Does biofuel have a palm oil problem?

Biofuel is gaining prominence in the power industry. Yet its eco-credentials largely depend on what fuel is used in its production, and when the French Government banned palm oil from the country’s biofuel scheme, it was hailed as a positive step in the fight against wide-scale deforestation. Scarlett Evans asks, what exactly are the dangers of palm oil, and what does this case tell us about how biopower should be regulated?  

Consumer dissent against palm oil has been rumbling for years now, with rising awareness of its environmental impacts turning opinions against its use in beauty products, food supplies, and now energy production. The French Government’s announcement is only the latest step in the bid to dampen the use of palm oil, with the European Union (EU) tightening its net around the contentious substance as member countries begin to define legislation to prevent environmental damage.

Top palm oil producing countries, such as Indonesia and Malaysia, are fighting back however, and the energy company Total is gearing up to contend the recent law in France. Balancing economic gains with environmental obligation is proving rocky terrain, and it seems action against unethical biofuels is only just beginning.

/ Expanding palm oil plantations contributes to deforestation in Southern countries. /

The French ban

A long-contested decision, palm oil’s exclusion from the French biofuel scheme came into effect in January 2020. Under the law, palm oil cannot be considered a biofuel unless producers can guarantee its production has not added to greenhouse gas emissions, with the country’s constitutional court saying the measure is in line with the public interest of environmental protection.

/ Expanding palm oil plantations contributes to deforestation in Southern countries. /

“Expanding palm oil plantations contributes to deforestation in Southern countries,” French MPs stated in their amendment to the law. “...if the effect of indirect land-use change was included in the greenhouse gas balance, palm oil would be the most damaging biofuel for the climate.”

A March 2019 press release from the EU said palm oil, of all the biofuel sources, was proven to be associated with the highest level of deforestation, with 45% of palm oil expansion between 2008 and 2015 taking place in high carbon stock areas.

/ We demonstrated that the whole supply chain was contaminated with illegalities. /

Greenpeace’s efforts to secure the ban 

The efforts of Greenpeace France were instrumental in lobbying for the ban, and the organisation was especially vocal against objections from Total. The oil and gas giant had only recently invested €300m to convert its crude oil refinery in La Mède to a biofuel plant, and CEO Patrick Pouyanne warned palm oil’s exclusion could lead to a loss of up to €80m ($88m) for the site.

“It’s been a very big fight,” says Clément Sénéchal, climate and forest campaign officer at Greenpeace France. “And the French Government is not as progressive as it seems - it is at the centre of a false image. Our government mainly focuses on protecting the vested interests of corporations like Total, and that’s why it didn’t side with us on this matter initially. The strategy was to almost bypass the government by going via the MPs.”

/ We demonstrated that the whole supply chain was contaminated with illegalities. /

As part of its campaign against Total, Greenpeace released a report investigating the company’s biofuel supply chain, with findings showing most of the oil used in La Mède was ‘without guarantee and therefore potentially associated with deforestation.’

“We demonstrated that the whole supply chain was contaminated with illegalities,” Sénéchal says, “and the claims of Total about only using 100% traceable oil was false.”

While the efforts of Greenpeace have so far been fruitful, palm oil’s exclusion is not yet set in stone and the ban is expected to be up for debate once more during discussions for the 2020 finance bill. However the increased pressure on the government has made environmentalists optimistic for success, and for similar measures to be echoed elsewhere. 

/ The problem is that whilst biofuels are targeted, the world is still addicted to palm oil. /

What’s next for biofuel?

Speaking with Lisa Randone, national manager for knowledge and research at Bioenergy Australia, she says that while the war on palm oil is a growing phenomenon, it’s receiving particular fervency in the biofuel industry.

“Palm plantations have caused huge deforestation in South-East Asia, and the problem is compounded by the draining of the peat bogs and subsequent fires caused when the land is drained and cleared,” she says. “The problem is that whilst biofuels are targeted, the world is still addicted to palm oil for food and household products, detergents etc.”

