Improving palm oil awareness in China

Awareness-raising by civil society is beginning to bear fruit, with plenty of potential in instant noodles and personal care
<p>People browsing cosmetics and skincare products at a shopping mall in Chengdu, Sichuan province (Image: Alamy)</p>

People browsing cosmetics and skincare products at a shopping mall in Chengdu, Sichuan province (Image: Alamy)

“Remember, recently you got in the habit of checking the list of contents whenever you buy something? Thanks to that little act of yours, nature is already changing…”

At the COP15 biodiversity talks in Montreal last December, WildBound, a Chinese educational non-profit, launched a game about orangutans and palm oil called Forest Life.

Players, in the roles of ordinary consumer, palm oil company executive and small-scale farmer, generate varying impacts on orangutan habitats and biodiversity according to how they consume, invest and produce.

In recent years, Chinese civil society organisations have undertaken various initiatives to raise consumer awareness of palm oil. The commodity is not yet a public issue in China, with most people unaware of its use in their products, much less worrying about its sustainability. WildBound’s chief impact officer, Mingyi Lu, calls rectifying this “a long-term job.” She adds that, while challenging, “it is by no means impossible.”

Chinese consumers are becoming increasingly aware of the environmental and social impacts of their consumption choices, as the government pushes forward to its goals of peaking national carbon emissions by 2030 and reaching net zero before 2060. This is the situation presented in the Sustainable Consumption Report 2022, jointly published by SynTao and Jiemian News. Consumers in the 21–40 age bracket, who are more open to paying a premium and willing to share their experiences, are more likely to be guided by low-carbon messaging. However, the report notes that the great majority of sustainability certification and markings are not yet widely applied, including those for palm oil.

Palm oil is invisible to consumers

China is the world’s second largest importer and third largest consumer of palm oil. Imports were around 7 million tonnes annually in 2020 and 2021, mainly coming from Indonesia and Malaysia.

Despite high demand for palm oil, there is little demand in China for the sustainably produced, premium-priced stuff. Only about 1% of China’s palm oil imports are certified as sustainable, according to a 2020 report by the UNDP (United Nations Development Programme). While a WWF study in 2021 found that around 4–7% of palm oil consumed there was certified by the leading standard-setter, the RSPO (Roundtable on Sustainable Palm Oil).

The low demand is partly attributable to lack of consumer awareness. Some 80% of the palm oil imported into China is used in the food industry, but many Chinese consumers don’t know they are eating it. A 2018 consumer survey conducted by WWF Beijing found that of 5,000 respondents, 46% had never heard of palm oil, let alone its links to deforestation.

Palm oil is rendered invisible on the Chinese market by unspecific labelling. In the European Union, since 2014, food products must reveal specific vegetable oils, including palm oil, on their labels. While as the law stands in China, as in many other countries, the general term “vegetable oil” is enough. In addition, multiple derivatives of palm oil are used in household and personal care products, usually without any indication that palm oil is among the raw materials, leaving consumers in the dark.

How to make palm oil more visible?

Palm oil is not much discussed by the public. When initial concerns arose, they focused on health considerations. In 2005, an instant noodles brand advertised under the slogan “Healthier, not deep-fried”. This started to put the presence of palm oil in instant noodles onto consumers’ radar. Public concern, however, was limited to whether palm oil’s high saturated-fat content posed a health risk, with the ‘people’s health network’, an online information service run by the People’s Daily newspaper, noting that “while excessive intake of saturated fatty acids is not healthy, the body still needs them in moderation”.

The low level of palm oil knowledge among the general public makes it harder to reach consumers through awareness-raising and advocacy. As Mingyi Lu of WildBound explains, to attract involvement such initiatives generally have to be presented within the framework of biodiversity and forest conservation.

In 2020, RSPO and WildBound joined forces to launch Changemakers for Nature. Co-founders Isabel Nepstad and Songqiao Yao initially wanted to take young people to the Amazon to witness deforestation and experience for themselves the importance of protecting forests and biodiversity.

Due to the pandemic, participants had to learn instead through online and offline courses and then create their own impact-driven projects and solutions. The courses included knowledge relating to sustainable palm oil.  One of the participants, Yang Yang, produced a short film on the sustainable palm oil initiative, Behind the Shelves, which has been viewed over 1 million times across Chinese social media and video platforms, according to Changemakers for Nature.

(Video directed by Yang Yang for WildBound, used here with permission)

The biggest problem in promoting certified sustainable palm oil in China is finding products that contain it, says Mingyi Lu. This means they can only promote the concept without matching it to the corresponding products and purchasing scenarios. Even when consumers agree on the importance of sustainable palm oil, it is hard for them to make practical changes in how they shop.

Changemakers for Nature has been encouraging businesses to produce sustainable products. But companies have found the process of sourcing sustainable palm oil convoluted, with long lead times and inflexibility in terms of quantities. It is not simply a matter of telling an upstream supplier “I’ll take a few barrels first to give it a try”. One way or another, companies have lost interest, preferring to wait until the supply chain becomes more robust before trying again.

In addition to educating young consumers, they have also opted to work with Nanjing’s Hongshan Forest Zoo, incorporating messaging about sustainable palm oil into the zoo’s Orangutan Care Week Garden Party. Mingyi Lu believes that seeing orangutans at the zoo gives visitors a connection with them, making advocacy more effective. The Forest Life game described at the top of this article likewise starts with conserving orangutans, promoting the importance of making sure palm oil is sustainable for protecting them. But the roles played by the user, of palm oil executive and farmer, also link directly into supply chain issues.

