Greenpeace: biodiesel demand has varied impact on tropical deforestation

By Nicholas Zeman | June 09, 2009
In July 2006, after Greenpeace International authored a report claiming that soya farming was the leading driver of Amazon deforestation, ADM, Cargill and other members of Brazil's vegetable oil and grain exporting industries "agreed to a voluntary moratorium on trading soy harvested from newly deforested areas in the Amazon biome for a period of two years," said Bunge Ltd. in a company statement. "The intent was to relieve pressure on the Amazon biome, so work could be undertaken by government, industry, farmers and environmental groups to ensure its long-term protection." The moratorium is scheduled to end in July after the original agreement was extended last year.

"We hope this moratorium is extended through 2010," said Paulo Adario, director of Greenpeace's Amazon deforestation campaign. "But we haven't begun any serious negotiations as of yet." The sustainable production of biodiesel has been a major focus of the global industry in recent months as consumer opinion has indicated, especially in Europe-so much so that it does not want to buy biofuels that put pressure on food crops or are made in ways that damage indigenous ecosystems.

"Biodiesel demand for soy oil is not seen as a significant driver of Amazon deforestation," Adario said. "Most of the soya grown in Brazil including what is grown on illegal plantations is for animal and human consumption, and right now the Brazilian government is investing in other feedstocks for the development of its biofuels program."

The South American country, which is looking to grow its export power in the biofuels market, is being very careful about how its feedstocks are grown and sourced. "Sugar cane cultivation for ethanol production is the primary risk to the Amazon right now," Adario said. "But the Brazilian government is taking steps to fight this because they know that if the ethanol or biodiesel produced here is found to be supported by land that is responsible for rain forest destruction, the world market is going to say 'no, no, no.'"

While Greenpeace says the moratorium has had a significant impact and soy cultivation is no longer the leading driver of Amazon deforestation, there is still much work to be done. "There is no certification for soy in Brazil and very little traceability," Adario said. "So the question is, 'are the traders ready to totally exclude the farmers who grow soy illegally from the market?'"

Although the domestic feedstock situation is thin at times, U.S. biodiesel producers are reportedly not looking to South America to source needed raw materials. "We rarely import anything, in terms of agricultural commodities, from South America," said Darrel Good, University of Illinois extension marketing specialist. "We do import some palm oil at times but that is mostly as a food ingredient."

While soybean prices have been strong in early 2009, partly related to uncertainty over South American soybean production prospects, Bill George of the USDA's Foreign Agriculture Service, said that limiting expansion of soya on illegal acres is insignificant compared to other factors. "Drought, lack of access to financing, and a decline in yields are the major factors for the Brazilian soybean industry," he said. "So a decline of illegal soy acres, I would see as a drop in the bucket in regard to the overall scenario."

On the other side of the globe, however, speculation on future biodiesel demand is driving tropical deforestation, says Rolf Skar, additional forest campaigner for Greenpeace in the U.S. While Amazon deforestation isn't seen as horrific as the situation in Asia, the pattern could be mimicked in Brazil, Argentina and other countries if the world doesn't play its cards right. "There are millions of acres lying fallow, primarily in Indonesia," Skar says. "That's because the EU and others have proposed mandates that require the use large of amounts of biofuels."

Palm oil is slated as a staple of future biodiesel production, especially in Europe, as Finland's Neste Oil undertakes construction of the continent's largest renewable diesel plant at the Port of Rotterdam, the Netherlands. Neste has sourced palm oil for its production processes, associated with its proprietary NExBTL fuel, from Malaysian plantations. Neste is a member of the Roundtable for Sustainable Palm Oil, which promotes traceability in the supply chain, but its actions have not satisfied Greenpeace. "Neste is involved in a very dirty business," Skar said. "The RSPO which Neste has joined, is a good first step but it doesn't promote the kind of transparency and traceability in the supply chain that we would like to see."

Greenpeace is actually calling for a moratorium on the sourcing of illegally cultivated palm oil from Malaysia and Indonesia, which is very similar to the one now in place against illegal soya farming in the Amazon. "The 2007 Guinness Book of World Records cited the top rate of deforestation was in Indonesia at 20 square miles per day during the preceding year," Skar says. "Most of this was done illegally-or at least through questionable practices-involving government corruption and land grabbing."

Because of consumer pressure in Europe, however, this business practice is not something that companies with public profiles are going to want to be associated with. "People don't want to put this in their tanks," Skar says. "The promise of biodiesel is a great one, but if it comes from cultivation in areas that destroy human rights, ancient peat soils and endangered species, it's actually much more damaging than fossil fuels."
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