Thanks to an extensive catalogue of uses, both nutritionally
and as a feedstock for biofuel and its comparatively low price compared to
competitor oils, palm oil has become ubiquitous, with a global market value of
almost 100 billion US dollars. However, concerns about the environmental
impacts of its cultivation particularly in relation to consequential impacts on
tropical deforestation, have cast palm oil as a villain across the sectors
where it sees use. These concerns are recognised, but how serious are they? and
are there alternatives available if access to palm oil is increasingly
restricted?
A “High Risk” Feedstock
In February of this year, the European Commission reported
on its activities designed to classify crop-based biofuels according to their risk
of incurring land use change, as part of the preparations for the parliamentary
and EU council approval of the Revised Renewable Energy Directive (RED II).
Feedstocks classed as being “high risk” are planned to be phased out by 2030,
and by then will not be eligible to receive support from EU member states. Palm
oil was the only feedstock classified as posing a “high risk”. This attracted an
immediate backlash from major palm oil-producing nations such as Indonesia and
Malaysia, who have threatened WTO action, as a significant part of these
countries’ exports is accounted for by palm oil and palm oil products, of which
a large percentage is exported to the EU. However, these countries face an
uphill battle to demonstrate that palm oil is a sustainable option,
particularly from an environmental point of view.
The rationale behind the EU’s decision takes account
of several factors: indirect land-use change (ILUC), loss of biodiversity, and
greenhouse gas emissions.
ILUC is a problem that plagues all biomass crops: it is a theory
of unintended consequence that diversion of any food crop or arable land to
industrial uses, results in the food production demand being displaced to other
parts of the country or globe potentially resulting in undesirable changes in
land use. It is difficult to prove when and where ILUC has taken place, and
much of the analysis relies on modelling of trade flows and demand impacts. However,
it is accepted in the sustainability paradigm that it does occur. This is an
issue that affects all biomass crops including all vegetable oils (and thus all
the alternatives to palm oil). Herein one of the key advantages of palm as a
vegetable oil makes itself plain: palm oil has a much higher land use
efficiency (oil output/ha of land) than other vegetable oils. For example,
rapeseed requires nearly five times, and soya nearly eight times as much land
to produce the same yield, according to a 2018 report by the IUCN. So why, if this is the case, is palm oil specifically
considered such a problem?
In the eyes of the layperson, the issue is most commonly
linked to potential impacts on biodiversity: oil palm only grows in tropical
conditions, which by association is linked to the issue of native rainforest being
cleared in order to make way for palm oil plantations. The media spotlight has
frequently been shone on the island of Borneo in Indonesia, where much of the
rainforest has been cleared, leading to fragmented orangutan populations, and a
loss of biodiversity. However, palm oil is also not unique in this regard:
other vegetable oils such as soybean oil are also derived from soya grown on
land previously high in biodiversity (although soybean does have a much wider
distribution in terms of its cultivation, not being confined to the tropics).
Any deforestation to make way for cropland is going to reduce biodiversity and
have a range of other detrimental impacts, although it is difficult to quantify
to contribution of palm oil alone to these effects.
Preservation of biodiversity is not the primary concern
behind palm oil restrictions: greenhouse gas emissions are a key consideration.
Clearing any forested land results in a large release of soil carbon into the
atmosphere, but some soils, with high levels of organic matter are more
prolific in this regard than others. Unfortunately, tropical rainforests
release particularly high levels of carbon, but a greater concern is that much
of the land on which oil palm is grown was once peatland. Draining of peatland
to permit cultivation results in a significant release of carbon dioxide as the
carbon in the soil starts to oxidise in aerobic conditions. It is unsurprising
then that the EU would want to distance itself from any feedstock grown on
former peatland, and current bioenergy and biofuel policies do not provide
support for any biomass feedstocks grown on peat. Whilst it should be clear
that the EU does not wish to rely on crop-based biofuels for any longer than
necessary (as all have effects, at differing scales), palm oil does appear to
have the most severe negative impact, which is the EU’s justification for its decision
to prioritise its phase-out for use in biofuel production and bioenergy
generation at least.
Any land cleared that releases carbon into the atmosphere will
incur a carbon debt unless it is allowed or encouraged to regenerate to its
original state, but this only happens over a long a timescale (measured in
decades).
Alternatives to Palm Oil
According to the aforementioned IUCN report, the most
sustainable option is to continue to grow and use palm oil but to cease all
further deforestation to develop plantations. However, demand will continue to increase
outside of the EU, and this policy may not be a sustainable option long-term
and indeed attractive to the major oil producers without some form of recompense.
Other vegetable oils used for biofuels include soya and
rapeseed. Of these, only soyabean oil has a global production level approaching
palm’s. The EU itself leads the global production of rapeseed, but unfortunately,
production levels are not high enough to replace palm oil in the EU biofuels
mix, The EU already relies heavily on imported soybean, and on imported palm
oil, to meet its oil balance needs even after accounting for high domestic
levels of production.
Therefore, it is not a case of simply replacing one biofuels
crop with another, as all carry the threat of ILUC to a greater or lesser
degree, even if they result in reduced greenhouse emissions and biodiversity
loss, as production would have to dramatically increase to fill the gap left by
palm oil.
The new RED II, driving EU renewable energy targets from
2020 to 2030 is quite clear on the direction the EU wishes to take: towards
electrification of transport and towards development fuels and new low carbon
fossil fuels to fuel hard to decarbonise transport sectors such as heavy goods
vehicles and aviation. Successful introduction would over time result in a
complete phase-out of not just palm oil, but all crop-based biofuels. As full
electrification is some way off, the interim answer, as far as the EU is
concerned, is advanced biofuels – biofuels developed utilising waste as a
feedstock – which show potential for large greenhouse gas mitigation, as well
as preventing waste from going to landfill. This technology also requires a
significant scale-up and widening of its deployment before it will be able to
fill the gap. Hopefully this will take place over the 10 years of palm oil’s
phase-out.
It is clear that the risks have been weighed up
and deemed too severe, and palm oil is set for phase-out. It is too early to
determine what a bioeconomy without palm oil looks like, but there is plenty of
scope for development. There must be: palm oil leaves a big pair of shoes to
fill.