Key takeaways: What Is Palm Oil and How Does It Affect Forests?

• Palm oil turns up in close to 50 percent of the packaged products on supermarket shelves, from chocolate and bread to shampoo and lipstick.
• Oil palm produces up to nine times more oil per unit area than other major oil crops, so replacing it would demand four to 10 times more land.
• On the island of Borneo, at least 50 percent of all deforestation between 2005 and 2015 was linked to oil palm development.
• Planting 52 islands of native trees inside a working plantation raised biodiversity without lowering yield, a sign that restoration can share ground with production.

How Palm Oil Is Reshaping the World's Rainforests

Palm oil is lurking in your kitchen right now, in the chocolate, the cookies, the bread, the microwave popcorn. It’s in the bathroom, too — the shampoo in the shower, the hand soap on the counter, and the lipstick in the vanity. It is the most widely used vegetable oil in the world, pressed from a tree so productive that no other oil crop comes close, and its spread across the tropics has reshaped both the global pantry and the rainforests that once stood where plantations now grow. Palm oil feeds billions of people and it has cost some of the planet's richest forests, and the most hopeful part of its future is how much of that future involves putting forests back.

What Is Palm Oil?

Palm oil is an edible vegetable oil pressed from the fruit of the oil palm, Elaeis guineensis, a tree native to West Africa and now grown across tropical Asia, Latin America, and Africa. Semisolid at room temperature much like coconut oil, it is a staple cooking oil in parts of Africa and Southeast Asia and a near-invisible workhorse ingredient almost everywhere else.

How is palm oil made and used?

A single oil palm yields two distinct oils. The fleshy fruit is pressed into palm oil, which goes into soap, cosmetics, candles, biofuels, and industrial lubricants, and the seed inside is crushed for palm kernel oil, which turns up in margarine, ice cream, chocolate, cookies, bread, and pharmaceuticals. Even the pressed cake left behind has a second life as cattle feed. That versatility, along with a long shelf life and a smooth texture, is why the ingredient became so difficult to avoid.

Where does palm oil come from?

Production is heavily concentrated. Indonesia and Malaysia together account for more than 85 percent of global supply, with the rest spread across West Africa, Thailand, Colombia, and a growing footprint elsewhere in Latin America. The crop is not only the domain of sprawling corporate estates; smallholders grow around 40 percent of the world's palm oil, which means any durable solution has to work for farmers tending a few hectares, not just for companies managing large concessions.

Palm oil vs. other vegetable oils

What sets oil palm apart from soybean, sunflower, and rapeseed (canola) is sheer productivity. It produces about 35 percent of all vegetable oil on less than 10 percent of the land devoted to oil crops. A mature plantation yields roughly 3.5 to 4 tonnes of oil per hectare, against about 1.8 tonnes for rapeseed in Europe and well under 1 tonne for soybean in Brazil, according to the IUCN Oil Palm Task Force. Shift the world's demand onto a lower-yielding crop and the total land footprint grows rather than shrinks.

Why Palm Oil Is Hard to Replace

Palm oil’s efficiency has made it central to both the global food supply and the economies that produce it. It appears in close to 50 percent of packaged supermarket products, and for millions of households in Asia and Africa it is simply the everyday cooking oil. Because alternatives would need four to 10 times more land to deliver the same volume, the environmental question isn’t on its use, but, critically, how it is grown.

The International Union for Conservation of Nature reached the same conclusion in its assessment of the crop. "When you consider the disastrous impacts of palm oil on biodiversity from a global perspective, there are no simple solutions," said Inger Andersen, then director general of the IUCN, in a statement. "Half of the world's population uses palm oil in food, and if we ban or boycott it, other, more land-hungry oils will likely take its place. Palm oil is here to stay, and we urgently need concerted action to make palm oil production more sustainable, ensuring that all parties – governments, producers and the supply chain – honour their sustainability commitments."

Palm Oil and Deforestation

The productivity that makes oil palm valuable is also what makes its expansion so damaging, because new plantations have so often replaced primary rainforest, some of the most biodiverse habitats on Earth. The IUCN calls oil palm expansion a major driver of deforestation and habitat degradation across tropical Asia and parts of Central and South America, and the Borneo record puts a figure on it: at least half of all deforestation there over a recent decade traced back to the crop.

"Palm oil is decimating South East Asia's rich diversity of species as it eats into swathes of tropical forest," said Erik Meijaard, lead author and chair of the IUCN Oil Palm Task Force, in a 2018 IUCN report. "But if it is replaced by much larger areas of rapeseed, soy, or sunflower fields, different natural ecosystems and species may suffer. To put a stop to the destruction, we must work towards deforestation-free palm oil and make sure all attempts to limit palm oil use are informed by solid scientific understanding of the consequences."

