Yes, several oils and fats can replace palm oil in cooking, baking, and food manufacturing. The best substitute depends on what you’re making and why you want to switch. Coconut oil, butter, and blends of common vegetable oils all work in different contexts, though none of them perfectly replicate every property that makes palm oil so widely used.
Why Palm Oil Is Hard to Replace
Palm oil sits in a sweet spot that few other fats occupy naturally. It’s semi-solid at room temperature, stable at high heat, neutral in flavor, and cheap. That combination is why it shows up in everything from cookies and margarine to soap and lipstick. Any substitute needs to match at least some of those properties, and no single oil matches all of them.
There’s also the efficiency problem. Oil palm trees produce about 3.04 tons of oil per hectare annually. Sunflower and rapeseed each yield roughly 0.75 tons per hectare, and soybeans produce just 0.44 tons. That means switching to another crop oil requires roughly four to seven times more land to produce the same amount of fat. This is the central tension in the palm oil debate: the crop that causes deforestation in Southeast Asia is also, by a wide margin, the most land-efficient oil crop on the planet.
Best Substitutes for Home Cooking and Baking
For everyday cooking, the simplest swaps are oils you likely already have in your kitchen.
Coconut oil is the closest match in texture. It’s solid at room temperature and melts cleanly, making it a good stand-in for palm oil in pie crusts, cookies, and frostings. The refined version has a neutral taste; unrefined (virgin) coconut oil adds a noticeable coconut flavor. Use it in a 1:1 ratio.
Butter works well in baked goods but adds moisture and milk solids that palm oil doesn’t have, so results will differ slightly. Cookies may spread more, and pastries will taste richer. For recipes that call for palm shortening specifically, a blend of half butter and half coconut oil (by volume) mimics the texture more closely than either one alone. So for one cup of palm shortening, use half a cup of butter and half a cup of coconut oil.
Olive oil replaces palm oil in savory cooking without any fuss. It won’t work in recipes that need a solid fat, but for sautéing, roasting, or salad dressings, it’s a straightforward swap at the same quantity. Its flavor is stronger, which is a benefit in some dishes and a drawback in others.
Vegetable shortening made from soybean or canola oil can replace palm-based shortening in baking at a 1:1 ratio. Check the label, though. Many commercial shortenings still contain palm oil as an ingredient.
Substitutes in Processed Foods
If you’re reading ingredient labels and trying to avoid palm oil in packaged products, the reality is more complicated. Food manufacturers rely on palm oil not just for its fat content but for the specific way it behaves: it keeps chocolate from melting in your hand, gives margarine its spreadability, and extends the shelf life of crackers.
The food industry replaces palm oil through a process called interesterification. Engineers blend fully hardened versions of common oils (like soybean or rapeseed) with liquid oils, then chemically rearrange their fat molecules. The result is a fat that melts at body temperature, stays firm at cooler temperatures, and works in spreads, fillings, and confections without the trans fats that older hydrogenation methods produced. Many “palm oil free” margarines and shortenings on store shelves use this technology.
Shea butter and cocoa butter also serve as replacements in specialty applications like chocolate and cosmetics, though both are significantly more expensive.
Emerging Alternatives From Fermentation
A newer approach skips farming entirely. C16 Biosciences, a company spun out of MIT, produces an oil from yeast cells grown in fermentation tanks, similar to how beer is brewed. The yeast consumes sugar and produces a fat with properties comparable to palm oil. As of 2023, the company was manufacturing metric tons of this oil (branded as Torula Oil) in 50,000-liter tanks.
The catch is cost. Torula Oil is currently a premium product, priced well above conventional palm oil. The company has said it expects costs to drop as production scales up. For now, the oil is targeted at cosmetics and personal care products. Using it in food requires additional regulatory approval that hasn’t been secured yet, so you won’t find it in grocery stores anytime soon.
Price and Practicality
Palm oil is one of the cheapest cooking oils on the global market, which is a major reason it dominates. Soybean oil, its closest competitor by price, traded at roughly $1,004 per metric ton in early 2025. Palm oil typically runs cheaper still, and the gap widens further when compared to coconut oil, olive oil, or specialty fats like shea butter.
For home cooks buying a jar of coconut oil or a block of butter, the price difference is modest and unlikely to matter. For food manufacturers reformulating products at industrial scale, swapping out palm oil raises costs significantly. That economic reality is why palm oil remains in so many products despite growing consumer demand for alternatives.
Choosing Based on Your Goal
Your best substitute depends on what you’re optimizing for. If you’re baking at home and want a similar texture, coconut oil or a butter-coconut blend is your most reliable option. If you’re avoiding palm oil for environmental reasons, look for products using interesterified rapeseed or soybean oil blends, but keep in mind that these crops need far more land to produce the same volume of fat. Certified sustainable palm oil, sourced from plantations that meet deforestation-free standards, is another route some people prefer over switching oils entirely.
If your concern is health, the substitution math changes again. Palm oil is about 50% saturated fat. Coconut oil is roughly 82% saturated fat, making it a worse choice by that metric. Olive oil and canola oil are much lower in saturated fat but can’t replicate the solid texture palm oil provides. Butter falls somewhere in between. No single alternative wins on every front, so the tradeoff you’re willing to make determines which swap makes sense for you.