Palm oils are found in numerous products, from chocolate to shampoos and there are growing calls globally to clearly label products so that consumers can make better informed decisions.
Advertising body Clearcast said the organisation hadn't banned the short film but that it couldn't clear it to run on TV as it is breaches the rules of the Broadcast Code of Advertising Practice which stops companies from broadcasting political adverts.
The orangutan explains their home is being cut down and burnt for palm oil so they thought they'd live with the young girl.
Palm oil is a highly controversial ingredient, with green groups accusing suppliers of the widely used commodity of fueling deforestation in South East Asia, leading to increased greenhouse gas emissions and habitat loss.
Zlatan veut bien revenir "pour être le patron" — PSG
Un mauvais coup que le joueur, aujourd'hui expatrié au LA Galaxy aux Etats-Unis, n'apprécie guère. Galliani (directeur sportif de l'AC Milan à l'époque) m'a confirmé qu'il ne me vendrait pas'.
While the advert appears to be light hearted at the start with brightly coloured cartoons, things soon take a dark turn when it is the turn of the Orangutan to tell his story.
The animation, Rang-tan, was originally made by Greenpeace.
Iceland's managing director Richard Walker said: "Throughout 2018 we have led the retail industry to take action in areas such as rainforest destruction for palm oil and plastic pollution of our oceans".
"I think it is a brilliant advert and it should be shown", a third replied.
La hausse des prix du carburant provoque un front anti-Macron — France
Les pistes avancées par l'exécutif ont suscité l'incompréhension au sein de l'opposition, mais aussi chez les élus régionaux. Macron , vous n'êtes pas le bienvenu ici.
In addition, a Change.org petition calling on British Prime Minister Theresa May to "unban" the ad has already garnered nearly 3,500 signatures in the five hours since it was posted Friday morning.
"You won't see our Christmas advert on TV this year. The culmination of our palm oil project is offering our customers the choice of an orangutan-friendly Christmas, and we wanted to reflect this in our advertising".
It may not comply with television rules but has been viewed and shared on social media thousands of times over.
Iceland's 2018 Christmas range features more than 100 food lines that don't use palm oil as an ingredient, such as the supermarket's Salted Caramel Christmas Tree Cheesecake, Luxury Jumbo Coated Wild Red Shrimp Selection and Luxury Black Forest Layered Pavlova.
Tens of thousands flee fast-moving Northern California fire
At the moment the fire is in Butte county, powering through Paradise City and under watch from the Paradise Police Department. Right now, 500 firefighters are working to put out the conflagration, with support from 100 other law enforcement officials.