The damage compounds when plantations move onto peat. Draining waterlogged tropical peatland releases carbon that took millennia to build up, and a study in Nature Communications found that converting peat swamp forest to oil palm nearly doubles a site's warming impact, climbing from about 1,435 to 2,744 tonnes of carbon dioxide equivalent per hectare over a plantation's 30-year lifespan. Land that once locked carbon away steadily gives it back to the atmosphere.

Palm Oil and Reforestation

Across the same regions cleared for plantations, the work of bringing forests back is already underway. One Tree Planted supports peatland restoration in Sebangau National Park, a 570,000-hectare expanse of peat swamp forest in Central Kalimantan, on Borneo. Parts of it were drained for palm oil, and much of it burned in 2015, when fires took 83,000 hectares that September. By the end of 2024, the project had planted 225,000 trees across nearly 278 hectares of burned ground, employing close to 300 local Indigenous residents since 2022 to raise seedlings, replant, and guard against the fires that keep the peat from recovering.

Efforts like it are multiplying. After the catastrophic fires of 2015, Indonesia created a peatland restoration agency charged with rewetting and restoring 2 million hectares of degraded and burnt peatland within five years, the kind of work that turns a carbon source back toward a carbon sink. Elsewhere, growers are mixing native species into working farmland through agroforestry, planting forest buffers along rivers, and restoring corridors that reconnect patches of habitat split apart by plantations.

Some of the most striking work is happening inside the plantations themselves. On Sumatra, a research team planted 52 islands of native trees using six local species across a commercial oil palm estate and tracked the plots for five years. Biodiversity and ecosystem functioning climbed, and yield held steady, overturning the assumption that every square meter returned to forest is a square meter lost to the harvest.

"Our results show that the industry can benefit from this measure," Delphine Clara Zemp of the University of Neuchâtel, the study's lead author, said in an announcement of the findings. "There is real potential to develop these ecological restoration practices on a large scale." Her colleague Holger Kreft of the University of Göttingen described what makes the effort unusual. "Our approach to ecological restoration goes a step further and is unique in the world because it takes place against a backdrop of industrial-scale oil palm plantations over large areas," he said.

Reforestation Trends in Palm Oil

Reforestation and ecological restoration are fundamentally transforming palm oil from an industry defined by environmental destruction into a model for climate-resilient agriculture. Driven by shifting international regulations, strict corporate climate commitments, and innovative landscape strategies, reforestation is no longer just a corporate social responsibility checkbox; it is reshaping how palm oil is financed, cultivated, and managed globally.

The future of palm oil is being rewritten by reforestation trends across four primary dimensions:

1. The Rise of "Wildlife-Friendly" Agroforestry

The traditional practice of growing palm oil in dense, single-crop industrial blocks is giving way to mixed ecosystem farming.

• Integrated Landscapes: Organizations like the conservation group Hutan are actively piloting agroforestry models that plant native forest trees directly into existing oil palm landscapes.
• Yield Resilience: Early scientific data show that mixing native forest species among palms does not harm palm productivity. In fact, some mixed plots exhibit better leaf growth than conventional monocultures due to improved soil health and natural nutrient cycling.
  
  

2. "Intensification" Over Expansion

Global policy and corporate frameworks are shifting the focus from expanding land footprints to maximizing the productivity of degraded land.

• Restoring Degraded Forest Zones: In nations like Indonesia, millions of hectares of designated forest zones are heavily degraded or entirely deforested. Future development is pivoting toward developing palm-based agroforestry specifically to restore these inactive lands rather than clearing pristine jungles.
• Producing More with Less: Because oil palms produce up to 10 times more oil per hectare than other vegetable crops like soybean or rapeseed, maximizing yields via smart replanting programs allows the industry to satisfy global demand while leaving maximum space for natural forest regeneration.

3. Re-Foresting Corporate Supply Chains (NDPE)

Over the last decade, major global brands and refiners covering over 80% of Southeast Asian refining capacity have committed to strict "No Deforestation, No Peat, No Exploitation" (NDPE) policies.

• Regenerative Mandates: Leading palm oil entities, such as SD Guthrie, are going beyond zero-deforestation by actively incorporating large-scale carbon sequestration and reforestation targets — planting millions of native trees across conserved plantation buffers.
• Market Access Limitations: Regulatory frameworks like the European Union Deforestation Regulation (EUDR) require total geotagged traceability back to the exact plot of land. Palm oil produced on recently deforested land is effectively locked out of premium global markets, making active forest preservation and landscape restoration an economic necessity for survival.
  

4. Smallholder Inclusion and Funding

Independent smallholders produce roughly 40% of the world’s palm oil supply but are historically the most vulnerable to climate and market shifts.

• Landscape-Level Adaptation: Collaborative networks (like the Aceh Sustainable Palm Oil Working Group) bring multinational brands together to fund local smallholder training.
• Financed Replanting: Government-backed initiatives, such as Indonesia's Smallholder Replanting Program (PSR), provide structural banking frameworks to map plots and replace old, unproductive palms with high-yield varieties. This prevents small-scale farmers from encroaching into protected forests out of economic desperation.