Me (as commentator): In this discussion, ChatGPT and I are working together to create a better world for palm oil and orangutans.
It started with a trip to Costa Rica with my brother. He shared with me the environmental destruction caused by the demand for palm oil. Then, I witnessed it firsthand in Malaysia—vast stretches of oil palm plantations stretching endlessly across the landscape. When I read about similar plantations in Indonesia, the enormity of palm oil’s impact became impossible to ignore. It’s present in everything—from chocolate bars to biofuels. That’s when I turned to ChatGPT for answers.
Me: How does the global supply chain for palm oil operate? What are the net benefits and environmental costs, particularly in Malaysia and Indonesia?
ChatGPT: Palm oil is one of the most widely used vegetable oils worldwide, and it is used in processed foods, cosmetics, and industrial applications. Its supply chain follows a structured path: cultivation in tropical climates, harvesting and processing into crude and refined products, and global distribution to major markets like China, India, the EU, and the U.S. Sustainability efforts, such as RSPO (Roundtable on Sustainable Palm Oil) certification, exist, but their effectiveness varies.
Palm oil has undeniable advantages. It yields far more oil per hectare than alternatives like soybean or rapeseed, making it incredibly efficient. It supports millions of jobs, particularly in Malaysia and Indonesia, and its affordability makes it a staple in global food security. However, the environmental cost is steep.
Clearing rainforests for plantations has threatened species like orangutans and Sumatran tigers. Draining peatlands releases vast amounts of CO₂. Monoculture farming depletes nutrients, and runoff from pesticides pollutes rivers. Land grabs and exploitative labor practices continue to be widespread.
The problem is complex. Palm oil is too efficient and economically embedded to remove, yet its environmental impact calls for accountability. Stricter regulations, improved land management, and consumer demand for sustainable sourcing could help tip the scales.
Me (as commentator): That brings up another question. Is it good for you?
Me: What health effects and issues are associated with palm oil?
ChatGPT: The health impact of palm oil varies based on its form and consumption method. Unrefined (red) palm oil is abundant in carotenoids and vitamin E, providing antioxidant benefits that promote eye health and alleviate oxidative stress. It also features a balanced fat profile that is more stable than polyunsaturated oils but less harmful than trans fats. Its high smoke point makes it perfect for cooking without generating harmful free radicals.
However, refined palm oil, which is commonly found in processed foods, presents a different narrative. Excessive consumption may elevate LDL cholesterol levels and heighten the risk of heart disease. The processing removes beneficial nutrients, and repeated heating can generate toxic compounds associated with inflammation and metabolic disorders. Additionally, there are concerns about contaminants such as 3-MCPD, a potential carcinogen present in certain refined palm oils.
Palm oil can be part of a balanced diet in moderation, particularly in its unrefined form. However, its use in ultra-processed foods contributes to broader public health concerns, making alternative oils like olive or avocado oil preferable for those worried about cardiovascular health.
Me (as commentator): By now, a broader theme was emerging—one that connected economics, politics, and the environment. Once again, I reflected on Why Nations Fail, a book that examines how extractive political and economic institutions eventually collapse under their own weight. Our relationship with nature, especially in industries like palm oil, has become similarly exploitative.
Me: How does the framework of extractive versus inclusive institutions apply to palm oil? Can the industry transition to a sustainable model?
ChatGPT: The traditional palm oil industry mirrors extractive institutions. Power and profits are concentrated in a few hands, while environmental and social costs are externalized. Short-term gains drive deforestation, land seizures displace communities, and monopolistic control leaves small farmers at a disadvantage. These systems appear profitable, but their foundations are unstable. Degraded land loses productivity, regulatory pressure mounts, and climate change disrupts supply chains.
A shift toward inclusivity would align economic incentives with environmental health. Agroforestry and polyculture could replace monoculture, maintaining biodiversity and soil fertility. Smallholder cooperatives would ensure fair profit distribution, preventing land grabs. Stronger land rights and environmental regulations would safeguard both people and ecosystems. Carbon taxes and sustainability incentives could make responsible practices more financially viable.
Emerging technologies could play a crucial role in this transition. Blockchain enhances supply chain transparency, ensuring that palm oil labeled as sustainable is verifiably sourced from ethical producers. AI-driven monitoring can analyze satellite imagery to detect illegal deforestation in real time, enabling quicker enforcement of conservation laws. Consumer awareness tools, such as apps that scan product barcodes to provide sustainability scores, empower shoppers to support ethical brands. These innovations bridge the gap between policy and action, fostering an industry that benefits both people and the planet.
Once satellite data confirms land use compliance, blockchain records transactions from plantation to refinery. Farmers upload geotagged proof of sustainable practices (e.g., reforested areas, legal permits). Each step in the supply chain is logged on an immutable blockchain ledger, preventing fraud. Consumers scan QR codes on products to verify deforestation-free palm oil origins.
Organizations like Global Forest Watch (GFW), NASA, and the European Space Agency (ESA) use satellites to monitor forests. Radar-based satellites can see through clouds, even in rainforests. Buyers can verify if a plantation is inside a deforestation-free zone.
Such changes would preserve rainforests and wildlife and create long-term economic stability, ensuring that palm oil remains a viable industry without destroying the land it depends on.
Me: What would prevent people from cheating the system?
ChatGPT: Once satellite data confirms land use compliance, blockchain records transactions from plantation to refinery. Farmers upload geotagged evidence of sustainable practices (e.g., reforested areas, legal permits). Each step in the supply chain is recorded on an immutable blockchain ledger, preventing fraud. Consumers can scan QR codes on products to verify the origins of deforestation-free palm oil.
In 2021, a Malaysian palm oil supplier was discovered to be selling “certified sustainable” palm oil that was actually sourced from illegally deforested areas. The fraud was uncovered through blockchain traceability, AI-driven satellite monitoring, and chemical fingerprinting.
The supplier claimed their palm oil was Roundtable on Sustainable Palm Oil (RSPO) certified, and they forged documents to show compliance. The company purchased palm oil from illegal plantations (including deforested peatlands) and mixed it with genuine certified palm oil at the refinery. They manipulated geolocation data to create the illusion that the palm oil originated from legal farms. GPS spoofing was employed to forge transport records.
A European buyer using blockchain-based supply chain tracking noticed inconsistencies in shipment data. The timestamps didn’t match transport records from the supposed “sustainable farms.” AI-powered satellite imagery (from Global Forest Watch and NASA) detected recent deforestation near the supplier’s reported farms. Machine learning flagged the sudden land use change as suspicious. A DNA-based oil fingerprinting test showed that the oil came from different soil and climate conditions than the claimed certified farms. This revealed the illegal plantations’ true origins.
The palm oil company lost its RSPO certification, and its EU contracts were canceled. Malaysian authorities imposed a fine on the company for fraudulent practices. Buyers began requiring blockchain-based traceability for every shipment. The industry started using satellite verification and AI monitoring as standard anti-fraud tools.
Me (as commentator): The conversation left me without easy answers, but it provided a clearer understanding. Palm oil isn’t inherently bad—it’s our methods of production and consumption that determine whether it becomes a force for progress or destruction. The challenges facing the industry are political, ethical, and economic, yet technology offers solutions to create an inclusive palm oil industry. History has shown us that extractive systems don’t endure. The real question is whether practices will change course significantly enough to have an impact before the system collapses under its own weight.
Author’s Note: Credits to ImageFX for the cover image. ChatGPT for the conversation. Grammarly for the corrections.