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This paper studies the performance and applicability of a novel kernel partial least squares (KPLS) algorithm for nonlinear feature extraction in the context of remote sensing applications. The so-called kernel orthonormalized PLS algorithm with reduced complexity (rKOPLS) has the following two core parts: (1) a kernel version of OPLS (called KOPLS) and (2) a sparse approximation for large-scale data sets, which ultimately leads to the rKOPLS algorithm. The method is theoretically analyzed in terms of computational burden and memory requirements and is tested in common remote sensing applications: multi- and hyperspectral image classification and biophysical parameter estimation problems. The proposed method largely outperforms the traditional (linear) PLS algorithm and demonstrates good capabilities in terms of expressive power of the extracted nonlinear features, accuracy, and scalability as compared to the standard KPLS.