Pressure is expected to mount on retailers and food manufacturers selling products containing palm oil from plantations that contribute to rainforest deforestation, after Unilever yesterday announced plans to only use palm oil that has been certified as environmentally sustainable.

The multinational giant said it is to work with industry group the Roundtable on Sustainable Palm Oil (RSPO) to begin sourcing palm oil that has been certified as meeting its new sustainability criteria. The company added that it would aim to fully trace the origins of all the palm oil it uses in Europe by 2012 and ensure that it is only sourcing certified palm oil by 2015.

Speaking at the Prince of Wales’ May Day Climate Change Summit, Unilever CEO Patrick Cescau said that the company was committed to addressing concerns that booming demand for palm oil for the use in food products and biofuels is contributing to deforestation in countries such as Indonesia where farmers have been found to be illegally clearing rainforest to make way for new plantations.

He added that the company had been working with the RSPO since its launch in 2004 and was heavily involved in the development of the criteria that will now be used to certify palm oil plantations as sustainable.

He also urged suppliers of palm oil to move to meet the company's demand for certified palm oil, warning that Unilever would look to apply effective sanctions on those suppliers who persist in unlawful deforestation practices and would be calling for an immediate moratorium on further deforestation for palm oil plantations in Indonesia.

The announcement was welcomed by the Prince of Wales, who hailed it as a " groundbreaking development" and urged other retailers and food companies to follow Unilever's "principled leadership" on the issue.

The move was also praised by Greenpeace, which had been campaigning against Unilever's palm oil policy and last year released a report directly linking the company to illegal plantations.

However, a spokesman for the green group warned the announcement would only prove effective if Unilever is willing to make good on its commitment and lean heavily on its suppliers to "stop trashing Indonesia's rainforests".

He also urged other large users of palm oil, such as Nestle and Procter & Gamble, to emulate Unilever's commitment to the new sustainability certification and increase pressure on suppliers to bring a halt to the development of illegal plantations.