Palm oil expansion, biodiesel factors in Copenhagen drama

By Nicholas Zeman | January 19, 2010
Biodiesel has become a major product for the palm oil sector in Asia. This business has been at the center of an international controversy involving tropical deforestation, agricultural competition and the Copenhagen Climate Summit.

Tension between industrialized and developing countries certainly influenced negotiations in Copenhagen. One issue involved a plan called Reducing Emissions from Deforestation and Degradation in developing countries that would compensate for certain measures instituted by the Kyoto Protocol, which is set to expire in 2012. This program would essentially curb palm plantation expansion in Malaysia and Indonesia, but both countries summarily rejected it for various reasons.

"Palm oil is 5 percent of the area planted and accounts for 30 percent of oil production volumes in the world," said W.H. Leong of Carotech Inc., working out of the Malaysian company's U.S. satellite office. "Rapeseed (canola) accounts for 13 percent of the planted area, and only 16 percent of the total production volume. An oil palm is also a perennial plant, whereas most other major oilseeds are annuals that have to be replanted every year."

Providing incentives for developing countries such as Indonesia, Malaysia and Brazil to produce feedstocks for biodiesel on existing agricultural lands, instead of clearing more forest land and "driving species to extinction," is an important priority for Greenpeace. Transparency and accounting directives that track the biodiesel supply chain are very important to Greenpeace and its position on an international climate change treaty. Palm oil, because of its association with deforestation, could actually increase life-cycle carbon emissions compared to petroleum, said Greenpeace's Rolf Skar.

"We don't have a one-size-fits-all stance when it comes to biofuels," Skar said. "We definitely support those technologies that reduce carbon footprints, but we do not think we see that across the biofuels industries. Everyone should be in favor of rigorous scientific accounting and life-cycle analysis when it comes to biofuels, and right now we don't think that we see that."

The ways in which the EU, U.S. and other "wealthy" nations help developing countries such as Indonesia and China finance their carbon reduction strategies could include biodiesel technologies. "Greentech transfer is a major component of the negotiations right now," Skar said. "[Biofuels] companies might license their products to developing countries at a discount or for free. This would help with carbon reduction strategies and develop new markets for these technologies."

Big news from the summit was the leak of a document prepared by the Danish government, "the Danish Text," as Britain's The Guardian called it. The Guardian initially published the document and subsequently said that "it would appear that the Danish government has been trying to establish some kind of underlying consensus among the big western players. This will not warm the delegates from the developing world to the already cold and wet experience of being in Copenhagen."

Other political organizations have said Greenpeace and other environmental watchdog organizations are "heartless and out-of-touch" with the world's poor and are using international stages like the Copenhagen summit in a campaign to prohibit the proliferation of palm oil and other products that have links to deforestation.

"I think this is a bunch of hogwash," Skar said. "These are big companies trying to hide their destructive practices behind the face of the poor, and none of them have very good human rights records to begin with-they've been tied to some pretty nasty stuff."

Leong reiterated throughout a recent conversation with Biodiesel Magazine that Malaysia "is not Indonesia and should not be characterized as Indonesia," and that the palm oil plantations there are more than 25 years old, not new. "All of the rest of the Malaysian forest has been set aside as national parks and reserve," Leong said. "So there is no more land to expand, and the palm plantations are on traditional agricultural lands." Carotech also reported that the palm oil industry employs more than 500,000 people in Malaysia, and is essential to reducing poverty there.

In addition to programs meant to curb palm oil expansion at the expense of rain forests, several items were expected to come out of Copenhagen-if not a firm treaty-outlining a carbon pricing or cap-and-trade system. "Any deal that puts a price on carbon is bound to be good for biofuels," said Bliss Baker, spokesman for the Global Renewable Fuels Alliance based in Canada.

The GRFA recently cited a report prepared by (S&T)2 Consultants Inc. and F.O. Lichts, which said that "with respect to biodiesel, forecast global production of 16.4 billion liters (4.3 billion gallons) will reduce greenhouse gas (GHG) emissions by 35.9 million tons." To reach these conclusions, analysts utilized a life-cycle assessment approach "to estimate global GHG emissions reduction achieved through the production and use of biofuels from cradle-to-grave, including the acquisition of raw materials, manufacture, transport, use, maintenance and final disposal."

The combined GHG emissions reduction from global ethanol and biodiesel production of 123.5 million tons represents an average reduction of 57 percent, compared to the emissions that would have occurred from the production and use of equal quantities of petroleum fuels, GRFA said. "This is equal to the national GHG emissions of Belgium or Greece, as well as the combined emissions of Monaco, Liechtenstein, Iceland, Latvia, Luxembourg, Slovenia, Estonia, Lithuania and Croatia."
Because of biofuels companies' carbon-reducing capabilities, they might be able to sell credits under a carbon pricing or cap-and-trade system, which, of course, would boost the economic viability of the biodiesel industry and its counterparts. "This would add to any benefits the biofuels industries would see from increased use and sales," Baker said.

Other highlights of the study, "GHG Emission Reductions from World Biofuel Production and Use," were that global manufacturing of biofuels surpassed 100 billion liters in 2009, which is displacing 1.15 million barrels (48.3 million gallons) of crude oil per day and 215 million tons of GHG emissions regularly. Malaysia and Indonesia are not members of the GRFA.
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