How palm oil fell from future fuel to eco-poison

Just a few years ago, palm oil was hailed as the elixir to save the planet: made from vegetables grown in tropical lands, it would become the fuel of the future. Yet today it is seen as an environmental catastrophe, a crop whose cultivation lays waste to rainforests, while creating a biodiesel that releases three times the greenhouse gases emissions of fossil diesel.

Now the European Union has turned decisively against palm oil. On March 13 the European Commission set new criteria for its use in biofuels, a move that sets the bloc up for a potential trade war with producers in south-east Asia. The measure explains what sort of biofuel may be counted toward the EU’s renewable-energy goals by introducing a certification system. The use of more harmful biofuel feedstocks like palm oil will be capped at 2019 levels until 2023 and reduced to zero by 2030.

Even before the latest decision, Indonesia and Malaysia, which together account for 85% of global palm oil supply, warned they would launch a World Trade Organisation challenge against the “discriminatory” measures.

The tide has turned

More than half of almost 8 million tonnes of palm oil used in the EU ends up as fuel for cars and trucks, about two-fifth is for food, feed and industry, while one tenth goes to heating and electricity. There have been recent plans to scale up the use of palm oil in air transport, with Indonesia even attempting to pressure the EU, by demanding to build palm oil jet fuel plants in France as a condition for its airlines to buy Airbus planes.

But the tide has turned in the EU. The Commission explained that palm oil cultivation has led to industrial deforestation, threatening biodiversity and increases greenhouse gas emissions, which in turn drives global warming. The Commission concluded that 45% of the expansion of palm oil production since 2008 led to destruction of forests, wetlands or peatlands and subsequent greenhouse gas releases. That compared to 8% for soybeans and 1% for sunflowers and rapeseed.

Cautionary tale

In January 2018, the European Parliament proposed to end public subsidies for the use of palm oil biofuels in 2021, followed last November by a vote to phase out highest-emitting biofuels made from palm and soybean oil.

Campaign group Transport & Environment (T&E) welcomed the labelling of palm oil as unsustainable as “a milestone”, but it said the victory was only partial as soybean oil and some palm oil could still be labelled green. “The decision to label palm oil as unsustainable is a breakthrough,” said Laura Buffet, T&E clean fuels manager. “There is no such thing as green palm oil or soy biodiesel. The fuels of the future aren’t based on food, they’re based on sustainable wastes, residues and electrons.”

The rapid rise and fall of palm oil is a cautionary tale. Policy-makers were initially thrilled about its high value energy and renewable qualities, showering it with government subsidies. But the other costs soon emerged. Cultivating palm oil meant clearing of huge areas of southeast Asian rainforest. Palm plantations were often created by draining and burning peatland, the organic sponge that stores huge amounts of carbon. Indonesia became the world’s third-leading producer of carbon emissions after the United States and China.

This likely marks the end of palm oil as a transport fuel in Europe. As the world slowly moves on a more sustainable economic path, there will inevitably be some false trails. For the EU, palm oil was one of them.