Sustainable Palm Oil Market Rises with Demand for Ethical and Green Solutions

Sustainable Palm Oil Market Size, Share and Trend Analysis

The global sustainable palm oil market size reached at USD 75.28 billion in 2024 and is anticipated to increase from USD 78.7 billion in 2025 to an estimated USD 117.36 billion by 2034, witnessing a CAGR of 4.54% during the forecast period from 2025 to 2034. The growing demand for environmental sustainability and the high efficiency of palm oil drive the global market.

Key Highlights

• By region, Asia Pacific held a major revenue share of the market in 2024, due to favorable agricultural infrastructure and the increasing population.
• By region, Europe is expected to witness the fastest growth during the predicted timeframe. The market growth is driven by the burgeoning need for sustainable palm oil and favorable government support.
• By type, the crude palm oil segment dominated the sustainable palm oil market in 2024. The easy availability of crude oil palm and high medicinal content drive the demand.
• By type, the palm kernel oil segment is expected to expand rapidly in the market in the coming years. Driven by the increasing use of palm kernel oil in non-edible purposes.
• By end use industry, the food & beverage segment held the largest revenue share of the market in 2024. The growth is driven by changing food preferences, like frozen foods, and the need for desired food texture.
• By end use industry, the personal care & cosmetics segment is expected to witness the fastest growth in the sustainable palm oil market over the forecast period. The growing demand for high-quality cosmetics contributes to the segment’s growth.
• By nature, the conventional segment contributed the biggest revenue share of the market in 2024. The conventional method is preferred due to its cost-effectiveness and high yield.
• By nature, the organic segment is expected to grow with the highest CAGR in the market during the studied years. The growing awareness of chemical-free fertilizers and environment sustainability promote the use of organic methods.
• By distribution channel, the business-to-business (B2B) segment registered its dominance over the global market in 2024. This is due to the increasing collaboration among manufacturers and suppliers.
• By distribution channel, the business-to-consumer (B2C) segment is expected to show the fastest growth over the forecast period. The advent of e-commerce platforms and high affordability promote the B2C sector.

Industry Coverage

Major Drivers of the Sustainable Palm Oil Market

Sustainable palm oil is a type of vegetable oil that is popularly used in daily cooking and other applications. It adheres to stringent regulatory standards and generates the lowest carbon emissions, thereby having a negligible environmental impact. Apart from food products, sustainable palm oil is widely used in cosmetic products, such as shampoo, toothpaste, makeup, and detergents.

The demand for sustainable palm oil is increasing due to its widespread applications in various sectors, from food to cosmetics and biofuel. The increasing population necessitates farmers to find alternative ways to produce enough palm oil in a limited area. Sustainably produced palm oils create robust livelihoods for farmers with an average income of 3-4 million.

Sustainable Palm Oil Market Trends

• Government agencies and local people are worried about the significant impacts of conventional palm oil on the environment. This encourages them to shift towards sustainable palm oil. Several research studies have shown that the average carbon footprint of sustainable palm oil is 36% lower than traditional palm oil.
• The demand for highly efficient palm oil in terms of yield per hectare augments market growth. It is reported that about one hectare of sunflowers produces 0.7 tonnes of oil, while one hectare of oil palm trees produces 3.5 tonnes of oil. Thus, sustainable palm oil fulfills the growing demand for high-quality foods.
• The potential health benefits of sustainable palm oil also make it a suitable choice for people. It has been found to protect brain function, reduce heart disease risk factors, and improve vitamin A status. This is due to the presence of nutrients and micronutrients within palm oil.

Market Opportunity

What is the Future of the Sustainable Palm Oil Market?

The market future is promising, driven by the increasing need for advanced technology in palm oil production. Information technology (IT) solutions like Geographic Information System (GIS) help in precise mapping and continuous monitoring of palm oil plantations. This allows stakeholders to track land use alterations and evaluate their response on ecosystems.

Other advanced technologies, such as artificial intelligence (AI), satellite data, and blockchain technology, also present future opportunities for sustainable palm oil production. Geolocation data is used to map smallholder farmers, while blockchain technology avoids data manipulation. These technologies bring farmers and stakeholders closer to sustainable farming with a limited land area and enhance yields.

