Tag Archives: palm oil

A Cure Worse than the Disease? Biofuels in Planes

The 2019 report by the Rainforest Foundation Norway RFN is called ‘Destination Deforestation’ and reviewed the role of the aviation industry in contributing to the climate crisis, concluding that there’s a high risk that increased use of palm and soy-based biofuel in planes will lead to increased deforestation.

Finland, the world’s largest producers of renewable diesel and the only EU country that gives additional incentives for the use of palm oil products to manufacture biofuel, could spearhead the race towards deforestation, as areas of rainforest in countries like Indonesia or in South America are cleared to plant crops that will later be used to produce the fuel.  RFN says that meeting the aviation industry’s own climate-change targets to reduce emissions could result in 3.2 million hectares of tropical forest lost, an area larger than Belgium.

Researchers at Rainforest Foundation Norway believe the Finnish incentives for (Palm Fatty Acid Distillate) PFAD-based biofuels are likely to contribute to this deforestation, since Finland’s state-owned oil company Neste produces half of the world’s renewable diesel.  “Finland continues to treat the palm oil by-product PFAD as a waste, eligible for additional incentives. In addition, Finland is home to Neste, the world’s largest producer of hydrotreated biodiesel, and uses PFAD as a raw material. Therefore, Finland’s program could contribute to the massive deforestation discussed in our report” he explains.

With Finland left isolated as the only EU country to pay producers to use waste-classified PFAD in biofuel production, Rainforest Foundation Norway cautions that the country risks becoming a dumping ground for unsustainable raw material….“As long as PFAD is classified as ‘waste’, it enjoys huge incentives from the state. Biofuels made out of PFAD are completely exempt from carbon dioxide tax in Finland. Additionally, PFAD’s emissions can be discounted, and it is not subject to the same sustainability criteria as other raw materials.

With ‘flight shame’ gaining more momentum across the world, the aviation industry is desperate to find ways to make flying compatible with climate goals. While replacing fossil fuels with renewables sounds like a great idea, the sustainability of biofuels is highly dependent on the raw materials used to produce them…The most common aviation biofuels, Hydrogenated Esters and Fatty Acids (HEFA) fuels are produced from vegetable oils and animal fats. While the use of waste oils and other recycled materials is possible, the most viable raw materials for HEFA jet fuels are food crops.  “The cheapest and most readily available raw materials for HEFA jet fuel are palm oil and soy oil, which are closely linked to tropical deforestation” Ranum says.  The experts suggest that aiming to reduce emissions by increasing demand for palm and soy oil is a cure worse than the disease.

Elias Huuhtan, Report: Finland’s push to use biofuel could cause ‘massive deforestation, https://newsnowfinland.fi/ , Oct. 7, 2019

Making a Fortune from Climate Change

Eleven years ago Dharsono Hartono, a former JPMorgan Chase & Co. banker, spotted what he thought was a new way to make a fortune: climate change.The plan was to snap up rainforest in Borneo, preserve it from logging and sell carbon credits to big polluting companies in the developed world. The earth’s temperature was rising, and this was a way to profit by confronting the problem.  Investors around the world have poured money into assets like once-frozen farmland in Canada and groundwater basins in California, betting that warming temperatures will raise their value.  Another bet has been on what some investors hope will be the most profitable outcome of a warming climate: government regulation of carbon emissions. Those who correctly anticipate future government responses to climate change are likely to reap profits.

Mr. Hartono went in big. His company’s rain forest, a humid and swampy expanse home to orangutans and clouded leopards, is twice the size of New York City and has one of the largest carbon stores of any such project in the world.  Mr. Hartono has sold just 20% of his credits to environmentally conscious corporations voluntarily buying credits, and has lost around $20 million, burning through $5 million to $10 million a year in recent years. Other investors in Indonesia and Latin America who made similar bets, including one backed by Australian bank Macquarie Group , failed to sell credits and abandoned their rain-forest projects…

Only after actor Harrison Ford visited the project to shoot a documentary on climate change, and raised the issue with Indonesia’s forestry minister, did final approval come for most of the concession in October 2013. For an initial payment of around $3 million to the Indonesian government, Mr. Hartono’s company gained the rights to the forestland for 60 years.  By then, however, some environmentalists were questioning private carbon-selling projects like Mr. Hartono’s. They argued that buying up and preserving rain forest to sell credits wouldn’t decrease net deforestation, since palm-oil barons would simply work around the few protected plots in the forest.  U.S. legislation that would have put a price on carbon failed during the Obama administration. The European Union’s carbon market doesn’t include tropical forests amid worry that low-cost credits generated there would make it affordable to pollute…

The Paris climate accords are expected to lead to an international carbon market after 2020, where countries that exceed emissions targets can purchase offset credits from countries that reduce emissions beyond their targets, potentially opening up new opportunities for Mr. Hartono.

Excerpts fom One Man’s Money Draining Bet on Climate Change, WSJ, Dec. 27, 2018

Forest Fires and Haze

In 2015 a dry spell caused by the El Niño weather pattern made Indonesia’s forest fires especially severe. Smoke settled over Singapore for months and even reached Cambodia, Vietnam and the Philippines. At least 2m hectares of forest were burned. Dozens of people were killed and hundreds of thousands sickened. For much of October 2015 greenhouse gases released by those fires exceeded the emissions of the entire American economy. The losses over five months of fires amounted to around 2% of the country’s GDP…[The event has labeled  the 2015 Southeast Asian haze]

Between 2001 and 2014, Indonesia lost 18.5m hectares of tree cover—an area more than twice the size of Ireland. In 2014 Indonesia overtook Brazil to become the world’s biggest deforester.

