Why palm-oil production is going green

By Economist.com

WHAT do lipstick, ice cream and orangutan-suited activists have in common? Palm-oil. This cheap and versatile material is in about half the stuff on the world's supermarket shelves. Close to sixty million tonnes of it are consumed each year, and demand is growing fast.

But the palm-oil industry has a bad reputation. Over the last three decades, growers have cut down huge swathes of South-East Asia’s tropical forests and drained valuable peatlands to make room for new plantations. That has contributed to climate change, destroyed the habitats of endangered species and driven indigenous people from their lands.

In 2004 some growers, traders and buyers introduced a certification scheme to reward firms who cleaned up their act. Critics have said the standards are too meek. But sales of certified palm oil have doubled in the past three years; it now makes up one-fifth of all supply.

Lately many big firms have made new commitments beyond what the certification requires. This is in large part due to environmental campaigners, who have urged Western consumers not to buy well-known products from companies such as Unilever and Nestlé unless the firms can prove that all the palm oil they use is sourced sustainably, or soon will be.

A few of these companies have therefore asked scientists to produce a clear definition of what palm growers should do to expand the industry without further frying the planet. The researchers' draft recommendations, published in June, rule out the use of all virgin forests, most forests that have been only partially-cleared, and so-called 'secondary' forests—those that have been cleared but allowed to grow back for 20 years.

While big producers with Western buyers could adopt the measures, smaller ones with lots of Asian clients may not—and those make up over half the industry. Governments may be forced to incorporate the recommendations into national law. If that happens, palm oil could finally shift its reputation and become a model for sustainable agriculture.