongside socio-cultural, political and economic outcomes.
Deforestation and oil palm expansion
A remote sensing assessment found that oil palm plantations covered at least 19.5 Mha globally in 2019 (Fig. 2), of which an estimated 67.2% were industrial-scale plantings and the remainder were smallholders14. With 17.5 Mha, Southeast Asia has the largest area under production, followed by South and Central America (1.31 Mha), Africa (0.58 Mha) and the Pacific (0.14 Mha). However, the actual area under oil palm production could be 10–20% greater than the area detected from satellite imagery—that is, 21.5–23.4 Mha—because young plantations (less than approximately three years old), open-canopy plantations or mixed-species agroforests may have been omitted14. Estimates suggest that the proportion of oil palm area under smallholder cultivation (typically less than 50 ha of land per family15) varies from 30–60% in parts of Malaysia and Indonesia11 to 94% in Nigeria5.
The overall contribution of oil palm expansion to deforestation varies widely and depends in part on assessment scope (temporal, spatial) and methods. We reviewed 23 studies that reported land-use or land-cover change involving oil palm (Supplementary Tables 1 and 2). In Malaysian Borneo, oil palm was an important contributor to overall deforestation16. Here, new plantations accounted for 50% of deforestation from 1972 to 2015 when using a five-year cut-off to link deforestation and oil palm development17 (Fig. 3, Supplementary Fig. 2 and Supplementary Table 3). In contrast, one global sample-based study suggested that between 2000 and 2013, just 0.2% of global deforestation in ‘intact forest landscapes’ was caused by oil palm development18.
The degree to which oil palm expansion has replaced forests (defined as naturally regenerating closed canopy forests) varies with context. From 1972 to 2015, around 46% of new plantations expanded into forest, with the remainder replacing croplands, pasturelands, scrublands (including secondary forest regrowth) and other land uses5. Individual studies reported forest clearance ranging from an estimated 68% of tracked oil palm expansion in Malaysia and 44% in the Peruvian Amazon to just 5–6% in West Africa, Central America and South America, excluding Peru (Fig. 3). In general, oil palm expansion in the Neotropics is characterized by the conversion of previously cleared lands instead of forests19,20, although the extent to which oil palm displaces other land uses into forests remains uncertain. In Indonesia and Malaysian Borneo, industrial plantation expansion and associated deforestation have declined since approximately 2011 (refs. 21,22). However, smallholder plantings developed to support demand by industrial palm oil mills may be increasing. To date, only two studies have clearly differentiated between forest clearing by smallholders and industrial plantations (Supplementary Table 2). In Peru, an estimated 30% of smallholder plantings resulted in deforestation23, while in Sumatra, Indonesia, 39% of smallholder expansion was into forest24. While we still lack broader understanding of the deforestation impacts of smallholders24, recent studies from Indonesian Borneo show that like industrial actors, smallholders sometimes convert fragile ecosystems such as tropical peatlands into oil palm plantations25. Other oil crops have not yet been mapped globally with similar levels of accuracy, precluding detailed assessments and comparisons.
Oil palm’s direct impacts on species
The International Union for the Conservation of Nature (IUCN) Red List of Threatened Species26 documents 321 species for which oil palm is a reported threat, more than for other oil crops (Fig. 4 and Table 1). Species threatened by oil palm made up 3.5% of the taxa threatened by annual and perennial non-timber crops (9,088 species) and 1.2% of all globally threatened taxa (27,159 species) in 2019 (see Supplementary materials and Supplementary Table 4). These species include orangutans Pongo spp., gibbons Hylobates spp. and the tiger Panthera tigris. Species threat lists, however, are incomplete, as most plant groups have not been comprehensively assessed and the focus of threat studies may be biased toward certain oil crops. For example, perennial crops (oil palm, coconut and olive) might be more easily identified as a threat to a species than annual crops, because perennial crops facilitate long-term studies that are more difficult with annual crops that may not be planted every year. Also, the IUCN Red List focuses on threats in the recent past and is thus biased toward crops with recent rapid expansion. Better information is needed for all oil crops about where they are grown and how their expansion has affected, and could affect, natural and semi-natural ecosystems and biodiversity. We note that because coconut is primarily grown in tropical island nations, it stands out as a particular threat for rare and endemic species with small ranges27 (Table 1).
