Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare

Once a Dream Fuel,Palm Oil May Be an Eco-Nightmare

31 January 2007

published by www.nytimes.com

Southeast Asia — Just a few years ago, politicians and environmental groupsin the Netherlands were thrilled by the early and rapid adoption of“sustainable energy,” achieved in part by coaxing electrical plants to usebiofuel — in particular, palm oil from Southeast Asia.

Spurred by government subsidies, energy companies became so enthusiastic thatthey designed generators that ran exclusively on the oil, which in theory wouldbe cleaner than fossil fuels like coal because it is derived from plants.

But last year, when scientists studied practices at palm plantations inIndonesia and Malaysia, this green fairy tale began to look more like anenvironmental nightmare.

Rising demand for palm oil in Europe brought about the clearing of hugetracts of Southeast Asian rainforest and the overuse of chemical fertilizerthere.

Worse still, the scientists said, space for the expanding palm plantationswas often created by draining and burning peatland, which sent huge amounts ofcarbon emissions into the atmosphere.

Considering these emissions, Indonesia had quickly become the world’sthird-leading producer of carbon emissions that scientists believe areresponsible for globalwarming, ranked after the United States and China, according to a studyreleased in December by researchers from Wetlands International and DelftHydraulics, both in the Netherlands.

“It was shocking and totally smashed all the good reasons we initially wentinto palm oil,” said Alex Kaat, a spokesman for Wetlands, a conservation group.

The production of biofuels, long a cornerstone of the quest for greenerenergy, may sometimes create more harmful emissions than fossil fuels,scientific studies are finding.

As a result, politicians in many countries are rethinking the billions ofdollars in subsidies that have indiscriminately supported the spread of all ofthese supposedly eco-friendly fuels for vehicles and factories. The 2003 EuropeanUnion Biofuels Directive, which demands that all member states aim to have5.75 percent of transportation run by biofuel in 2010, is now under review.

“If you make biofuels properly, you will reduce greenhouse emissions,”said Peder Jensen, of the European Environment Agency in Copenhagen. “But thatdepends very much on the types of plants and how they’re grown and processed.You can end up with a 90 percent reduction compared to fossil fuels — or a 20percent increase.”

He added, “It’s important to take a life-cycle view,” and not to“just see what the effects are here in Europe.”

In the Netherlands, the data from Indonesia has provoked soul-searching, andhelped prompt the government to suspend palm oil subsidies. The Netherlands, aleader in green energy, is now leading the effort to distinguish which biofuelsare truly environmentally sound.

The government, environmental groups and some of the Netherlands’ “greenenergy” companies are trying to develop programs to trace the origins ofimported palm oil, to certify which operations produce the oil in a responsiblemanner.

Krista van Velzen, a member of Parliament, said the Netherlands should paycompensation to Indonesia for the damage that palm oil has caused. “We can’tonly think: does it pollute the Netherlands?”

In the United States and Brazil most biofuel is ethanol (made from corn inthe United States and sugar in Brazil), used to power vehicles made to run ongasoline. In Europe it is mostly local rapeseed and sunflower oil, used to makediesel fuel.

In a small number of instances, plant oil is used in place of diesel fuel,without further refinement. But as many European countries push for more greenenergy, they are increasingly importing plant oils from the tropics, since thereis simply not enough plant matter for fuel production at home.

On the surface, the environmental equation that supports biofuels is simple:Since they are derived from plants, biofuels absorb carbon while they are grownand release it when they are burned. In theory that neutralizes their emissions.

But the industry was promoted long before there was adequate research, saidReanne Creyghton, who runs Friends of the Earth’s campaign against palm oilhere.

Biofuelswatch, an environment group in Britain, now says that “biofuelsshould not automatically be classed as renewable energy.” It supports amoratorium on subsidies until more research can determine whether variousbiofuels in different regions are produced in a nonpolluting manner.

Beyond that, the group suggests that all emissions arising from theproduction of a biofuel be counted as emissions in the country where the fuel isactually used, providing a clearer accounting of environmental costs.

The demand for palm oil in Europe has soared in the last two decades, firstfor use in food and cosmetics, and more recently for fuel. This versatile andcheap oil is used in about 10 percent of supermarket products, from chocolate totoothpaste, accounting for 21 percent of the global market for edible oils.

Palm oil produces the most energy of all vegetable oils for each unit ofvolume when burned. In much of Europe it is used as a substitute for diesel fuel,though in the Netherlands, the government has encouraged its use for electricity.

Supported by hundreds of millions of euros in national subsidies, theNetherlands rapidly became the leading importer of palm oil in Europe, taking in1.7 million tons last year, nearly double the previous year.

The increasing demand has created damage far away. Friends of the Earthestimates that 87 percent of the deforestation in Malaysia from 1985 to 2000 wascaused by new palm oil plantations. In Indonesia, the amount of land devoted topalm oil has increased 118 percent in the last eight years.

In December, scientists from Wetlands International released theircalculations about the global emissions caused by palm farming on peatland.

Peat is an organic sponge that stores huge amounts of carbon, helping balanceglobal emissions. Peatland is 90 percent water. But when it is drained, theWetlands International scientists say, the stored carbon gases are released intothe atmosphere.

To makes matters worse, once dried, peatland is often burned to clear groundfor plantations. The Dutch study estimated that the draining of peatland inIndonesia releases 660 million ton of carbon a year into the atmosphere and thatfires contributed 1.5 billion tons annually.

The total is equivalent to 8 percent of all global emissions caused annuallyby burning fossil fuels, the researchers said. “These emissions generated bypeat drainage in Indonesia were not counted before,” said Mr. Kaat. “It wasa totally ignored problem.” For the moment Wetlands is backing thecertification system for palm oil imports.

But some environmental groups say palm oil cannot be produced sustainably atreasonable prices. They say palm oil is now cheap because of poor environmentalpractices and labor abuses.

“Yes, there have been bad examples in the palm oil industry,” said ArjenBrinkman, a company official at Biox, a young company that plans to build threepalm oil electrical plants in Holland, using oil from palms grown on its ownplantations in a manner that it says is responsible.

“But it is now clear,” he said, “that to serve Europe’s markets forbiofuel and bioenergy, you will have to prove that you produce it sustainably— that you are producing less, not more CO2.”

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