Deforestation and the Palm Oil Industry in Indonesia & Malaysia

 by Alice Collins

Palm oil has emerged as one of the most popular vegetable oils around the globe, due to its low cost and high efficiency, and with the market generating around $4.8 billion in 2020, and estimated to reach $57.2 billion by 2022, it is a rapidly growing industry. However, this is not without effect on the environment. In most cases, plant oil plantations exist on previously forested areas, and therefore have required extensive deforestation to make space for them. As a result, they have lead to a decline in the biodiversity of these areas, as well as contributing to larger scale problems such as climate change.

 Globally, there are an estimated 17 million hectares of plant oil plantations along the equator , with over 84% of these being located in the countries of Indonesia and Malaysia. And with these countries having some of the highest levels of biodiversity in the world, the impacts of these plantations can be particularly devastating. The physical process of deforestation often involved the immediate destruction of many organisms’ habitats, whether this is through methods of felling or fires, therefore dramatically reducing their chances of survival by removing their shelter and food sources. An example of this is the Orangutan populations in Sumatra, which have now been classified as ‘Critically Endangered’ as a result of the extensive deforestation which has taken place to make space for plantations such as those of Palm oil. The removal of their natural habitats (rainforests) dramatically reduces their food sources, and may lead to them moving into agricultural territory in search of food, putting then at risk from conflict with farmers and poachers. 

As well as heavily influencing biodiversity, the creation of palm oil plantations in Indonesia and Malaysia majorly contribute climate change. Plantations are often created on land which was previously peat swamp forests, which have the ability to store enormous amounts of carbon. Therefore, the removal and destruction of these habitats releases enormous volumes of CO2 to the atmosphere-one of the most potent greenhouse gases. It is estimated that between 16.6 and 27.9% of all of Indonesia and Malaysia’s greenhouse gas emissions are the result of this conversion of peatland to palm oil plantations . Additionally, palm oil plantations which replace rain-forested land also contribute to climate change and global warming because Palm Oil trees absorb much less CO2 in comparison to tropical rainforest trees. 1

The replacement of tropical forests with Palm oil plantations also leads to the expansion of monoculture- the cultivation of a single crop. This massively reduces the biodiversity within an ecosystem, and leads to a much lower index of diversity. Monoculture of palm oil trees also dramatically increases the risk of soil erosion because they allow much more rainfall to reach the floor and wash layers of soil away. This in turn can lead to flooding because the soil is no longer able to absorb rainfall fast enough