/ The problem is that whilst biofuels are targeted, the world is still addicted to palm oil. /

Indeed, the new spotlight on biofuel’s ethical production is cranking up industry-wide efforts to mitigate damages. The EU finalised tariffs on Indonesian biodiesel imports in December 2019 - a move which itself followed the decision to phase palm oil out of renewable transport fuels. The duties, set at between 8% and 18%, are anticipated to remain in place for five years. 

Such measures have sparked tensions with the top palm oil producing countries of Malaysia and Indonesia, and Master Parulian Tumanggor, chairman of Indonesia’s biofuel producers association, told Reuters his group would be filing a legal challenge to the new tariffs at the World Trade Organization.

/ We have to make sure soy-based biofuels are also excluded from the list because they generate a lot of deforestation in the Amazon. /

A wider campaign of discouragement

For others, the EU has not gone far enough, and some industry members think biofuel use should be more widely discouraged. Randone says objections to using food crops for fuel has made palm oil’s presence in biofuel even more contentious, and this stance was evidenced in a statement from Greenpeace. In an email, the organisation said it opposed any agricultural crops to be grown for the purpose of biofuel, saying land “should be used first and foremost for food production”, and adding that any ban on unethical biofuels should extend to all agricultural commodities, not just palm oil.

“If using the biomass comes at the expense of natural carbon stock and sinks like forests,” says Sénéchal, “then it’s not a fit for purpose solution. The shift towards biofuels is a shift towards the end of tropical forests. The solution won’t come from biofuels, it will come from energy saving initiatives.”

/ We have to make sure soy-based biofuels are also excluded from the list because they generate a lot of deforestation in the Amazon. /

When asked what’s next for Greenpeace’s campaign, Sénéchal said they are setting their sights on expansion - both by country and also to other crops used for biofuel.

“We have to make sure soy-based biofuels are also excluded from the list because they generate a lot of deforestation in the Amazon,” he says. “That may be the next battle. We’re also trying to expand this into other European countries who are very interested in what we have done and what we have achieved. In the end, we need to make sure the European legislation gets stronger.”

Playing catch-up in the US

“In Europe, offshore wind has been there for a number of years, but I think in the United States we're a little bit behind that,” said Karustis.

Should it be successful, Halo’s approach could lead to a surge in US onshore wind, which has historically lagged behind other regions in terms of wind installation and production. Since 2016, according to the International Energy Agency, the US has installed just 22.6GW of new onshore wind capacity, compared to 30.7GW in the EU, and 50.3GW in China, struggles that Karustis hopes to address.

Last December, the Chinese Government approved a number of new offshore wind projects, totalling 13GW of production and costing around $13.3bn, as the country continues to invest in utility-scale power. Karustis hopes projects like Halo’s distributed turbine can contribute to a more balanced wind sector in the US, with both large- and small-scale operations expanding renewable power.

“The large-scale wind turbines wouldn't be phased out, it's kind of an ‘all of the above’ thing,” he said. “The large wind farms play a very important role for us in reducing the carbon footprint globally, and hopefully the micro wind market is going to augment that by producing energy where energy is being used. It's a good two-pronged approach.”

This two-pronged approach also includes other renewable power sources, including solar and utility-scale wind; Halo is not trying to replace all clean energy with its turbines, but offer another option for people eager to engage in renewable power, who may have been historically sidelined due to the high costs of building utility-scale facilities or the unsuitable geographical characteristics of the places they live.

“When you look at that market we're very excited because just as megawatt-scale wind is a large market, I think distributed wind can be as big of a market or bigger over time,” said Karustis.

“When you have incentives and improvements in the technology, the costs go down, so you can be more competitive and compete, and that's certainly the case with megawatt-scale wind,” he continued. “Just 15/20 years ago, it wasn't competitive with natural gas [and] coal, but it is now. So those government policies have helped and they've driven the technology improvements, so it's all bundled together.”