Is oil palm a threat or opportunity for Peru's forests?

Oil palm is the world's main source of edible oil, supporting rural incomes but also driving deforestation and other impacts. As new production regions emerge, understanding the links between sustainability and governance- ranging from government regulations to market demands -is essential. We examined Peru's oil palm sector, focusing on the main producing Regions, San Martin and Ucayali. We quantified palm expansion, associated deforestation, and the role of a key land-use policy tool. Then, through 30 stakeholder interviews, we identified factors driving palm expansion and its impacts, highlighting pathways for a deforestation-free sector. We found that Peru's oil palm sector is largely supplied by smallholders, but becoming profit-oriented and industrializing quickly. Except from specific large deforestation events, oil palm has not yet been a dominant deforestation driver in Peru, but risks persist that it could become one. These risks include low yields, weak land-use governance, and land tenure issues that promote expansion over productivity gains. Furthermore, the land-use, tenure and forestry policies that could address these risks suffer from incoherencies and weak implementation and enforcement, particularly in Ucayali. Global sustainability standards are the main sustainability lever at present, but many others require stronger public-private collaboration. We propose a public-private agenda to align stakeholders towards sustainable oil palm. With sustainability becoming a competitive factor globally, Peru has an opportunity to integrate its palm sector into responsible supply chains. However, urgent action is needed to strengthen multi-stakeholder platforms and implement locally tailored deforestation control strategies before the opportunity window closes.