Due to its high yield and versatility, palm oil remains central to industries such as food, cosmetics, and biofuels. It accounts for 35% of global vegetable oil production but requires only 10% of the land for oil crops, making it more efficient than other oils like soybean and sunflower. However, according to a Nature Sustainability report, palm oil production has devastated the environment, contributing to 34% of global tropical deforestation from 1999 to 2019.

In addition to deforestation, palm oil production has been linked to 2-3% of global CO2 emissions. Peatland destruction, a major contributor, releases significant carbon stores, accelerating climate change. According to the World Resources Institute, each hectare of converted forest emits 174 metric tons of CO2. Beyond carbon emissions, palm oil plantations threaten the habitats of 193 critically endangered species, including the Sumatran orangutan.

Emerging Alternatives in Food:

The global food industry is exploring sustainable substitutes for palm oil. Below are some promising alternatives and a deeper dive into their scalability and sustainability.

• Algae Oil: Algae oil, produced from microalgae, has gained traction as an eco-friendly oil source due to its minimal land and water requirements. Unlike palm oil, algae do not need arable land, reducing the pressure on forests. Corbion, a biotechnology company, and TerraVia are at the forefront of algae oil production, with TerraVia claiming algae farming requires up to 99% less water than traditional oil crops. In addition, algae can be cultivated using industrial CO2 emissions, which helps offset its carbon footprint. Current research is focused on improving the productivity of algae strains to make algae oil a viable large-scale replacement for palm oil.

• Sunflower Oil: While sunflower oil is a common alternative, it has a high water footprint, needing 2,800 liters per kilogram of oil produced. Research into drought-resistant sunflower strains, led by organizations like the International Sunflower Association (ISA), is ongoing to reduce the environmental impact of sunflower farming. Genetically engineering crops to thrive in drier climates could make sunflower oil more sustainable and scalable.

• Shea Butter: Shea butter is increasingly used in food and cosmetics as a palm oil substitute. A report by the Global Shea Alliance highlights shea’s sustainable production model, which involves wild harvesting in West Africa, benefiting 16 million rural women. However, production is limited to around 600,000 tons per year. Research by the International Shea Study Group is exploring ways to expand sustainable shea production, including promoting the reforestation of shea trees and improving harvesting techniques.

Innovation in the Cosmetics Industry:

The cosmetics industry is likewise turning to sustainable alternatives to palm oil. Here are some emerging solutions:

• Cocoa Butter: Cocoa butter is a popular ingredient in premium skincare due to its emollient properties. Although it’s a byproduct of chocolate production, fluctuations in cocoa production due to climate change can limit its availability. Organizations such as The Cocoa Research Institute are working on improving the sustainability of cocoa plantations through agroforestry systems that maintain biodiversity while ensuring a steady supply of cocoa beans.

• Illipe Butter: Illipe butter, derived from the Shorea stenoptera tree in Borneo, is an excellent alternative to palm oil in cosmetic products. Local sustainability initiatives, such as those led by Wild Asia and Borneo Futures, promote sustainable harvesting practices that avoid deforestation and support indigenous communities. These organizations ensure that illipe butter can be sustainably sourced by developing certification standards and supporting local economies.

• Plant-Based Waxes: Candelilla and rice bran waxes offer sustainable alternatives for cosmetics, especially lip balms and lotions. The Candelilla Institute is researching ways to make harvesting more efficient and sustainable. At the same time, RiceBran Technologies focuses on refining rice bran oil processing to extract waxes for cosmetic use more sustainably. Both options are praised for their low environmental impact, but scalability remains a challenge, particularly for candelilla wax, primarily produced in Mexico and the U.S.

Solutions in Research:

Various academic and industrial research initiatives are dedicated to finding scalable and sustainable solutions to palm oil.

Synthetic Biology and Microbial Fermentation:

Researchers are exploring synthetic biology and microbial fermentation as groundbreaking methods to produce oil without relying on plants. These technologies enable the development of oils similar in structure to palm oil but produced in lab environments.

