A Rethink on Palm Oil for Biofuel?

March 27, 2007 — By Arthur Max, Associated Press AMSTERDAM, Netherlands --

Once, palm oil was seen as an ideal biofuel, a cheap alternative to petroleum that would fight global warming.

But second thoughts are wracking the power industry. Can the fruit of the palm tree help save the planet -- or contribute to its destruction?

Environmentalists have long warned that many plantations in Indonesia and Malaysia, where 85 percent of commercial palm oil is grown, were planted on cleared rain forest, threatening the home of endangered animals like the orangutan and the Sumatran tiger.

Now, amid global efforts to curb emissions of greenhouse gases, power companies have joined conservationists in calculating the carbon count of producing palm oil fuel -- and found the balance increasingly negative. A few companies have put plans on hold to switch to palm oil.

A report late last year by a Netherlands-based research group claimed some plantations produce far more carbon dioxide than they save. Seeded on drained peat swamps, they unleash a warehouse of carbon from decomposed plants and animals that had been locked in the bogs for hundreds of million years, which one biologist described as "buried sunshine."

"As a biofuel, it's a failure," said Marcel Silvius, a climate change expert for Wetlands International, the institute that led the research team.

The palm oil debate is just one example of cold realism dampening enthusiasm for vegetable oils as substitutes for the fossil fuels that are widely blamed for the gradual warming of the Earth and potentially disastrous changes in climate.

In the United States, where farmers have diverted corn and sugar crops to ethanol production, food prices have soared. Environmentalists say the high energy cost of making ethanol, coupled with the degraded land and polluted water from heavily fertilized fields, have put a large question mark on its value as a biofuel.

Palm oil is an ingredient in cooking oil, cosmetics, soaps, bread, chocolate -- in fact, in about one in every 10 products on the supermarket shelf. It also is used as an industrial lubricant.
It is attractive for bioenergy because it is relatively abundant, cheap at about US$557 (euro419) per ton in mid-March, and more easily integrated into existing power stations than most other alternative fuels. Unlike carbon-rich fossil fuels, production is considered carbon neutral, meaning the carbon emitted from burning palm oil is the same as that absorbed during growth.

But the surrounding environmental cost is becoming increasingly apparent.

The four-year study in Southeast Asia by a team from Wetlands, Delft Hydraulics and the Alterra Research Center of Wageningen University said 600 million tons of carbon dioxide seep every year into the air from drained peat swamps. Another 1.4 billion tons go up in smoke from rain forest fires deliberately set to clear new land for plantations, shrouding much of Singapore and Malaysia in an impenetrable haze for weeks at a time.

Together, those 2 billion tons of CO2 amount to 8 percent of the globe's fossil fuel emissions, the report said.

Friends of the Earth called the report "astonishing," and said it shows that harvesting palm oil for fuel is counterproductive. "It undermines the whole project," said a climate specialist for the environment group, Anne van Schaik.

Wetlands' figures could not be independently verified by the U.N. Climate Change Secretariat in Bonn, Germany, by the World Resources Institute in Washington, D.C., nor by academic experts. But all said the research appeared credible.

Deforestation is the No. 2 cause of greenhouse gas emissions after the burning of fossil fuels, said Jeffrey Dukes, a biologist at the University of Massachusetts, and clearing peat swamps for plantations is "a double whammy."

It not only releases carbon trapped over many millennia, Dukes said, but destroys the most efficient ecosystem on the planet for sucking carbon from the atmosphere and storing it underground. "By converting these forests, we are essentially taking that buried sunshine and wasting it," he said. "It's a terrible decision. Whether or not it's consciously made, it's society going in reverse."

Next month, the Intergovernmental Panel on Climate Change, an authoritative U.N. network of 2,000 scientists, will publish its second in a series of four reports on the likely causes and potential impact of global warming.

Silvius, of Wetlands, said awareness of the vast amounts of carbon released from degraded peat lands is so new that the problem was not included in an early draft of the IPCC report. The group was pushing to include it in the final report and put it on the environmental agenda.
The first report, released in February, said with more certainty than before that mankind was responsible for global warming.

That report galvanized European leaders to approve a bold plan to cut greenhouse gas emissions by 20 percent from 1990 levels by 2020 -- and increase that to 30 percent if other countries join. Part of that goal would be achieved by converting at least 10 percent of Europe's energy supplies to biofuels.

Despite pressure to replace coal, oil and gas with cleaner fuels, major power companies in Britain and the Netherlands have scrapped plans to partially convert electricity generation to palm oil.
"We spent more than a year investigating the sustainability issues with palm oil," said Leon Flexman, of RWE npower, Britain's largest electricity supplier. The company decided against palm oil because it could not verify all its supplies would be free of the taint of destroyed rain forest or peat bogs, he said. The Dutch power company Essent also announced in December it had suspended the incineration of palm oil until it can trace and verify the sources.

Biox, a Dutch startup, said it plans to go ahead with the construction of three 50 megawatt power stations exclusively burning palm oil -- generating enough electricity to light all the homes in Amsterdam.

"Until this report came out, peatlands was not an issue because we hadn't heard of it. Nobody had heard," said Biox executive Arjen Brinkmann. "We have to take this on board as a criteria, together with the other sustainability criteria."

So far, the industry's reservations do not seem to have affected the market. Crude palm oil production rose 6.6 percent last year and will increase another 5.5% this year to 37 million tons, according to Fortis Bank. Prices have risen 35 percent in the last year and are still going up, it said. With concerns mounting over sourcing, plantation owners joined forces with processors, investors and environmentalists three years ago to form the Roundtable on Sustainable Palm Oil with the aim of monitoring the industry and drawing up criteria for socially responsible trade.

But the RSPO has yet to create a foolproof system to verify the supply chain.

Flexman, of the British utility, said his company may still opt for palm oil in the future if the ecological issues can be resolved. "We think RSPO is the way to go in setting up verification system," he said.

Source: Associated Press

Darwin has a biodiesel plant fuelled by palm oil from SE Asia, with the company planning to build another in Singapore / Johore Bahru. And yes, the pollution from the peat and forest fires is VERY bad in most of Malaysia and Singapore during the dry season, and this originates from Indonesia. But most palm oil is expected to come from well established plantations in peninsular Malaysia at present, many of which are not on peat soils but on undulating clay soils. Not always a clearcut [ no pun intended] issue. There are also issues of local livelihood, with many thousands of rural people earning a living in the palm oil planatations.

Authors of the studies above are very credible institutions, so it should not be taken lightly. But then we already use a large volume of palm oil in other areas - is that also bad? Why has it not been raised previously if it is so serious, as palm oil cultivation has been a major feature of Indonesia and Malaysia for many, many decades? Or is this western world guilt denying a decent agricultural existence for LDC's again?

Maybe biodiesel does not rock after all. Watch this space............there will ,no doubt, be more!