Market Challenge

Challenges for Small-scale Farmers Hinders Market Growth

The sustainable production of palm oil requires farmers to undergo the certification process. This is financially inaccessible and too complex for smallholder farmers who produce large volumes of palm oil. This can ultimately harm their livelihoods and limit their affordability for producing sustainable palm oil, thereby shifting their practices towards conventional palm oil production. 

Sustainable Palm Oil Market Regional Insights

Asia Pacific Dominated the Global Sustainable Palm Oil Market in 2024. 

The region has a suitable agricultural infrastructure to produce large quantities of palm oil to fulfill global needs. Asia is the dominant producer and buyer of palm oil in the world. Asian countries, Indonesia and Malaysia, are the largest producers of palm oil, while China and India are the major consumers of palm oil globally. Unilever, a global food giant, purchases over 6-8% of the global palm oil production annually, mostly from Indonesia and Malaysia. The increasing population in the region and changing consumer preferences potentiate the demand for sustainable palm oil.

The United Nations Development Programme (UNDP) reported that Indonesia produces over 30 million tonnes of palm oil annually, generating 4.5% of its GDP. Indonesia contributes to 54% of global exports. The Indonesian government had launched the Indonesia Sustainable Palm Oil (ISPO) certification scheme to support its sustainable economic, social, and environmental objectives. The sustainable palm oil sector also contributes to the labor sector by employing over 16.2 million people directly or indirectly.

Europe Expects the Fastest Growth in the Sustainable Palm Oil Market in the Coming Years. 

Europe is emerging as a global hub for sustainable palm oil production and consumption. The growing awareness of sustainable farming, owing to government initiatives regarding environmental sustainability, boosts market growth. Favorable regulatory frameworks support the use of only sustainable palm oil in Europe. Government and private organizations conduct seminars, workshops, and conferences to raise awareness of sustainable palm oil and train individuals. The EU Green Deal initiative helps enhance the productivity of smallholder farmers and protect biodiversity.

ASD, IDH, and RSPO organized a “Sustainable Palm Oil Dialogue 2025: Social Sustainability in Global Supply Chains” in May 2025 in France to study how companies prevent negative social impacts in their supply chain and ensure they have a positive impact on workers and local communities. Germany’s Federal Ministry of Agriculture, Food, and Regional Identity (BMLEH) aims to produce palm oil from sustainable production and requires that no natural forest areas be cleared for its cultivation. It is reported that about 60% of the palm oil used in non-energy sectors in Germany comes from certified sustainable cultivation.

Segmental Insights

Type Insights

Which Type Segment Dominated the Sustainable Palm Oil Market In 2024?

The crude palm oil segment held a dominant presence in the market in 2024. This is due to the widespread availability of crude oil palms. Crude palm oil (CPO) is obtained by cooking, pressing, stirring, and extracting from the fresh fruit bunches (FFB). Palm oil, derived from crude oil palms, is reddish-brown in color and is predominantly used in cooking and food products. It is also used for various purposes, such as cosmetics and cleaning products. It has a strong flavor and high beta-carotenoid content, thereby potentiating its medicinal benefits.

The Palm Kernel Oil Segment Expects the Fastest Growth in the Market During the Forecast Period. 

Palm kernel oil (PKO) is a yellow-colored oil that is produced from the kernel of the oil palm tree. Several researchers have demonstrated the efficacy of palm kernel oil in improving hair growth and skin texture. PKO is also used in food products due to its stability at high cooking temperatures and a longer shelf-life.

End Use Industry Insights

Which End Use Industry Segment Dominated the Sustainable Palm Oil Market In 2024?

The food & beverage segment led the market in 2024. The increasing population and changing consumer preferences augment the segment’s growth. Palm oil is used in numerous food products, such as baked goods, spreads and margarines, fried foods, confectionery, and dairy alternatives. It provides the desired texture, mouthfeel, and consistency. The growing demand for ready-to-eat meals also potentiates the demand for palm oil. Palm oil has a neutral taste that allows snacks’ seasoning to shine.

The Personal Care & Cosmetics Segment is Expected to Grow with the Highest CAGR in the Market During the Studied Years. 

The burgeoning personal care & cosmetics sector and the versatility and adaptability of sustainable palm oil propel the segment’s growth. Palm oil is an indispensable ingredient of cosmetic products, enhancing the quality and performance of cosmetics. Palm oil and its derivatives provide diverse properties, including moisturizing and emollient properties, texture and stability, and shelf life and preservation.

Nature Insights

Why did the Conventional Segment Dominate the Sustainable Palm Oil Market in 2024?

