Palm Oil Fights Back

Malaysian oil palm growers try to turn the tide of public criticism with a conference devoted to discussing the tropical oil crop's sustainability and carbon footprint.
By Susanne Retka Schill | June 17, 2008
Palm oil is often associated with rainforest deforestation in much the same way biofuels get knocked around in the food versus fuel debate. The simplified sound bites of the debate, however, often overlook the complexity of the issues and are sometimes based on outdated and inaccurate information. The first International Palm Oil Sustainability Conference held in mid-April is the latest effort of the Malaysian Palm Oil Council's educational campaign, bringing together nearly 600 industry players from Southeast Asia, Australia, Europe and the United States to discuss the palm oil industry's environmental impact.

The conference opened with a ceremonial signing of the documents creating the Malaysian Palm Oil Wildlife Conservation fund, which has an initial investment of $6.25 million. The fund is a collaborative effort involving the MPOC, the Malaysian government, Bursa Malaysia (managers of the country's stock exchange) and the Borneo Conservation Trust. Under development for the past year, the fund has already collaborated with the Sabah Forestry Department to establish a jungle patrol to discourage wildlife poaching in forest reserves bordering oil palm plantations, and with the University of Malaysia Sabah to conduct a biodiversity conservation study. The fund is also developing a project with WWF (World Wide Fund for Nature) Malaysia to create a baseline of oil palm sector impacts on biodiversity in the country.

The collaboration with the Borneo Conservation Trust, a state-mandated nonprofit, nongovernmental organization, includes a survey of orangutans-the endangered species most often heralded in discussions critical of oil palm cultivation. Cyril Pinso, chief executive officer of the trust, explained that a 2004 orangutan survey found 60 percent of the population was living in unprotected forest fragments inside and on the edges of oil palm plantations. The current survey seeks to document orangutan numbers and develop a management plan to guarantee the survival of the endangered species.

Environmental Concerns and Research
Habitat improvements and biodiversity were discussed during several presentations. Some environmental critics have gone so far as to call for boycotts which the conference's keynote speaker, David Wilcove, professor of ecology at Princeton University, said were unrealistic and impractical. "Conflicts between oil palm expansion and biodiversity conservation will not be solved by each side portraying the other as villains," he said. "Instead, both sides must talk to each other and search for innovative solutions to these issues." He also cited the need for a balance between environmental concerns and development needs. "The oil palm industry contributes substantially to the region's developing economies, and it is important to the welfare of many communities," he said. Wilcove's research has examined the impact of biodiversity on birds, and in turn, the birds' impact on plantations. "Birds do prove a useful pest control service for oil palm agriculture," he said. "In order to maintain healthy populations of these birds, oil palm growers should protect or restore patches of natural forest including riverine buffer zones and marginal habitats within oil palm plantations." He also encouraged producers to continue biodiversity enhancement measures involving leguminous cover crops and plants supporting beneficial insects. However, he added, "small increases [in biodiversity on plantations] are possible, but they're not equal to what is lost by forest conversion."

Other speakers addressed the most recent issue to emerge surrounding palm oil-the potential for peat soil conversion to release enormous amounts of powerful greenhouse gases (GHGs). Due to increasing population pressure and the need to eradicate rural poverty, peat areas in Malaysia and Indonesia have been logged and cleared over the past 20 years for pulp and oil palm plantations, explained S. Paramananthan, managing director of Param Agricultural Soil Surveys Sdn Bhd. Although some critics claim converted peat lands are becoming a source of GHG emissions, the soils scientist said tropical peats are different from peat soils in temperate climates and may not contribute the same level of GHG emissions when drained. He called for further study and the development of a national peat land policy.

As the oil palm industry has expanded it has been roundly criticized for the loss of habitat for the endangered orangutan. One of its critics, WWF Switzerland, proposed the Roundtable for Sustainable Palm Oil in 2003, an effort the palm oil producers joined in the organizational stage. Darrel Webber, RSPO representative for WWF Malaysia, described the collaboration between WWF and oil palm producers to develop the Kinabatangan Corridor of Life. The Kinabatangan River is arguably Asia's last remaining forested flood plain, he said, and prime habitat for Borneo's orangutan. Much of the rainforest conversion in the flood plain began in the 1980s, with half of the orangutan habitat from that era now in oil palm and much of the remaining habitat consisting of isolated fragments. Current efforts focus on restoring key areas to reconnect native forest fragments and provide corridors for wildlife, mainly along the river. Restoring riparian buffers will have other benefits, Webber said, such as filtering fertilizer runoff and preserving water quality.

Ann Anton, a professor of phycology at the University of Malaysia Sabah, described research on another river system, the Sugut, which still contains relatively pristine habitats. The study is being conducted to find strategies for species conservation and water quality preservation in the oxbow lakes, which are formed when a meandering loop in the river gets cut off from the main stream, often creating an island. "There is an urgent need to stop the death of the lakes due to eutrophication and aquatic weed infestations," she said. Project participants are also considering the development needed to tap into the area's ecotourism potential.

Carbon Footprint and Lifecycle Analysis
In addition to habitat and environmental impacts, the MPOC conference focused on the carbon footprint and lifecycle analysis of palm oil. "The palm oil industry to make itself heard, credible and authentic has to minimize the risks of being accused of greenwashing," said Chan Kook Weng, senior research fellow at the Malaysian Palm Oil Board. The board is researching local, regional and national levels of carbon accounting to develop a carbon balance budget over the 25-year life span of oil palm plantings. Malaysian analyses of its carbon footprint being developed by companies entering the carbon trading market will have to utilize ISO standards for lifecycle analysis and GHG calculations, some of which are still being developed, he said.