Oil palm plantations contain lower species diversity and abundance for most taxonomic groups when compared to natural forest28,29. Plant diversity in some plantations is less than 1% of that in natural forests28, but because oil palm is perennial, associated plant diversity may exceed that of annual oil crops (Table 1). One study found 298 plant species in the oil palm undergrowth30 and another found 16 species of fern on oil palm trunks31, while a meta-analysis of plant diversity in a range of annual crops, including oil crops, found between one and 15 associated plant species32. Plant diversity in any oil croplands also depends on management choices such as tillage, weeding and the use of herbicides or other chemicals.
Recorded mammal diversity in oil palm is 47–90% lower than in natural forest33,34 and strongly depends on the proximity of natural forests. Oil palm plantations generally exclude forest specialist species35,36, which are often those species of greatest conservation importance. For example, forest-dependent gibbons (Hylobatidae) cannot survive in stands of monocultural oil palm but can make use of interspersed forest fragments within an oil palm matrix28. Some species, although unable to survive solely in oil palm, will utilize plantations. For instance, planted oil palm in Malaysian Borneo supported 22 of the 63 mammal species found in forest habitats33 and 31 of 130 bird species37, most of them relatively common species. Oil palm in Guatemala and Brazil supported 23 and 58 bird species, respectively36,38, while 12 species of snakes were found in a Nigerian oil palm plantation39. Various species will enter plantations to feed on oil palm fruit, including palm-nut vultures Gypohierax angolensis43 and chimpanzee Pan troglodytes40 in Africa and porcupines (Hystricidae), civets (Viverridae), macaques (Cercopithecidae), elephants (Elephantidae) and orangutans in Southeast Asia41. The highest diversity of animal species in oil palm areas, however, is generally found in the wider landscape that includes remnant patches of native vegetation42,43. Factors that are likely to positively influence biodiversity values in both industrial-scale and smallholder plantations include higher landscape heterogeneity, the presence of large forest patches and connectivity among these44, and the plant diversity and structure of undergrowth vegetation. For example, in palm areas where there is systematic cattle grazing, bird and dung beetle abundance and diversity increase45,46.
Oil palm cultivation involves the introduction and spread of invasive species, including the oil palm itself (noted in Madagascar and Brazil’s Atlantic Forests47), as well as non-native cover crops and nitrogen-fixing plants (for example, Mucuna bracteata or Calopogonium caeruleum). Similarly, management of oil palm plantations can increase the local abundance of species such as barn owls Tyto alba, introduced into plantations to control rodents48. Oil palm plantations also support pests such as the black rat Rattus rattus, pigs Sus spp. and beetles, such as the Asiatic rhinoceros beetle Oryctes rhinoceros and the red palm weevil Rhynchophorus ferrugineus49. Such species can impact palm oil production negatively; for example, by reducing oil palm yields through damage to the palm or fruit predation50. They also have a range of local effects, both positive and negative for biodiversity, including animals that prey on them, such as snakes, owls, monkeys and cats51, while the extra food provided by oil palm fruits can increase pig populations, resulting in reduced seedling recruitment in forests neighbouring oil palm52.
Management within oil palm areas to retain riparian reserves and other set-asides containing natural forest may contribute to pollination and pest control within the plantation, although they may also harbour pests and disease53. Studies to date suggest overall limited, or neutral, effects of such set-asides on pest control services, spillover of pest species or oil palm yield54. There are also plenty of unknowns; for example, the African beetle Elaiedobius kamerunicus has been introduced as an effective oil palm pollinator and is now widely naturalized in Southeast Asia and America, where it also persists in native vegetation and visits the inflorescences of native palms, but its impacts, if any, are unexamined (D.S., personal observation). No systematic analysis has been conducted to assess the impact of non-native and invasive species associated with other oil crops.
Smallholder plantations tend to be smaller and more heterogeneous than industrial developments, which potentially benefits wildlife, but this remains poorly studied29. A handful of studies indicate that smallholdings support a similar number of, or slightly more, bird and mammal species than industrial plantations, see for example, ref. 55. However, species in smallholder plantations may be more exposed to other pressures, such as hunting, when compared to industrial plantations55.