Interestingly, Mingyi Lu thinks that to a certain extent, the low awareness of Chinese consumers also shortens the “understanding path” when promoting sustainable palm oil. “In some countries and regions, palm-oil-free products are considered more sustainable. When sustainable palm oil is promoted to them, consumers will subconsciously reject it, fearing it will be ‘greenwashing’. In China, on the contrary, since consumers do not know much about palm oil, we can talk about the concept of sustainable palm oil and the RSPO system while informing them how common palm oil is in our life.”

Can companies guide consumers?

The premium for certified sustainable palm oil ranges from 3–30%. If consumers have low awareness and are unwilling to pay that premium, this deters companies, focused on their bottom lines, from investing.

However, interviews with Chinese companies conducted by CDP China for a report in 2020 indicate that companies are increasingly aware of the risks, and potential long-term cost to supply chain resilience, of unsustainable palm oil.

Large companies can both build up domestic suppliers of sustainable palm oil and, through promotion and publicity, boost consumer awareness
Fang Lifeng, Head of RSPO China

The report found that felling of forests for oil palm releases large amounts of carbon dioxide, fuelling climate change, and the resulting changes in precipitation and increasingly severe extreme weather can lower the quantity and quality of palm oil production. Changing weather patterns associated with climate change are forecast to reduce oil palm yields by 13.4%, threatening the stability of supply chains, according to the report.

This also exposes companies to reputational risks as consumers become more aware of sustainability and recognise the negative impact on the environment of unsustainably sourced palm oil. If increasing numbers of companies can become aware of these long-term costs, and be less risk-averse, this would favour the development of sustainable palm oil.

Fang Lifeng, head of RSPO China, says that with more than 300 member companies in China, the organisation is focusing its main efforts on further raising industry awareness and knowledge of sustainable palm oil, and mobilising more companies to procure it. If a few leading enterprises are willing to inform and guide consumers at the same time as sourcing sustainable palm oil, that will elevate consumer awareness, stimulating yet more companies in the sector to source sustainable products.

Promoting sustainable palm oil through instant noodles and cosmetics

A quarter of China’s palm oil imports are used to produce instant noodles, and worldwide more than 70% of personal care and cosmetics products now contain one or more palm oil derivatives. Starting with these two sectors, there is good potential for promoting certified sustainable palm oil to Chinese consumers and raising their awareness.

In its 2022 annual report, Master Kong, which has nearly half of the instant noodles market in China, stated: “We are committed to reducing the negative impact of packaging and palm oil procurement on forests… 43.8% of palm oil suppliers in the Instant Noodles Business have obtained Roundtable on Sustainable Palm Oil (RSPO) certification.” The statement could be misleading as Master Kong is not a member of the RSPO, and the proportion of its suppliers that are RSPO certified does not reflect the proportion of certified oil it buys.

A customer buys instant noodle at a supermarket
A customer shops for instant noodles at a supermarket in Huaibei, Anhui province (Image: Alamy)

According to a WWF report on palm oil, also from 2022, the costs to companies of transitioning to sustainable palm oil and working with certification bodies include membership, assessments, audits, documentation, training and the premium paid for certified palm oil. The report estimates that, on average, the burden for businesses is negligible, at US$0.0009 per 70g packet of instant noodles.

However, as Fang Lifeng explains, competition in the Chinese instant noodle industry is fierce, with tight gross margins. This does not mean that there is no room for transformation in the sector. Some Japanese instant noodle companies have already pledged 100% use of sustainable palm oil. In the end, it comes down to how willing companies are to act, and what their long-term business objectives are.

Cosmetics consumers, by contrast, are more tolerant of premium prices. WWF’s 2018 consumer survey showed that people were generally willing to accept a premium of 6–10% for sustainable palm oil, especially for cosmetics and personal care products. With the trend towards sustainable cosmetics, the make-up and personal care sector offers a potential point of entry for raising consumer awareness.

Such cosmetics have taken off in China in recent years. In 2021, Tmall Global, an e-commerce platform for international brands to sell directly to Chinese consumers, defined the concept of “clean beauty” products, including use only of RSPO-certifed palm oil. Environmentally friendly “clean beauty” brands were widely embraced by consumers, with January-to-June sales in the category rising by over 600% year-on-year.

Speaking at the 2021 International Cosmetics Innovation Focus Conference in Shanghai, an RSPO representative said: “A survey of the north-east Asia market, with a sample size of 400, revealed that the decisions of approximately 91.5% of consumers considering a cosmetics purchase are driven largely by product contents. The sustainability of those contents is also a major factor”.

Fang also observed that awareness of sustainable palm oil as an important component of products is gradually spreading through the personal care and beauty sector, and industry stakeholders are increasingly open to discussion of the topic.

Homegrown brands came late to this industry in China, and the market is mostly dominated by international beauty brands. In 2021, French personal care company L’Oréal had the biggest share of the Chinese cosmetics market, at around 12.2%, and 100% of the palm oil procured by L’Oréal is RSPO certified.

Says Fang Lifeng: “With international brands making commitments and driving action along supply chains in the Chinese market, many Chinese companies have come to realise the added reputational risks – both domestically and internationally – they will face if they don’t take steps to source sustainable palm oil. At the same time, by moving first, large companies can both build up domestic suppliers of sustainable palm oil and, through promotion and publicity, boost consumer awareness.”

This article is part of our ongoing series on palm oil. Explore the series to date here.