Is Palm Oil Sustainable?

Palm oil has long been used as a biofuel but there has been some friction recently between the Southeast Asian producers of palm oil and European environmentalists with respect to its sustainability.

Environmental NGOs say that biofuels from Asia reduce biodiversity because of the fact that forests are cut down to make way for palm oil plantations.

However, R. Vasu Vasuthewan, the Sales and Marketing Director of Mission New Energy Limited, a leading Malaysian palm oil producer, rejects such arguments.

"In Malaysia and Indonesia, only about 10 million hectares are cultivated with palm. Worldwide, nearly 100 times more land is devoted to the cultivation of soya and other types of crops,” he said.

“These 10 million hectares are producing so much oil that palm oil is the number one oil in the world -- very productive. This is now happening and if you bear in mind that it takes three to four years for a palm to mature, deforestation is not a new issue."

Green colonialism

Asian producers accuse the Europeans of “green colonialism”. They argue that the real issue is that European countries are competing with them on the global biofuel market and want to sell their rapeseed oil instead of palm oil.

Environmentalists, such as Jutta Poetz, the biodiversity coordinator of the RSPO, are also concerned by the widespread practice of cutting trees or branches illegally in Indonesian forests to produce palm oil.

“It has a very good price on the market so of course it is an incentive for people to go into illegality. It is the same as with any commodity that has a high value -- people are willing to risk a lot."

The destruction of the forest cover has led to rising carbon emissions and also poses a threat to the already-endangered wildlife, such as to orangutans.

Sustainability standards

Experts say that illegal palm oil enters the global supply chain at the farmer level. Farmers mix oil that has been produced both illegally and legally which makes it difficult to certify that the final product has been produced in a sustainable way.

The European Union has formulated certain standards for producing biofuels sustainably and R Vasu Vasuthewan thinks this is a good idea: “Many producers in developing countries have seen such sustainability issues as a political issue, as a trade barrier.”

“But if you go into the exact mechanism of the rules, then you realise that it is in fact levelling the playing ground. It in fact is applying a standard set of rules for everybody."

With the climate talks in Copenhagen coming up, the debate about "good" and "bad" biofuels and the consequences for the environment is likely to continue for some time.

Author: Debarati Mukherjee
Editor: Thomas Bärthlein