Other environmental impacts
Oil palm plantations have a predominantly negative net effect on ecosystem functions when compared to primary, selectively logged or secondary forest9. The clearance of forests and drainage of peatlands for oil palm emit substantial carbon dioxide56. Oil palms can maintain high rates of carbon uptake57 and their oil can potentially be used to substitute fossil fuels, thus contributing towards sustainable energy (SDG 7) and climate change response (SDG 13). Yet, biofuel from oil palm cannot compensate for the carbon released when forests are cleared and peatlands drained over short or medium time-scales (<100 years)58. Nonetheless, the carbon opportunity cost of oil palm, which reflects the land’s opportunity to store carbon if it is not used for agriculture, is not very different from annual vegetable oil crops58 (Table 1).
Oil palm plantations and the production of palm oil can also be sources of methane59 and nitrous oxide60, both potent greenhouse gases that contribute further to climate change, although the former is sometimes used as biogas, reducing net greenhouse gas release61. Other emissions associated with oil palm development include elevated isoprene production by palm trees, which influences atmospheric chemistry, cloud cover and rainfall, although how these affect the environment remains unclear62. In addition, there is some evidence that emissions of other organic compounds—for example, estragole and toluene63—are also higher in oil palm plantations than in forest, but these emissions appear minor compared to isoprene64.
Forest loss and land-use conversion to oil palm impact the local and regional climate, although the extent of these impacts remains debated65. For example, increased temperatures and reduced rainfall recorded over Borneo since the mid-1970s are thought to relate to the island’s declining forest cover, which is partly due to the expansion of oil palm, with climate changes being greater in areas where forest losses were higher66. Indeed, oil palm plantations tend to be hotter, drier and less shaded than forests due to their less dense canopy, and often have higher evapotranspiration rates than forests67. A drier, hotter climate increases the risk of fire and concomitant smoke pollution, especially in peat ecosystems68. In addition to human health consequences (for example, respiratory diseases and conjunctivitis), such fires can impact wildlife and atmospheric processes69. For example, aerosols from fires can scatter solar radiation, disrupt evaporation and promote drought65. Few of these relationships are well-studied.
Conversion of natural forests to oil palm plantations increases run-off and sediment export due to loss or reduction of riparian buffers, reduced ground cover and dense road networks70. Streams flowing through plantations tend to be warmer, shallower, sandier and more turbid, and tend to have reduced abundances of aquatic species such as dragonflies (Anisoptera) than streams in forested areas71. Fertilizers, pesticides and other chemicals used on plantations also impact water quality and aquatic habitats72. The effluent from most modern mills is minimized, but its release into local rivers has caused negative impacts to people and to aquatic and marine ecosystems73. Some hydrological impacts may be viewed as positive: for example, construction of flood-control channels and sedimentation ponds for palm oil effluent can benefit some water birds74.
Drainage of peatlands and other wetlands to establish oil palm disrupts hydrological cycles, potentially impacting neighbouring forests and other habitats75. The protection and restoration of riparian buffers and reserves within oil palm plantations is therefore key to preserving water quality, with recent research also showing the importance of these landscape features for biodiversity and ecosystem function76. Riparian reserve widths required by law in many tropical countries (20–50 m on each bank) can support substantial levels of biodiversity, maintain hydrological functioning and improve habitat connectivity and permeability for some species within oil palm76. However, research is urgently needed regarding minimum buffer width and size requirements under different contexts for different taxa and for different oil crops.
The future of oil palm
Demand for agricultural commodities is growing. Some predict that palm oil production will accelerate across tropical Africa77. However, due to current socio-cultural, technical, political and ecological constraints, only around one-tenth of the potential 51 million ha in the five main producing countries in tropical Africa are likely to be profitably developed in the near future7, although this might change as technological, financial and governance conditions improve78. The expansion of oil palm in the Neotropics is also uncertain because of greater challenges the sector faces compared to Southeast Asia, including lower yields, high labour costs, volatile socio-political contexts and high investment costs5. Although the importance of these factors varies from country to country, in general the expansion of the palm oil industry in the Americas depends heavily on economic incentives and policies, and access to international markets.
