The Disastrous Local and Global Impacts of Tropical Biofuel ...

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ET FocusThe Disastrous Localand Global Impacts ofTropical Biofuel ProductionBy Lucas J. Patzek and Tad W. Patzekast November, Patricia A. Woertz, the CEOand president of Archer Daniels Midland,outlined a new growth strategy for the foodprocessinggiant. ADM, America’s biggest producerof corn ethanol, will expand its biofuel production,moving into Brazilian sugarcane for ethanol and Indonesianpalm oil for biodiesel.Woertz, a former high-ranking official atChevron, said ADM will get “long-term growthand returns by capitalizing on our globalstrengths and the changing dynamics of the globalenergy and food markets.”As ADM, one of the world’s largest food companies,seeks to increase profits, the continuingpush into the tropics by it and other biofuel producerswill only accelerate a potential ecologicalcatastrophe. Vast tracts of Malaysian and Indonesianforest have already been lost, and the increasingdemand for palm oil for biodiesel willcause further losses of tropical forests in theseand other equatorial countries.This deforestation will likely be devastating.And yet, despite the global push for biofuels, thepotential damage – increased soil erosion, huge carbondioxide emissions, biodiversity loss, and desertification– is largely being ignored.Here in the U.S. there has already been amplediscussion about biofuels in Brazil, so let us concentrateon Indonesia and the oil palm.The oil palm (Elaeis) is the most productive oilcrop in the world, with an average annual yield of3 to 4 tons of crude palm oil per hectare for majorproducer countries. While the soybean is currentlythe world’s leading source of vegetable oil, with 30percent of global vegetable oil consumption in 2004,the oil palm is a close second with 29 percent of themarket. The fruit of the oil palm consists of a kernel(seed) within a hard shell that is surrounded bya fleshy pulp, the mesocarp. Commercial palm oilis derived from this mesocarp. The palm kernel oilis different. These two oils have distinct fatty acidcompositions and hence differing uses. Palm oil is aneven 50/50 split between saturated and unsaturatedfat, while palm kernel oil’s saturated/unsaturatedratio is 82/18. After oil from the kernal is extracted,a proteinaceous residue remains, palm kernel cake,which is a valuable animal feed.Traditionally, about 80 percent of palm oil is foredible use. Common food products made from palmoil and palm kernel oil include cooking oils, shortenings,vegetable ghee, margarines and spreads, andconfectionery and non-dairy products. Palm oil hasseveral properties that contribute to a long shelf lifefor end products: it is resistant to oxidative deterioration,suffers lower polymer formation, and has vitaminE as a natural antioxidant. The oil, therefore,is particularly suitable for use in hot climates and asa frying fat in the snack and fast food industry. Asfor its non-edible use, it is a good raw material forproducing oleochemicals, fatty acids, fatty alcohols,glycerol, and other derivatives for the manufactureof cosmetics, pharmaceuticals, bactericides, and otherhousehold and industrial products.Palm Oil Fruit photo by M.J. SilviusMarch 2007 19
ET FocusBurning Peat Swamp photo by M.J. SilviusDemand in the 18th century persuaded Europeansto plant oil palm plantations. The first largeplantation was established in Indonesia around 1911,and can be traced back to four seedlings planted atBogor Botanical Garden. From these seedlings theDeli dura (thick-shelled) palms developed, with betterfruit composition and a larger proportion of mesocarpthan in African palms. Southeast Asia, and specificallyMalaysia, has dominated the industry eversince. Malaysia and Indonesia together currently accountfor 86 percent of global palm oil production and91 percent of its global exports. Malaysia produces42 percent and remains the leading exporter with 48percent of the world market. Indonesia produces 44percent of the world’s palm oil and is a close secondin exports, with 43 percent of the market.Indonesia is a far larger country than Malaysiawith a correspondingly larger work force, and the expectationis that Indonesia will eventually surpassMalaysia as an exporter. As long as there is politicaland economic stability, Indonesia will remain thelargest producer in the world.The present success of the oil palm industryin these two countries can be attributed to theirfavorable climatic conditions, well-established infrastructure,and an unsurpassed knowledge base,both in the oil’s actual production and in its upstreamand downstream industries. Oil palm plantationsare being established at a rapid rate inseveral other Southeast Asian nations, includingThailand, the Philippines, and Papua New Guinea.However, by far the largest developments arefound in Indonesia. These developments are chieflyfunded by Malaysians, although China, Europe,and the U.S. are also key players.The attention given to biodiesel by the U.S.and E.U. governments has spurred the demand forpalm oil for biodiesel. The E.U. recently orderedthat 5.75 percent of all vehicle fuels come from renewablesources. The U.S. Internal Revenue Servicehas deemed oil palm as a feedstock for biodiesel,and therefore it is eligible for the biodiesel taxcredit of a penny per percent of biodiesel blendedwith petroleum diesel. These moves by the world’sbiggest motor fuel markets have led to a surge ofinvestment in Malaysian and Indonesian palm oilplantations. Indonesia’s largest plantation company,PT Astra Agro Lestari, has seen its shares jumpby about 80 percent over the past year.THE FIRES ARE HARD TO CONTROL ANDSPREAD EASILY TO ADJACENT FORESTS.In Indonesia, the oil palm plantations are ownedand operated by many of the same companies that operatelogging, wood-processing, and pulp industries.(The Salim Group, the Raja Garuda Mas Group, andthe Sinar Mas Group are all prime examples.) A naturalresult of this conjoining has been an increasein illegal and damaging land use. A company with aplantation concession may only be interested in theland’s timber. The trees will be cut down and hauledaway, no replanting effort will ensue, and the landwill be left deforested and degraded.Companies commonly set fires to clear land forplantations. Besides being illegal in many countries,including Indonesia, the fires are hard tocontrol and spread easily to affect adjacent forestsand communities. In 1997 and 1998 fires ragedthrough 6 percent of Indonesia, burning 11.7 millionhectares of land. The majority of the fires occurredon plantation company land, and threequarterswere oil palm plantations. The governmentaccused 176 companies of starting thesefires, of which 133 were oil palm plantation companies.Just 5 companies were actually taken tocourt and only one was penalized.The widespread tropical forest and peat firesin Indonesia during 1997, combined with the firesin Central and South America and in the borealregions of Eurasia and North America, emitted7.7 billion tons of carbon dioxide. The cumulativeemissions from these forest fires rival the world’stotal anthropogenic emissions. Tropical forest andpeat burning in Indonesia has continued unabated.And these oil palm plantations can never sequesterback the carbon dioxide that is released inforest and peat burning.20 Energy Tribune
Page 1: March 2007www.energytribune.comAMER

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