Single largest palm oil import to the US goes unaccounted for in the global supply chain
A new report released today by Rainforest Action Network (RAN) reveals that millions of tons of palm oil are hidden in the form of animal feed, which is now the single largest palm oil product category imported to the United States. RAN’s analysis also revealed that the world’s ten largest dairy processing companies and many global consumer goods companies are not currently accounting for palm oil-based animal feed in their supply chains or including it in their commitments to be “deforestation-free”. Largely used as an additive for dairy cow feed, this palm oil then becomes “embedded” in products like milk, cheese, chocolate, or ice cream.
This means that the claims made by major food companies like Danone, Ferrero, Mars, Nestlé, and Mondelez of having 100% –– or nearly 100% –– deforestation-free supply chains are at best inaccurate, or at worst misleading, as they fail to account for the large amount of palm oil entering their supply chains through animal feed.
“The scale of the issue is really alarming,” said Daniel Carrillo, Forest Campaign Director with Rainforest Action Network (RAN) and a lead author on the report. “The palm oil supply chain is so notoriously problematic and for palm oil-based animal feed, it’s even worse. From the exporters and importers to the brands using milk from palm oil-fed cows in their products –– no one is tracking where this palm oil is coming from. No one can say if this palm oil contributed to deforestation or human rights abuses or not.” According to recent reports, palm oil contributes more to tropical deforestation than any other commodity consumed by Americans.
Titled “Feeding Deforestation: How millions of tons of palm oil are hidden in animal feed”, RAN’s report analyzed more than 30,000 shipments entering the United States in 2022 — the country and year for which the most complete data was available — and found that 36% (nearly two million tons) of all palm oil imports into the US by weight were made up of feed grade palm oil products, making it the single largest imported palm oil product category in 2022.
The report further evaluated the published policies of over 50 global companies that are among the most exposed to the trade, manufacturing, or use of palm oil-based animal feed products. The investigation revealed that thirteen out of the 14 global dairy processing and consumer goods companies analyzed do not provide information about how much palm oil-based animal feed is used in their supply chains or include embedded palm oil in the scope of their purchasing policies –– so-called ‘No Deforestation, No Peatland, No Exploitation’ (NDPE) policies. The leading policy standard in the sector, an NDPE policy should ensure that there is no Conflict Palm Oil anywhere in a company’s supply chain and many companies with NDPE policies in place champion themselves and their products as “deforestation-free”. Similarly, the vast majority of major exporters or importers of palm oil-based animal feed do not have public NDPE policies. The Consumer Goods Forum — the biggest industry forum for manufacturers of consumer-based products — also fails to recommend that its members ensure their NDPE procurement policies apply to embedded palm oil and account for palm oil-based animal feed.
Because the exporters of palm oil-based animal feed to the US are the same companies that export to the EU, the research also suggests that European importers of the animal feed will run afoul of the impending EU Deforestation Regulation (EUDR), which requires companies trading in forest-risk commodities like palm oil to ensure that their products are not linked to deforestation, down to the plantation level. This could be of particular concern to companies profiled within the report that source milk or dairy products in Europe or have significant operations within the EU, like Arla, Danone, Ferrero, Friesland Campina, Fonterra, Lactalis, Mars, Mondelēz, Nestlé, and Ferrero.
“Now, with the problem exposed, brands must take real action to prevent further human rights violations and deforestation for palm oil throughout their complete supply chain. Any company that continues to make deforestation-free supply chain claims without taking steps to account for embedded palm oil runs the risk of outright lying to consumers, investors, and other stakeholders,” said Carrillo.
For the full report and methodology used visit: https://www.ran.org/publications/feeding-deforestation/