Seeing Red: Palm Oil Biodiesel

In the enthusiasm for renewable energy and taking care of our environment, it is easy to assume that making fuel from plants (biofuel) must be by definition "green" and renewable. However when it comes to energy issues, easy assumptions can be dangerous assumptions. In previous years some politicians and advocates in Europe have made these assumptions without sufficient thought and research and secured government subsidies for companies importing palm oil from South East Asia to make biodiesel for transport and for use in electricity generation.

The demand for palm oil in Europe has soared in the last two decades, first for use in food and cosmetics, and more recently for fuel. This cheap oil can be used for a variety of purposes, including as an ingredient about 10 percent of supermarket products, from chocolate to toothpaste.

Promoted by hundreds of millions of dollars in national subsidies, the Netherlands quickly became the leading importer of palm oil in Europe, taking in 1.7 million tons in 2006, nearly double the previous year.



Now it is increasingly difficult to ignore the mounting body of scientific evidence that palm oil plantations in Indonesia and Malaysia, rather than preserving the environment are in fact actively destroying it. By subsidising biofuels, European governments have artificially raised demand for palm oil in Europe, and accelerated the destruction of huge areas of rainforest in South East Asia. Palm oil plantations are often expanded by draining and burning peatland, releasing enormous amounts of carbon dioxide into the atmosphere. As a result Indonesia has become the world's third largest emitter of carbon dioxide, ranked after the United States and China, according to a study released in December by researchers from Wetlands International and Delft Hydraulics, both based in the Netherlands.

The 2003 European Union Biofuels Directive, which required all member states aim to have 5.75 percent of transportation run on biofuel in 2010, is now under review. In the Netherlands, the data from Indonesia has prompted the government to suspend palm oil subsidies.

In Europe a small amount of rapeseed and sunflower oil is used to make diesel fuel, however increasingly plant oils are being imported from the tropics, since there is simply not enough plant matter or land for biofuel production at home. So while the billions of dollars in European subsidies appear to have reduced carbon emissions in European countries by importing biofuels, this has been achieved by exporting them and increasing their impact many times by the permanent destruction of rainforest and peatland in South East Asia.

For anyone familiar with how the ethanol industry works in the United States, they will be unsurprised to learn that the palm oil industry was promoted long before there was adequate research. Biofuel Watch, an environment group in Britain, now says that "biofuels should not automatically be classed as renewable energy." It supports a stop on subsidies until more research can determine if various biofuels in different regions are produced in a nonpolluting manner. The group also suggests that all emissions arising from the production of a biofuel be counted as emissions in the country where the fuel is actually used, providing a clearer accounting of environmental costs.


BEFORE: rainforest on the Indonesian part of the island of Borneo

Friends of the Earth estimates that 87 percent of the deforestation in Malaysia from 1985 to 2000 was caused by new palm oil plantations. In Indonesia, the amount of land devoted to palm oil has increased 118 percent in the last eight years.


AFTER: a palm oil plantation

Peat is an organic sponge composed of 90 percent water that stores huge amounts of carbon, which when it is drained emits huges amounts of carbon into the atmosphere.

Even worse peatland is often burned to clear ground for plantations. The Dutch study estimated that the draining of peatland in Indonesia releases 660 million tons of carbon a year into the atmosphere and that fires contributed 1.5 billion tons annually.


Kuala Lumpur, Malaysia
the haze has covered much of SE Asia for extended periods of time since 1997

The total is equivalent to 8 percent of all global emissions caused annually by burning fossil fuels, the researchers said. "These emissions generated by peat drainage in Indonesia were not counted before," according to a Wetlands spokesperson. "It was a totally ignored problem."

While for the moment the widescale destruction of rainforests in South East Asia continues, hopefully the palm oil story will serve as a cautionary tale which will lead to much better informed policymaking and behaviour. Politicians must resist the urge to rush to legislate and subsidise in order to bask in the glow of being seen to be "doing something" while a number of so-called green companies profit from taxpayer subsidised destruction. Energy policy must make sense from a scientific (i.e. it should be energy positive), economic and environmental viewpoint. However the continued promotion of ethanol and coal-to-liquids calls for continued skepticism.