• C16 Biosciences: A New York-based biotech startup, C16 Biosciences, is using microbial fermentation to develop a lab-grown oil alternative that mimics the properties of palm oil. Funded by organizations like Breakthrough Energy Ventures, the company has focused on producing oils at scale using yeast strains. C16’s oil is expected to enter the market by 2025 and aims to offer a sustainable solution that does not contribute to deforestation.
• Calysta: Another innovative company, Calysta, is utilizing microbial fermentation to create alternative oils by converting methane into lipids through fermentation. This technology could produce oils with a much lower environmental footprint than palm oil, reducing reliance on agricultural land.

Gene Editing and Crop Improvement:

Gene editing technologies like CRISPR are deployed to develop more efficient and sustainable oil crops.

• Corteva Agriscience: As a leader in agricultural innovation, Corteva uses CRISPR to create oil crops with improved yields and reduced water and fertilizer needs. They are working on gene-edited sunflower and soybean crops to optimize oil production while minimizing environmental degradation.
• The Salk Institute’s Harnessing Plants Initiative uses gene-editing technologies to develop plants that can absorb more CO2 while producing oil. By modifying plant root structures, the Salk Institute aims to make oil crops part of the solution rather than a contributor to climate change.

Palm Oil from Cell Cultures:

Another promising research area is producing palm oil directly from plant cells grown in bioreactors, eliminating the need for large-scale plantations.

• Singapore’s A*STAR Institute of Chemical and Engineering Sciences: Researchers here are developing methods to grow palm oil cells in lab environments, producing palm oil without deforestation or monoculture plantations. This cell-based approach could revolutionize palm oil production by making it entirely land-independent.
• Xylome: This U.S.-based company is working on producing oils similar to palm oil by growing genetically engineered yeast. Xylome is leveraging biotechnology to scale oil production in bioreactors and supply industries with palm oil substitutes that don’t require land or generate the environmental toll of traditional oil crops.

Challenges and the Road Ahead:

The future of sustainable palm oil alternatives is promising but faces considerable obstacles.

1. Scalability: The alternatives discussed—algae oil, synthetic biology-derived oils, and cell-cultured oils—are not yet produced at a scale that can meet the global demand for palm oil, which currently stands at 75 million tons annually. Large-scale infrastructure development and continued research funding will be necessary to bring these solutions to market.
2. Cost: Many solutions, particularly lab-grown oils, are still significantly more expensive than conventional palm oil. For example, synthetic biology-based oils cost 30-50% more, though costs are expected to fall as production processes improve and scale up. Governments could help bridge this gap by subsidizing research and offering tax incentives to companies investing in sustainable oils.
3. Consumer and Industry Adoption: Beyond technical and financial challenges, consumer and industry acceptance is essential. Large corporations like Unilever and Nestlé have already committed to reducing their palm oil consumption by investing in sustainable alternatives. For instance, Unilever is partnering with companies like C16 Biosciences to pilot the use of microbial oil in its products. However, broad adoption will require consistent messaging about the environmental benefits of these alternatives.

Our Thoughts:

The push for sustainable palm oil alternatives is critical to reducing the environmental damage caused by palm oil plantations. While promising solutions are emerging from synthetic biology, microbial fermentation, and gene editing, the key challenge remains to scale these innovations to match the global demand for palm oil. Companies like C16 Biosciences and Xylome are leading the way with lab-grown oils, while efforts from Corteva and Calysta show that gene editing and microbial technologies hold immense promise.

The success of these alternatives will depend on continued investment in research, infrastructure development, and consumer education. Governments and industries must collaborate to support these innovations through funding, subsidies, and certification systems, encouraging the shift toward sustainable oil production.

The next part of this series will explore how specific companies, governments, and NGOs drive the development and adoption of these alternatives and what further innovations are on the horizon.