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Is palm oil putting your supply chain at risk? Not only could palm oil alternatives mitigate sourcing challenges, but they might also help you meet your consumers’ sustainability demands.

A recent study found palm oil is one of five ingredients likely to deter personal care consumers from purchasing products.¹ Media coverage has extensively highlighted palm oil and the deforestation required to farm it, worsening consumer perceptions.

Palm oil alternatives could help derisk your supply chain, meet consumer demands, and satisfy emerging requirements defined by the EU Deforestation Regulation (EUDR).

Address key challenges in sourcing palm oil and how you can adapt. to discover palm oil substitutes for personal care product formulas.

Several hurdles pose a significant threat to global personal care supply chains, including:

1. Regulations can complicate palm oil sourcing
   It’s daunting to keep up with ever-changing regulations. Starting December 30, 2024, the European Union (EU) will require manufacturers to provide documentation that the area of production, down to geographical coordinates, adheres to local social and environmental regulations.²
   Businesses must demonstrate that their products are “deforestation-free,” produced according to the country’s relevant legislation and covered by a due diligence statement, among other requirements. Failure to meet the rules can result in product confiscation and fines of at least 4% of a company’s annual turnover in the EU.³
   For the EUDR, reliance on suppliers and certification bodies will be critical to meet regulatory requirements.
2. Extreme weather could affect business productivity and damage goods
   Floods, monsoons, and other extreme weather events can disrupt palm oil supply chains and negatively impact business operations. Even heavy rainfall can negatively impact agricultural production & distribution, and excess humidity can spoil or damage vulnerable goods in cargo containers.
3. Geopolitical tensions could cause palm oil shipments to be re-routed and delayed
   The Suez Canal is the shortest maritime route linking Asia and Europe, typically accounting for around 15% of global maritime trade volume. Christian Roeloffs, the CEO of Container xChange, said, “A huge amount of Europe’s energy supply, palm oil, and grain come through the Suez Canal Waterway.”⁴ However, recent attacks on vessels in this area caused companies to reroute their ships, resulting in delivery delays and increased costs.⁵
4. Transport consolidation can lead to rising costs and limited access to palm oil
   The cost of shipping by sea freight rose from $2K to $15-20K per trip during the pandemic.⁶ This sparked investment in new ships to ensure access, followed by consolidation post-pandemic. Transport consolidation negatively affects shipping costs and limits timely access to reliable resources, causing bottlenecks in the supply chain.

Fortunately, you have options available to navigate supply chain disruption while offering more sustainable alternatives, including:

Bio-based feedstock on a mass balance approach provides manufacturers with reliable palm oil substitutes. Shell Chemicals’ portfolio of bio-based Shell NEODOL® alcohols and ethoxylates, Shell NEODENE® linear alpha olefins, and Shell IPA C+ ensure supply availability and consistency.

Our portfolio of products offers reliable supply assurance with various certification options to meet your needs. Several Shell NEODOL products are EPA CleanGredient approved, and many are also listed on the EPA Safer Choice Ingredient List.

Shell Chemicals' team of R&D technologists provide expertise to customers formulating with Shell NEODOL, Shell NEODENE, and Shell IPA C+. Formulators can rely on these products to provide the desired characteristics for palm oil replacement without sacrificing performance.

Several grades provide the desired emollient characteristics that palm oil offers⁸, including:

1. Shell NEODOL 45 and Shell NEODOL 5 are suitable emollients in skin care formulations. Beyond that, they provide viscosity control and emulsion stability.
2. Shell NEODENE 6 and Shell NEODENE 8 can be used as intermediates to produce emollients like 1,2-hexanediol and 1,2-octanediol (Caprylyl Glycol).
3. Shell IPA C+ is non-oily and lightweight for topical skincare products, leaving skin feeling clean, dry and smooth.

Ready to get started? Speak to a sustainability expert today to discover more about using bio-based feedstock as a palm oil alternative.

Sources

¹ _{Foresight Factory Study. February 2023}

² _{https://green-business.ec.europa.eu/deforestation-regulation-implementation_en}

³ _{https://www.lexology.com/library/detail.aspx?g=5df35e51-d20a-416d-8411-d3ffdde9258b#:~:text=The%20EUDR%20places%20significant%20penalties,access%20to%20the%20EU%20market.}

⁴ _{https://www.cnn.com/2023/12/19/economy/oil-price-inflation-red-sea-attacks/index.html}

⁵ _{https://unctad.org/publication/navigating-troubled-waters-impact-global-trade-disruption-shipping-routes-red-sea-black}

⁶ _{https://e360.yale.edu/features/how-climate-change-is-disrupting-the-global-supply-chain}

⁷ _{https://www.carbontrust.com/our-work-and-impact/guides-reports-and-tools/greenhouse-gloss-is-the-beauty-industrys-commitment-to-tackling-climate-change-more-than-skin-deep}

⁸ _{https://www.weleda.com.au/magazine/nature/palm-oil-and-the-beauty-industry}

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