Asia’s Biodiesel Dilemma
Some environmentalists see palm oil, which makes up about one third of all vegetable oil, as a biodiesel blessing. Others blame palm biodiesel for deforestation and species extinction. The pros and cons make biodiesel one of the hottest environmental topics in Southeast Asia, where oil palms grow.
Together, the Southeast Asian countries of Indonesia and Malaysia control about 85% of the world’s crude palm oil market. In Indonesia, the biodiesel industry employs 1.5 million people and Malaysia has already approved 91 new biodiesel plants. Currently, about 30% of Malaysia’s total oil production is biodiesel from palm oil.
The pros of palm oil for use in biodiesel have drawn interest from the international business community. Finnish biodiesel mogul, Neste Oil, is working on opening the world’s largest biodiesel plant in Singapore using a palm oil feedstock. The plant is set to go online in 2009 with a production capacity of 800,000 metric tons per year of biodiesel–16,000 barrels, in oil terms. Neste is followed by many other companies, including Australian Mission Biofuels, which opened a new Malaysian plant in December and will produce 100,000 tons a year.
However, all’s not well in the Asian palm oil bodiesel market. Reuters reports that of the seven currently operating Malaysian biodiesel plants, many are running below capacity and plans for 14 new plants have been put on hold. In addition, rising palm oil prices, frequent flooding, and a number of environmental concerns have taken their toll on the industry.
Some environmental organizations link palm oil biofuels to deforestation. Greenpeace, for one, staunchly opposes palm oil as a source of biofuel based on this concern. The Center for Science in the Public Interest also stands firmly against palm oil, warning that it “harms health [when eaten], the rainforest and wildlife.”
It’s a funny situation: usually environmental and social groups lobby for alternatives to fossil fuels while oil companies and major international financial institutions continue with their business as usual production of those fuels. Here, the environmental groups are lobbying against the alternatives to fossil fuels that oil producers and the World Bank are pushing for.
To the protests from environmental groups, pro-palm oil organizations have several convincing responses. Firstly, they point out that oil palms are some of the most productive biofuel sources in the world. One hectare of oil palm plantation is enough to produce 5 metric tons of crude biodiesel a year. This means less land is required to produce biofuel this way. The Palm Oil Truth Foundation also argues that “in Malaysia, the expansion of oil palm plantations over the last decade came mostly from the conversion of other economic crops such as rubber, cocoa and coconut” and not from deforestation. The total amount of greenhouse gases reduced by palm oil biodiesel, claim proponents, is 40-60% over regular diesel.
Despite the setbacks, lagging production, and the current environmental debate, there may be hope yet for Asian biodiesels. Biodiesel from Southeast Asia is almost all exported and sold on the international biodiesel market. This means that biodiesel legislation outside of Seatheast Asia will encourage growth in production. Several countries have made moves toward such legislation. South Korea passed legislation that mandates a 3% biodiesel blend, though the energy ministry rejected the originally proposed 5%. In 2008, Finland will adopt similar legislation, mandating 2%. In the US as well, Congress is in the first steps of considering legislation that promotes biodiesel and enacts past biodiesel goals.
A Refined Solution?
Rather than remain at odds with environmental groups, Neste Oil has gone to work with the World Wildlife Fund to create a certification program for palm oil biodiesel produced sustainably. The program is called the Roundtable of Sustainable Palm Oil, or RSPO. For now, the success of the RSPO is as uncertain as is the future of palm biodiesel itself. Still, if palm biodiesel is to be pursued, the RSPO offers exciting promise for a clean and sustainable way to free the world of fossil fuels.
Resources:
Gas 2.0 | Green Options Media
Biodiesel: The Good and the Bad | Green Car Advisor
Biodiesel Draws Bipartisan Presidential Candidates Focus | Biodiesel.org (PDF)
S. 1616: Biodiesel Promotion and Quality Assurance Act of 2007 | Govtrack.us
Biodiesel around the world | Wikimedia
Pro-Palm Biodiesel References
Roundtable on Sustainable Palm Oil
Faced with soaring oil prices, Indonesia turns to biodiesel | The Christian Science Monitor
Indonesia: Palm Oil Production A Mainstay of North Sumatra Economy | Embassy of the United States
Southeast Asia’s Green Energy Industry Fuels Employment| The World Bank Group
No peace for Neste Oil | Biofuels International
South Korea’s energy ministry rejects five percent biodiesel blend, opts for three instead | Autoblog Green
Neste Oil to build a NExBTL Renewable Diesel plant in Singapore | Neste Oil
100,000 tps Biodiesel Refinery, Kuantan Port in Malaysia | Mission Biofuels
Anti-Palm Biodiesel References
Greenpeace: Neste palm oil-based biodiesel not so green | Helsingin Sanomat
Cruel Oil | The Center for Science in the Public Interest
Why is oil palm replacing tropical rainforests? | Mongabay
Asian biodiesel plants sit idle as costs soar | Reuters
Mass production of Malaysian biodiesel slow on soaring palm oil prices - report | Caro Diesel
Photo Source:
Palm Oil Fruit | Neste Oil
Great post, Gavin. The references are especially helpful.
Environmentalist who oppose Palm Oil would rather use fossil fuels — or simply don’t see it as an alternative resource because it does damage as well?
Nice work, Gavin. I don’t know if my Masters’ thesis had that many sources!
Thanks for the responses. I think it’s a good topic to discuss. Certainly, we can’t keep using oil (both because of pollution and peak oil). Therefore, if we’re going to stick with personal transportation (cars, trucks, etc.) rather than convert to a fully integrated public transit system (light rail trains and electric buses like those in San Francisco, for example), we’ll have to find an alternative to fossil fuels.
I found the Roundtable of Sustainable Palm Oil certification program a very encouraging option for sustainably produced biodiesel.
National Algae Association
Algae: The Next Biofuel
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April 10, 2008
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Excellent post. Well thought out, objectively written and presented. A far cry from the hype and dishonest arguments so often put forth against palm oil by the likes of Greenpeace and the Center for Science (CSPI) in the Public Interest.
People are beginning to wake up to the fact that something malodorous and sinister lies beneath the surface of these dubious attacks against palm oil.
It will be people like you Gavin, with your critical and analytical mind that’ll eventually expose environmental outfits like Greenpeace and CSPI for the humbugs that they really are!