Palm Oil

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Palm oil—one of nature’s most sustainable crops

Palm oil, the most widely used vegetable oil in the world, is an extremely important commodity. Because palm oil plantations are highly labor intensive, the crop production also provides a livelihood to millions of people in small, tropical agricultural communities around the world.

Sustainability at the plantation level

With the global population growing to an estimated 9 billion by 2050, palm oil will remain a crucial part of food production in the future. Palm is the most efficient land-use crop. Of all vegetable oils, palm oil has—by far—the highest oil-yield-per-hectare: 7-10 times higher than other vegetable oil crops.

Because of palm's benefits, palm plantations have helped thousands of farm families achieve middle-class living standards. Palm can be harvested year round and doesn't deplete the soil, and every part of the plant can be used for oil or biomass.

Our parent company, IOI Group, has always been at the forefront of sustainability practices. The company vigorously maintains a zero-burning policy and was one of the first companies to ban the use of the herbicide paraquat. The RSPO “principles and criteria” document further defines how palm can be grown responsibly on plantations and without compromising labor conditions or the interests of nature conservation.

We are committed to sourcing and processing traceable and certified sustainable palm oil. Sustainable is defined as certified by RSPO or an equal standard. Traceability will guarantee that we know and trust the source of the palm oil. We are concerned by deforestation, loss of biodiversity, and the use of peat lands, all issues associated with palm oil production on plantations. We work with the RSPO, our suppliers, our customers, and NGOs to assess how we can improve on RSPO’s existing principles and criteria addressing these and other emerging issues. See our sustainable palm oil sourcing policy.

Sustainability at the palm oil mill

Palm fruits are harvested in bunches at plantations and transported to mills. A palm oil mill usually receives fruit from several plantations. The palm fruit is separated from the woody hull and fibers and the oil is pressed out, while the palm kernel goes to a palm kernel crushing plant. Every part of the palm fruit is used: palm kernel shells and the fibers of empty fruit bunches are used as biomass. At the mills of IOI Group, 98% of the energy used to create steam during the milling process is generated on-site.

Traceability

Crude palm oil (CPO) often takes multiple steps on its journey from mill to refinery. Stops often include a tanker farm, a loading port, and an ocean tanker. At every step in the supply chain, CPO might be mixed with materials from other sources, which makes traceability incredibly complex. IOI Loders Croklaan’s rigorous tracking process ensures that materials can be followed back to the source. We are committed to sourcing and processing traceable and certified sustainable palm oil. Sustainable is defined as certified by RSPO or an equal standard. Traceability will guarantee that we know and trust the source of the palm oil.

Sustainability at the refinery

Crude oil is treated and processed according to the needs of the customer. Some crude oil is sold immediately, while some is sold in bulk after the first few refining steps as RBDPO (refined bleached deodorized palm oil). For specialty applications (e.g. bakery, confectionery) the oil can be further refined and fractionated depending on the customer’s specific recipe.

Our downstream sustainability program focuses on increasing the share of certified sustainable palm oil, increasing the traceability of our sources, and reducing the consumption of energy and water.