what we can use in place of palm oil. Lard or tallow is a great substitute for palm oil. Three great ones are olive oil, cocoa butter and shea butter. Olive oil is initially quite soft when first unmolding but gets super hard. Most of my palm free recipes have a water discount. Because they do contain a high amount of unsaturated oils (liquid oils such as olive, rice bran or sunflower) it does help to use less water to help them firm up quickly.