Iceland has announced that it will become the first major UK supermarket to end the use of palm oil in its own-brand products. Boldly, Iceland says it wants to ‘demonstrate to the food industry that it is possible to reduce the demand for palm oil while seeking solutions that do not destroy the world’s rainforest’. But this has been attacked by the Council of Palm Oil Producing Countries, who say that the alternatives have worse impacts. Many retailers have already committed to sustainable palm oil use, but what difference are they making – and will avoiding it altogether end up causing negative impacts elsewhere in the supply chain?

The problem with palm oil is that it is such a useful, and cheap, product. It is found in many food products as well as other retail goods such as cosmetic products. Having exploded in popularity with manufacturers since the 1980s, it is now used in everything from detergent to chocolate, and can be found in up to half of the items sold in UK supermarkets.

To meet this huge, and still growing, demand, an increasing amount of land is set aside for palm tree plantations – mostly in Indonesia and Malaysia. To make room, rainforest is cleared – often by simply being burnt. This releases the huge amounts of carbon stored by the forests into the atmosphere, contributing to global climate change (and leading to those countries becoming some of the world’s biggest greenhouse gas emitters). Losing these ecosystems also harms local biodiversity, leaving species such as orangutans critically endangered.

The Roundtable on Sustainable Palm Oil (RSPO) was founded to stop those impacts, while fostering good outcomes for the communities close to palm oil plantations. Its view is that palm oil is an essential and irreplaceable commodity. Growing sufficient crops of alternative vegetable oil sources to meet demand would have similarly negative impacts (and indeed palm oil has a higher yield than other options, so can deliver more per unit area of agricultural land). It advocates less environmentally harmful palm oil production through certification, requiring producers to prove they meet various criteria – including avoiding clearance of forests or fragile ecosystems.

Many well-known brands, including the major UK supermarkets, have signed up to the RSPO and committed to using 100% certified sustainable palm oil (CSPO) in their own brands. However, lots of the products we buy are manufactured by organisations that have not made these commitments, and WWF scorecards show that many organisations aren’t doing enough. Nestlé in particular has faced high profile criticism for missing targets and moving goalposts.

Palm oil can also be used as a biofuel, producing lower greenhouse gas emissions throughout its lifetime than traditional fuels. Blending it with diesel brings down the carbon intensity of the product; however, this ignores any emissions or environmental damage caused by clearing the land to enable production. Initiatives to promote palm oil as a biofuel in the past have been blamed for triggering some of the worst instances of forest-burning. Recognising this, the EU parliament this year agreed to phase out the use of palm oil as a transport fuel by 2021.

Finding replacements for palm oil is a huge task, but if a business can find alternatives that really are more sustainable, and are not sourced in similarly destructive circumstances, it could force its rivals and product manufacturers to adopt a similar approach. Together with moves to take it out of the transport fuel supply chain, there is the potential to substantially curb demand. However, palm oil’s versatility and status as a commodity means that only global momentum from many different sectors can stop its continued growth. Industry buyers need to demand proof of crop sustainability, growers must increase participation in certification schemes, and opportunities for continual improvement in resource efficiency should be explored.