In a strongly finger pointing report, researchers writing under the brand of the Global Subsidies Initiative of the International Institute for Sustainable Development have blamed European biodiesel policy for contributing to destruction of tropical forests and their replacement with palm oil plantations.

The report states:

• The EU-27 is one of the key consumers of palm oil globally; its share of global palm oil consumption has remained relatively stable over the last 20 years, ranging from 12 to 15 per cent.
• Over 2006–2012, the EU-27 countries increased their total use of palm oil by 40 per cent, from 4.5 to 6.4 million tonnes,
• In 2012, about 1.9 million tonnes were used for biodiesel production and 0.6 million tonnes for electricity and heat generation. The bulk, 3.9 million tonnes, was used by the non-energy sector, which is represented mainly by food production, but also by the personal care (cosmetics, detergents) and oleo-chemical (paints, lubricants) industries.
• On the EU-27 scale, the biofuels industry has increased its use of palm oil by 365 per cent over 2006–2012, which can be linked primarily to the growth in biodiesel production stimulated by government policies during the same period. The increase in palm oil consumption in the biofuels sector has amounted to 1.6 million tonnes, or 80 per cent of the total increase in palm oil consumption in Europe (1.9 million tonnes) over 2006–2012.
• According to the UN Food and Agriculture Organization, on average, land planted with palm oil produces 5 to 10 times more oil per hectare (including palm kernel oil) than any other vegetable crop: 3.41 metric tonnes per hectare for palm oil, compared with just 0.68 metric tonnes for rapeseed [canola] and 0.36 tonnes for soy.
• As a result of its increasing production and availability, palm oil has been by far the cheapest vegetable oil on the world market. For instance, in July 2013 a tonne of palm oil was 27 per cent cheaper than a tonne of rapeseed or soybean oil
• For every extra tonne of biodiesel produced in the EU in 2006–2012, there was an increase of 110 kilograms of palm oil consumed as biodiesel feedstock. It has to be noted, however, that biodiesel production in the EU actually decreased in 2010, and, though it increased in 2011 and 2012, it still did not return to its 2009 historic maximum: palm oil consumption in the biofuel sector in Europe steadily increased over the observed period.
• By 2020 the EU biodiesel sector will consume around 2.6 – 2.7 million tonnes of palm oil, or 40 per cent more than in 2012.
• The only unequivocal way to cut this trend and prevent the further increase of palm oil consumption in the EU is to freeze its biodiesel production and consumption at current levels in accordance with the European Commission’s legislative proposal of October 17, 2012 that seeks to limit the contribution of food-based biofuels to meeting the EU target of renewable energy in transport by 2020 to 5 per cent from the current 10 per cent target. If the EU does not cut its current subsidies to biodiesel, it may, in an indirect way, lead to the cutting down of more rainforests, the conversion of more forest and peat land for palm oil plantations, and the emission of more carbon into the atmosphere.

GallonDaily’s take on this report is that, while there is a connection between biodiesel policy in the EU and increased palm oil production, the linkage is indirect and could be addressed in ways other than shutting down expanded use of biodiesel. After all, if the EU limits biodiesel production, without other policy initiatives,  the result will almost certainly be an increase in greenhouse gas emissions from use of fossil fuels.

On the other hand, the debate about palm oil use illustrates one of the significant challenges to product environmental claims such as  ‘renewable’, ‘bio-based’, and ‘made from agricultural resources’.  Just because a product is made from renewable resources does not necessarily mean that its environmental footprint is lower than that of the conventional product. Only a lifecycle analysis, or some similar lifecycle approach which considers unintended consequences as well as direct environmental effects, can determine whether a bio-based product is an appropriate solution to the environmental challenges that we face.

Canada’s IISD has rarely engaged in this kind of strident finger-pointing before, preferring to present factual reports that encourage readers to come to their own conclusions about environmental villains. Maybe this report indicates something of a new direction under the new President and CEO of IISD, Scott Vaughan, former Commissioner of Environment and Sustainable Development in the Office of the Auditor General of Canada.

The IISD report The EU Biofuel Policy and Palm Oil: Cutting subsidies or cutting rainforest?,  prepared for, and with the funding of Friends of the Earth Europe. can be found at http://www.iisd.org/media/press.aspx?id=254&utm_source=www.iisd.org&utm_medium=feed&utm_content=2013-09-16&utm_campaign=RSS2.0