Environmental concerns mount as palm oil production surges

EoF News / 28 May 2007

Key points on the environmental impact of palm oil (mongabay.com, May 15, 2007)-- The booming market for palm oil is driving record production but fueling rising concerns over the environmental impact of the supposedly "green" bioenergy source.

The two leading producers of palm oil, Malaysia and Indonesia, have rapidly expanded palm oil production in recent years, often at the expense of biodiverse rainforests and carbon-rich peatlands that store billions of tons of greenhouse gases. Environmentalists say that due to these factors, burning of palm oil can at times be more damaging the global climate than the use of fossil fuels.

"As much as 2000 million tonnes of carbon dioxide are released annually from just the logged and drained peatlands of South-east Asia; 8% of all global emissions," said Marcel Silvius of Wetlands International, an environmental group that has analyzed the climate impact of peatlands destruction in Indonesian. "Over 50% of new plantations are allocated on peatlands. As such palm oil is a major driver in the further destruction of the remaining peat swamp forests and a significant cause for global CO2 emissions."

European governments have recently expressed concern over the apparent unsustainably of oil palm cultivation in peatlands. Last week Dutch minister of the Environment, Jacqueline Cramer, finalized a framework that set guidelines for the sustainable production of palm oil. While the initiative is non-binding in order to skirt World Trade Organization (WTO) regulations, it could set a precedent for other European nations to follow. The U.N. has also introduced language on palm oil production.

Both European governments and the U.N. are looking at the example set forth by the Roundtable on Sustainable Palm Oil, an industry group that seeks to cultivate oil palm can in a manner that helps mitigate climate change, preserves biodiversity, and brings economic opportunities to desperately poor rural populations.

Palm Oil Production in Malaysia and Indonesia

In Malaysia oil palm production has risen from 151,000 metric tons in 1964 to 16.5 million metric tons in 2006. Over the same period, exports have climbed from 141,000 metric tons to 13.1 million metric tons. Oil palm plantations grew from 60,000 hectares in 1960 to more than 3 million hectares in 2001. In 2004, 43% of these of these were located in Sabah and Sarawak, on the island of Borneo. However, because virtually all suitable land is used in Peninsular Malaysia, expansion is expected mostly to occur in Malaysian Borneo and, to a greater extent, Kalimantan. Oil palm cultivation has increased from 186,744 hectares in Sabah and Sarawak in 1984 to 1,673,721 hectares at the close of 2003.

Between 1964 and 2006 Indonesian oil palm production has increased from 157,000 metric tons to 15.9 million metric tons while exports have jumped from 126,000 metric tons to 11.6 million metric tons. In Indonesian Borneo, Kalimantan, oil palm plantations have expanded from 13,140 hectares in 1984 to nearly one million hectares at the end of 2003. Overall, oil palm cultivation has expanded in Indonesia from 600,000 hectares in 1985 to more than 6 million hectares by early 2007, and is expected to reach 10 million hectares by 2010.

The oil palm

Palm oil is derived from the plant’s fruit, which grow in clusters that may weigh 40-50 kilograms. A hundred kilograms of oil seeds typically produce 20 kilograms of oil, while a single hectare of oil palm may yield 5,000 kilograms of crude oil, or nearly 6,000 liters of crude oil that can be used in biodiesel production. At $400 per metric ton, or about $54 per barrel, palm oil is competitive with conventional oil. In the future, palm oil prices are expected to fall further as more oil palm comes under cultivation.

Original article