12 June 2018

Where does our oil come from?

June 12, 2018

40% of the world‘s palm oil is produced by smallholder farmers.

The global palm industry has grown at enormous speed during the past decades. 24 million hectares of Indonesia’s rainforest has been destroyed between 1990 and 2015 says the latest Greenpeace report – an area almost the size of the UK. Far from being satisfied, the demand for palm oil and palm kernel oil is still rising. Palm kernel oil - made from kernels of the palm fruit - is an important renewable raw material to produce home and personal care ingredients. BASF is one of the biggest processors of palm kernel oil worldwide with a footprint of more than 500,000 metric tons. To produce these volumes, an area of 785,000 hectares is needed.

Awareness about the consequences of palm plantations for tropical forests and peatland, local communities and labor rights has increased among the stakeholders in the supply chain. With our latest BASF Palm Progress Report highlighting figures on our palm sourcing and tracing back its origins we aim at making the palm supply chain more transparent. In addition, we gain insights from working with smallholders on the relevance of good agricultural practices.

But more needs to be done to make progress and to reach the timebound plans – many companies have committed themselves to get to certified palm until 2020. And we have taken measures to contribute to the industry transformation: In 2018, we have initiated a major shift of our specialty portfolio for personal care and will only offer palm-based specialty ingredients for the personal care market that are certified as sustainable. “This is an important milestone for the cosmetics industry’s progress towards sustainable palm – and some of our customers have already made the step,” says Xavier Susterac, BASF Personal Care Europe.

Birgit Hellmann
Global Sustainability Communications
Last Update 12 June 2018