Whether it's in sweets, cosmetic products or delicatessen foods, palm oil has become the all-purpose oil of the West's consumer society and many industries would grind to a halt without it.
"It's mainly because palm oil has properties that separate it from vegetable oils and which are crucial to industrial processes," said Peter Feller of the Federation of German Food and Drink Industries.
The plant's high yield makes it attractive. A hectare of palm oil brings in six times more oil than a hectare of canola, making it a far cheaper resource. But as beneficial as palm oil is for industry, it has also had a detrimental effect on the environment.
The damages of palm oil are seen in Indonesia, the world's largest exporter of the product. Indonesia's palm oil industry clears about one million hectares of rainforest to plant palm, while also earning a profit on wood from the tropical forests.
Danger to biodiversity
The companies' policy of cultivating monoculture palm plants also endangers biodiversity in the region, according to Germanwatch's Clemens van de Sand.
"In the palm oil plantations you come across just 10 percent of the types of birds you would expect in the region," he said.
The impact of palm plantations on local farmers also goes unnoticed, van der Sand said.
"The interests of small-scale farmers, some of whom live from the forest, are not taken into account at all," he added. "They are just driven out."
Indonesia's peat soil also absorbs large amounts of carbon dioxide, which is emitted when the forests are dried and its remains are burnt away.
But Indonesia isn't the only country relying on palm oil to support its economy. Thailand, Colombia, Brazil, Nigeria, Liberia and Uganda are also increasing their palm oil production to meet growing demand.
The demand comes largely from Western countries where it is used to produce energy in. A German law, for example, calls for 10 percent of automobile fuel to come from renewable sources by 2020.
Although European rules prohibit biofuel crops that have been sourced unsustainably, current regulations do little to address the "indirect" effect of land-use changes, according to Jos Dings, head of the Brussels-based organization Transport and Environment.
"What happens now is all the so-called sustainable palm oil is used for biofuels because other palm oils are not allowed, so all the rest is going to the food and to the cosmetic industry," said Dietmar Oeliger from the German Nature Conservation Union, or NABU. "In the end it changes nothing."
"Biofuel and biomass currently account for only a small part of palm oil consumption but it's a sector with a lot of growth potential," said Corinna Hözel, a forest expert for the environmental group Greenpeace.
Companies and non-government organizations agreed in 2003 to a set of standards for so-called sustainable palm oil. The agreement prohibited plantations in rain forests, called for the adherence to local laws, respect for indigenous people as well as social and environmentally responsible production.
But many companies sold palm oil under a sustainable label without adhering to the conditions they helped create, according to Hölzel.
"It's important that more is invested in regulation," van de Sand said. "When you recognize that it's a global market worth $30 million but only $500,000 is spent a year checking, it's clear that it won't be enough."
The use of sustainable palm oil in Germany is only required in biofuels. No limits have been placed on the food industry, which account for about 90 percent of palm oil consumption.
Private consumers also do not have the means of checking where the oil they buy comes from, which is a step Hölzel said needs to be made.
"The current labeling practices are insufficient," she said. "All it says is 'from plant and animal oils' but not where it comes from."
But even if labeling is improved, it may be enough to have a major impact on the environment. Current palm oil demand worldwide is about 50 million tons a year, but only four million tons carry the current sustainable label.
Author: Nicolas Martin / sms
Editor: Nathan Witkop