One of the reasons for those forest fires is economic. The country produces well over half the world’s palm oil, a commodity used in cooking and cosmetics, as a food additive and as a biofuel. It accounts for around 4.5% of Indonesia’s GDP, and demand is still rising. To meet it, Indonesian farmers set fires to clear forest and make way for new plantations. Often these forests grow on peatlands, which store carbon from decayed organic matter; in tropical regions these hold up to ten times as much carbon as surface soil. Draining peatlands releases all of that carbon. The peat also becomes a fuel, so it is not just felled trees that are burning but the ground itself.

But politics also plays a part. … The president declared a moratorium on peatland-development licences and called for peat forests to be restored, even as his agriculture minister pointed out that burned peatland can be used for corn and soyabean planting….

Civil-society groups have had some success. At least 188 Indonesian palm-oil companies have made some sort of sustainability pledge, including five large multinational firms that in 2014 signed the Indonesian Palm Oil Pledge (IPOP), which commits them to avoiding deforestation and planting oil palms on peatland. Together those five firms account for 80% of Indonesia’s palm-oil exports.All the same, deforestation continues. Perversely, it may even have increased temporarily, as companies cleared as much land as they could before the agreement took effect. Besides, opaque supply chains allow companies to buy palm oil from suppliers not bound by IPOP.

Forests: A world on fire, Economist Special Report on Indonesia, Feb. 27, 2016

Palm Oil Industry: environmental and human impacts

Indonesia’s largest palm oil company, Sinar Mas, ran into trouble recently when communities in Liberia complained about a 33,000 ha. operation being developed on their lands by its indirectly-owned subsidiary, Golden Veroleum in Butaw District, Sinoe County. Alfred Brownell, the lawyer from Green Advocates representing the Kru tribes impacted by the project who is attending the 10th Roundtable on Sustainable Palm Oil (RSPO) being held in Singapore this week noted:

Golden Veroleum is in clear violation of the RSPO’s New Planting Procedure as it has not advertised its plans to clear and plant oil palms and carry out and publicise a High Conservation Value Assessment in advance of expanding its operations. Under the RSPO procedure, the company should now cease clearance until due process is followed. The villagers are concerned that their lands are being taken without their fully informed or free consent.

This is the second palm oil development involving a prominent RSPO member to run into controversy in Liberia. Last year, a subsidiary of Malaysia’s largest palm oil consortium, Sime Darby, was criticised for expanding its operations without respecting local peoples’ rights. The company was in the early stages of developing a 220,000 ha. operation but was halted in its tracks by complaints, which, to its credit, the company has responded to by entering into dialogue with the communities.

The spotlight is now on two large palm oil operations in Cameroon. One is planned by a company called BioPalm, a subsidiary of India-based corporation Siva Group which is marking out its planned operations without consultation on the lands of the Bagyeli “Pygmies” in Océan Département in western Cameroon. The company claims to be an RSPO member but does not show up on the RSPO’s membership lists. Messe Venant, Project Coordinator of the community-based indigenous NGO Okani says:  As the affected Bagyeli communities have told us, the forest is their memory. If they lose it, they lose their past, their present and their future. They will no longer be Bagyeli. To destroy the forest is to reduce them to nothingness.

Another palm oil developer is SG Sustainable Oils Cameroon PLC (SGSOC), owned by Herakles Farms from the USA and an affiliate of Herakles Capital, which is also involved in the telecommunications, energy, infrastructure, mining and agro-industrial sectors in Africa. SGSOC is developing an oil palm plantation further north in Cameroon, but has also run into sustained opposition from local communities and concerned NGOs and has announced it will pull out of the RSPO.

Other cases are highlighted in a searching review of 15 companies’ operations carried out by the Forest Peoples Programme and SawitWatch with a consortium of other NGOs and community organisations in Liberia, Cameroon, the Democratic Republic of Congo, the Philippines, Malaysia and Indonesia.

One case examined is the operation being developed by Genting Plantations, a client of HSBC, and a subsidiary of the vast Genting group which runs a casino, hotel and property empire in Malaysia. Both companies are prominent RSPO members. Genting is now in a protracted land dispute with the Dusun and Sungai peoples in Tongod District in Sabah over the imposition of the oil palm plantation. Leonard Alaza representing the Indigenous Peoples Network of Malaysia or Jaringan Orang Asal SeMalaysia (JOAS) at the 10th Roundtable of the RSPO underway in Singapore, says:  The communities have been objecting to this plantation since 2000 and filed a court case 10 years ago asking the court to recognise their rights and freeze the company’s expansion. But instead of recognising our rights, as the RSPO standard requires, the company has been contesting even the admissibility of our case and meanwhile has taken over and planted all the disputed lands.

Excerpt from Press Release of Forest Peoples Programme, New oil palm land grabs exposed: Asian palm oil companies run into trouble in Africa, Nov. 1, 2012