Meeting the growing demand for palm oil1, while adhering to new zero deforestation policies79 and consumer pressure to be more sustainable, will likely require a combination of approaches, including increasing yields in existing production areas—especially those managed by smallholders1—and planting in deforested areas and degraded open ecosystems, such as man-made pastures57. These strategies span a land-sparing and land-sharing continuum, with higher-yielding oil palm cultivation sparing land and perhaps reducing overall impacts on biodiversity35, although intermediate strategies on the sparing–sharing continuum may be better at meeting broader societal goals80. Irrespective of the optimal strategy, replanting with high-yielding palms or implementing land-sharing agroforestry techniques are challenging for smallholders who often lack resources and technical knowledge, and may not be able to access improved plant varieties required to increase yields81. In such situations, provision of technical support from government agencies, non-government organizations or private companies may help smallholders choose intensification over clearing more land to increase palm oil production6.
The extent to which biofuel demand by international markets will drive oil palm expansion remains unclear. There is resistance from environmental non-governmental organizations and governments, including the European Union, the second largest palm oil importer after India5, to the use of palm oil as a biofuel to replace fossil fuels and meet climate change mitigation goals. Such resistance is related to the high carbon dioxide emissions from oil-palm-driven deforestation and associated peatland development82. Nonetheless, if oil palm is developed on low carbon stock lands, estimates suggest it may have lower carbon emissions per unit of energy produced than other oil crops like European rapeseed83. Consistent and comparable information on the extent and consequences of other oil crops is urgently required to encourage more efficient land use58.
Efforts to address the impacts of oil palm cultivation and palm oil trade have been the focus of several initiatives. For example, the two main producer countries have set up the Malaysian Sustainable Palm Oil and Indonesian Sustainable Palm Oil certification schemes, which mandate that oil palm producers comply with a set of practices meant to ensure social and environmentally responsible production. International concerns related to deforestation have been addressed through the High Carbon Stock and High Conservation Value approaches84, which are methodologies that guide identification and protection of lands with relatively intact forest or value for biodiversity, ecosystem services, livelihoods and cultural identity. These frameworks are used by producers to meet the requirements of palm oil sustainability initiatives including certification under the Roundtable on Sustainable Palm Oil (RSPO) standard. This standard was recently expanded to include protection, management and restoration of riparian areas within certified plantations as well as a prohibition on new planting on peat, and compliance with the standard is now being used to meet corporate zero-deforestation commitments5. There is evidence for positive impacts of RSPO certification achieved through improved management practices, including changes in agrochemical use, improved forest protection and reduced fires and biodiversity losses, although these effects remain small85,86.
Many producers and traders of palm oil have now committed to ‘zero deforestation’. A 2017 cross-commodity survey87 found that companies in the palm oil sector have the highest proportion of no-deforestation commitments across four commodity supply chains (palm oil, soy, timber and cattle) linked to global deforestation. Although most of these commitments have been made by retailers and manufacturers87, oil palm growers have also made such pledges. In 2018, 41 of the 50 palm oil producers with the largest market capitalization and land areas had committed to address deforestation, with 29 of them pledging to adhere to zero deforestation practices88. These commitments have been identified as a factor in declining expansion of oil palm in Malaysia and Indonesia21,22, although low commodity prices have likely also contributed21. Such private supply chain initiatives like certification and zero-deforestation commitments may be most effective in reducing environmental impacts when leveraged with public and institutional support such as plantation moratoria for certain areas and national low-carbon rural development strategies89, as has been demonstrated, for example, in Brazilian soy production90.