The conventional segment held the largest revenue share of the market in 2024. The production of palm oil through conventional methods is more cost-effective and produces a higher yield compared to organic palm oil. It is also more versatile due to its neutral flavor, odorlessness, and semi-solid nature. It has higher stability at high temperatures, making it ideal for baking and frying. Conventional palm oil is used in a wide range of applications, such as food, cosmetics, and biodiesel & biofuels.

The Organic Segment is Expected to Expand Rapidly in the Market in the Coming Years. 

The demand for organic production of palm oil is increasing due to reduced risk of deforestation and high environmental sustainability. Unlike conventional methods, organic methods involve the use of natural pesticides and fertilizers, emphasizing biodiversity and soil health. Farmers are shifting to organic farming practices to focus on the health of the soil, ecosystems, and people. Government organizations also encourage people to adopt organic farming.

Distribution Channel Insights

How the Business-to-Business (B2B) Segment Dominated the Sustainable Palm Oil Market In 2024?

The business-to-business (B2B) segment contributed the biggest revenue share of the market in 2024. Palm oil is mainly used by manufacturers for the large-scale production of food products, cosmetics, and biodiesels. Purchasing palm oil directly from its manufacturers results in cost-effective, high-yield, and high-quality final products. The purchase of certified palm oil from responsible growers enables companies to help stop the destruction of forests in the region.

The Business-to-Consumer (B2C) Segment is Expected to Witness the Fastest Growth in the Market Over the Forecast Period. 

Consumers can directly purchase high-quality, certified sustainable palm oil from manufacturers. The advent of online platforms and the burgeoning e-commerce sector enable consumers to purchase palm oil from multiple vendors, irrespective of geographical barriers. B2C supply of palm oil eliminates the cost of wholesalers, benefiting consumers.

Value Chain Analysis - Sustainable Palm Oil Market

Raw Material Procurement

• Farmers procure raw materials, such as oil palm fruit and fruit’s seed, for sustainable development of palm oil. Manufacturers collaborate with stakeholders across the supply chain to procure and supply palm oil in a sustainable manner.
• Key Players: Clariant, Evonik, and Nestle Global

Distribution to Retail, HoReCa

• Manufacturers distribute RSPO certified sustainable palm oil to retail stores and the HoReCa industry. The distribution of sustainable palm oil requires multi-stakeholder, clear commitment standards, and targeted engagement across the supply chain.
• Key Players: Ferrero, General Mills, PepsiCo, and Cargill

Waste Management & Recycling

• Farmers adopt various waste management and recycling practices to contribute to environmental sustainability. The different types of waste generated from palm oil mills are empty fruit bunches (EFB), palm oil mill effluent (POME), palm kernel shell (PKS), and palm pressed fibres (PPF).

Recent Developments in the Sustainable Palm Oil Market

Onesta Ghana Ltd.

• In July 2025, the Redgold Oil Palm Plantation Project (ROPP) was launched in Ghana by Onesta Ghana Ltd. to accelerate the local production of palm oil, reducing reliance on imports. The initiative includes 10,000 hectares of land at an initial stage. (Source: myjoy online)

Johor

• Launch: In March 2025, Johor launched the Integrated Sustainable Palm Oil Complex (iSPOC) to integrate the entire palm oil industry chain within a single sustainable ecosystem. The launch strengthens the position of Johor as a global leader in sustainable palm oil production by adopting a circular economy and zero-waste approach. (Source: NST)

Sustainable Palm Oil Market Leading Companies

• Wilmar International
• Unilever PLC
• Cargill, Inc.
• SD Guthrie Bhd
• Golden Agri-Resources
• Nestle Global
• Louis Dreyfus Company
• Musim Mas
• Barry Callebaut AG
• Clariant
• Bunge Ltd.
• M.P. Evans
• Farmonaut
• Ferrero

Segments Covered in the Report

By Type

• Crude Palm Oil (CPO)
• Palm Kernel Oil (PKO)
• Red Palm Oil

By End Use Industry

• Food & Beverage
• Personal Care & Cosmetics
• Biofuel & Energy
• Pharmaceuticals
• Animal Feed

By Nature

• Conventional
• Organic

By Distribution Channel

• Business-to-Business (B2B)
• Business-to-Consumer (B2C)

By Region

• North America 
• Europe
• Asia Pacific
• Middle East and Africa (MEA)
• Latin America