The Oil Palm

The Sustainable Oil

Land Use Policy

Malaysia observes strict regulations governing expansion of oil palms, with agriculture expansion limited to land zoned for agriculture. 23.95 percent of Malaysia’s land bank is zoned for agriculture development. In contrast, more than 55 percent of Malaysia’s land is identified for permanent conservation. This balance ensures that Malaysia’s economic development does not come at the expense of the environment and the nation’s biodiversity. The oil palm’s high yields ensures that even with only 6 million hectares of land under cultivation, Malaysian small farmers are able to prosper.

Less Land

Only 0.26 hectares of land is required to produce one tonne of oil from palm oil while soybean, sunflower and rapeseed require 2.2, 2 and 1.5 hectares, respectively, to produce one tonne. Palm oil producers also expect to increase their yield per hectare. In Malaysia, as part of the country’s National Key Economic Areas (NKEA) to achieve high-income status by 2020, the government is looking to support increased efficiencies, such as increasing yields by 90 percent.

World Area of Oil Crop (mil ha)

Palm Oil occupies only 14.7 mil ha, while accounting for almost 1/3 of globally traded vegetable oils.

Carbon Facts

The EU and the US have both attributed inaccurate and discriminatory GHG savings values (19 percent and 17 percent, respectively) to palm oil, thereby denying access to both countries’ biofuels markets.

Independent research carried out by the Malaysian Palm Oil Board (MPOB) and unaffiliated experts demonstrate that the values should be much higher. MPOB attributed 60.4 and 74.7 percent GHG savings to palm produced with and without methane capture. Drs Pehnelt and Vietze found more accurate values to be between 38 and 41 percent for palm oil produced without methane capture, and 85 percent when produced with methane capture.

These assessments do not reflect the most recent findings on deforestation and emissions. According to research by Winrock International, a US consultancy, emissions from deforestation are between 50 and 25 percent of previous estimates. These findings would significantly lower the emissions associated with land conversion, thereby further improving the GHG savings impact of palm oil.


Processing palm oil yields high volumes of byproducts, particularly biomass. While historically these were used to support fertilizing of oil palms, other applications are also being discovered, particularly in the form of second generation biofuels.

Empty fruit bunches (EFB) are being processed to produce bio-oil, a substance similar to crude oil. Bio-oil has the potential to be refined much like crude oil, yielding basic materials necessary for bio-diesel, bio-gasoline, and bio-jet fuel. The process of refining also has the potential for generating electricity through co-generation.

Palm oil mill effluent (POME) is already yielding enormous benefits for the industry and local communities. By capturing the effluent and trapping methane emissions, the industry is further limiting its GHG emissions (already low by the vegetable oil sector’s standards), and is using the emissions it captures to power their mills.

Excess power, which is abundant, is then fed into local community electricity grids, providing critical power to rural communities, and offering an alternative to coal powered generation.

As of today, only 12 mills in Malaysia have embarked on the development of biogas plants. Biogas plants will be developed at the 500 mills over the next 10 years, with 250 mills targeting to supply electricity to the national grid by 2020.