Land-use trade-offs among vegetable oils
While the environmental impacts of oil palm on natural ecosystems are overwhelmingly negative, such impacts also need to be considered in relation to other land uses, including competing vegetable oil commodities, all of which have their own implications for biodiversity, carbon emissions and other environmental dynamics (Table 1). Global vegetable oil production is expected to expand at around 1.5% per year between 2017 and 2027 (ref. 91), while use is projected to expand at 1.7% per year globally between 2013 and 2050 from a baseline of 165 Mt, including for use in food, feed and biofuel1. Unless demand for oil decelerates, this implies an additional production of an average of 3.86 Mt of vegetable oil per year. If this production was delivered by oil palm alone, yielding approximately 4 t of crude palm oil per ha (refs. 5,92), 35.7 Mha of additional vegetable oil production land would be needed between 2020 and 2050. If the addition instead all came from soy, yielding about 0.7 t of oil per ha (ref. 1), 204 Mha of extra land, or nearly six times as much, would be required. This simple calculation glosses over nuances of substitutability93 or differential yield increases among crops, but illustrates the magnitude of differences between land needed by oil palm and other oil crops94.
Understanding impacts is, however, not just a matter of comparing current and projected distributions and yields of different crops and thus land needs, but also requires clarifying how each hectare of land converted to an oil crop impacts both the environment and people. For example, soy is known to have a large negative impact on biodiversity, with few vertebrates occurring in this annual monoculture crop95, and is responsible for loss of high biodiversity savanna and forest ecosystems in South America96. Thus, sustainable development, including simultaneous delivery of SDGs 2 on agriculture and 15 on biodiversity (alongside contributions to SDG 7 on energy and SDG 13 on climate), must consider the wider trade-offs posed by sourcing global vegetable oils97. One key uncertainty is the extent to which demand can be met by increasing yields within established vegetable oil croplands. An additional uncertainty is whether other options, for example microalgal-derived lipids98, may soon offer viable alternatives to meet demand for biofuel.
The way forward
The expansion of oil palm has had large negative environmental impacts and continues to cause deforestation in some regions. Nevertheless, oil palm contributes to economic development5, has improved welfare for at least some people11 and can be consistent with at least some conservation goals, especially when compared to other oil crops78. There remain substantial gaps in our understanding of oil palm and the interaction between environmental, socio-cultural and economic impacts of the crop, and the scope, stringency and effectiveness of governance initiatives to address these5. None of these concerns and trade-offs are unique to oil palm: they also apply to other vegetable oil crops27,96 as well as other agricultural products99. Indeed, all land uses, and not just those in the tropics, have impacts on their environment12 that can either be prevented or ameliorated100. Pressure on the palm oil industry has, however, apparently resulted in more research on the impacts of palm oil production compared to other oils, resulting in an urgent need to better study these alternatives.
In a world with finite land and growing demands, we must consider global demands for food, fuel and industrial uses hand-in-hand with environmental conservation objectives. Oil palm’s high yields mean that it requires less land to meet global oil demand than other oil crops. However, minimizing overall vegetable oil crop impacts requires evaluation for their past, current and projected distribution and impacts, and review of their yields, global trade and uses. This information is needed to enable better planning and governance of land use for all oil crops, matching risks and opportunities with local conditions and realities, and to optimize the simultaneous delivery of the SDGs.
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The development of this situation analysis was supported by the IUCN project ‘Global Commons: Solutions for a Crowded Planet’, funded by the Global Environment Facility. D.J.B. received funding from the UK Research and Innovation’s Global Challenges Research Fund under the Trade, Development and the Environment Hub project (project number ES/S008160/1). M.P. was supported by the CNPq research productivity fellowships (no. 308403/2017‐7). J.G.-U. was funded by SNSF R4D-project Oil Palm Adaptive Landscapes.
None of co-authors in this study, except D.J.B., M.P. and J.G.-U., received funding for conducting this Review, although the information was partly based on a study funded by the Global Environment Facility. E.M., T.M.B., D.G., M.A., S.W., L.P.K., J.G.-U., K.C., N.M. and D.S. are members of and have received funding from the IUCN Oil Palm Task Force, a group tasked by the IUCN members to investigate the sustainability of palm oil. T.M.B., D.J.B., M.A., C.S. and N.M. work for conservation organizations and E.M., M.A. and M.P. have done work paid by palm oil companies or the Roundtable on Sustainable Palm Oil.
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Meijaard, E., Brooks, T.M., Carlson, K.M. et al. The environmental impacts of palm oil in context. Nat. Plants 6, 1418–1426 (2020). https://doi.org/10.1038/s41477-020-00813-w