Minimum GHG reductions for biofuels feedstocks, often of 35 percent or higher, are being established in Europe, said Hans van Zutphen, managing director of the Dutch consultancy Carbon Solutions BV. Current production practices, in his analysis, show Malaysian palm oil, excluding land-use effects, can achieve a 60 percent net carbon dioxide reduction when used as a feedstock for biodiesel. Those figures will have to be proven, he added, since the EU regulations call for using a standard of a 17 percent GHG reduction for palm biodiesel unless otherwise documented. "The EU doesn't explain where its data comes from," he added, as he showed the lifecycle analysis supply model he used in his calculations, which incorporated production, processing and transportation components. All of the major biodiesel feedstocks-soy, rapeseed, sunflower, palm oil-have roughly the same net carbon reductions, van Zutphen said. "The highest net carbon reduction achieved is 67 percent, the lowest 53 percent," he said. Palm has the greatest potential for improving its carbon balance, he added. The main problematical emission source for palm oil is methane released from wastewater holding ponds, while for the other oils the main emission issue comes from fertilizer. "By implementing waste management solutions at palm oil mills, the carbon balance of palm oil can be greatly improved," van Zutphen said.

He estimates that by capturing the methane or composting the solid and liquid milling wastes for fertilizer the GHG reduction level for palm oil would increase to nearly 90 percent.

Tammy Klein, executive director of the Global Biofuels Center managed by Hart Energy Publishing LLLP, said the biggest change in biodiesel mandates is the move to include GHG reduction goals along with volumetric requirements. Current EU mandates target 5.75 percent biodiesel blends by the end of 2010. The proposed 2008 renewable energy directive is suggesting a mandated 10 percent biofuel target by 2020, including sustainability criteria and a requirement for a minimum 35 percent GHG savings. There will be policy debates to follow since several EU groups are arguing against the 10 percent biofuels mandate, and the proposed sustainability criteria in the EU directive are less stringent than some of the individual state policies. While superior yields will continue to make palm oil price competitive, "the key for palm oil producers will be addressing the sustainability issues strongly and proactively," she said.

This chart shows van Zutphen's carbon balance calculations for different biodiesel
feedstocks compared with fossil fuels. The bars show the contribution from the components
(cultivation, transport, etc.) which are given in kilograms of carbon dioxide equivalents per ton of biodiesel. He says palm oil's carbon balance would be more favorable if producers reduce their methane emissions from the mill wastewater treatment by capturing the methane or using other recycling options.


In his closing remarks to the conference MPOC Chief Executive Officer Yusof Basiron said the palm oil industry should not be singled out to meet emerging world market demands for sustainability. "If certification to prove sustainability is required, it should be applied to all oils and fat sources," he said. Expressing frustration for calls to ban palm oil for biodiesel in Oregon and Holland, Basiron said genetically modified soybeans and rapeseed (canola) by definition should not claim to be sustainable.

Basiron defended Malaysia's performance on environmental issues, pointing out that 60 percent of the country's land is dedicated to permanent forest reserve, with oil palm cultivated on "legitimate agricultural land." Sustainability criteria often focus on zero deforestation requirements, he said, pointing to the Malaysian state of Sarawak where the agricultural-to-forest land ratio is 8 percent agriculture to 76 percent forest. In comparison, the United Kingdom has 70 percent agricultural to 12 percent forest. "Malaysian oil palm is grown on legal agricultural land, which means that it is not the cause of recent deforestation and its cultivation does not destroy wildlife and its habitat," he asserted. "It is illogical for EU experts to assign inferior carbon emission values for palm oil compared with rapeseed or soya which are seasonal crops and have little carbon sink value."

Basiron cited the following characteristics of oil palm cultivation in Malaysia that make it a sustainable and environmentally responsible oil crop:
› The life span of a plantation is 25 years, so only 5 percent of the oil palm trees are replanted at a time making oil palm a 95 percent permanent carbon sink.

› Malaysia doesn't allow burning, which is a highly criticized land-clearing practice still used in some regions.

› Best management practices that are environmentally friendly are encouraged, including terracing and cover crops to control erosion, using nitrogen-fixing ground covers, biological pest control and recycling biomass as mulch or for energy generation.

The MPOC is concerned, however, about the ability of the nation's small holders to meet the certification requirements for RSPO, Basiron said. He outlined the organization's efforts to brand Malaysia palm oil, offering buyers a certificate of assurance that the palm oil is derived from legitimate agricultural land. The Malaysian palm brand will also give the organization a means to educate consumers about Malaysia's quest to be a responsible and efficient supplier of quality palm oil, he said.

While the conference focused on the Malaysian industry, NGO representatives pointedly asked in open microphone sessions whether the Malaysian plantation owners were going to continue their positive management practices in neighboring Indonesia where most of the current expansion of oil palm is occurring. Scattered throughout the presentations in the conferences were references to the dilemma of balancing the development needs of poor countries with the calls to stop further deforestation and habitat loss. The palm oil industry is credited for lifting Malaysia out of poverty. A 50-year-old program reminiscent of the U.S. Homestead Act gave land to small holders if they converted it to agriculture.

Much of that conversion was done decades ago in Malaysia, and several conference speakers sympathized with the Indonesian small land holders' need for economic opportunity even while being accused of deforestation and habitat destruction.

While the WWF has often been a harsh critic of the industry, the Malaysian representative Webber sounded a positive note in concluding his remarks: "Absolutely, palm oil development can be sustainable. The question is do we want it?"

Susanne Retka Schill, a Biodiesel Magazine staff writer, was hosted by the Malaysian Palm Oil Council in a tour of the Malaysian industry. Reach her at or (701) 738-4962.
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