Palm oil

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Bioenergy > Feedstocks > Oils and fats > Palm oil

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Palm oil is a form of edible vegetable oil obtained from the fruit of the oil palm tree. The palm fruit is the source of both palm oil (extracted from palm fruit) and palm kernel oil (extracted from the fruit seeds). In addition to being used as cooking oil and as a component of many processed foods, palm oil is used to make biodiesel. Palm oil is one of the few vegetable oils relatively high in saturated fats (such as coconut oil).

• As of 2007, Indonesia and Malaysia produce 80% of the world's palm oil. (Source: Wikipedia).
• As of 2007, the world's largest importers of palm oil are China and India[1]; The Netherlands is the largest importer of palm oil in the European Union.[2]

Contents 1 Events 2 History 3 Sustainability 3.1 Greenhouse gases (CO2) 3.2 Biodiversity 3.3 Pollution 3.4 Land degradation 3.5 Social sustainability 3.6 Species conservation 4 Technology/Science 4.1 Properties 4.2 Technology 5 Economics/Policy 6 News 7 Publications 8 Regions/Countries 9 Organizations 10 Other oil palm products 10.1 Palm oil leavings 11 References

Events

• 5 March 2007, Paris, France: Paris International Agricultural Fair: Sustainable palm oil production: research needs.

• 19-20 August 2008, Kuala Lumpur, Malaysia: International Conference on Oil Palm Biomass 2008. (Themes: oil palm, biomass)

History

Palm oil was long known of in West African states, and amongst West African peoples, and saw widespread use as a cooking oil. However, palm oil remained rare outside West Africa. During the early nineteenth century, palm oil became a highly sought-after commodity by British traders, the oil being used as industrial lubricant for the machines of Britain's ongoing Industrial Revolution, as well as forming the basis for soaps such as Palmolive. By c. 1870, palm oil constituted the primary export of West Africa. By the 1880's, cocoa became more highly sought-after, leading to the decline of the palm oil trade. (Source: Wikipedia) Palm oil was first introduced to Malaysia in 1870 as an ornamental plant and is now a leading agricultural crop. (source: MPOB)

Sustainability

Greenhouse gases (CO₂)

• Burning of forests to clear ground can cause significant air pollution and releases large quantities of CO₂. (Reference needed)

Biodiversity

• Tropical forests are often cut or burned down to create palm oil plantations, causing losses of biodiversity. (Reference needed)
• Orangutans, the only Asian great ape, which live entirely in Malaysia and Indonesia, are threatened with extinction by the rapid expansion of palm oil plantations (Source: www.plosbiology.org).

Pollution

• Large scale burning of forest to clear land for palm oil in Indonesia is causing pollution levels to climb in Southeast Asia, resulting in mounting haze-related health problems, traffic accidents, and associated economic costs. (Source:mongabay)

Land degradation

Social sustainability

• In Indonesia, land for plantations is often allegedly sold to companies without consultation or compensation for the indigineous people who are living there and whose livelihood comes from the forest¹.

Species conservation

• The rapid conversion of Indonesian rain forest into oil palm plantations is a direct threat to the survival of orangutans in the wild. Learn more here.

Technology/Science

Properties

• Oil palm is regarded as the most cost-effective vegetable oil crop, with average yields of 3.5-5.0 t of palm oil per hectare per year, making it a very efficient feedstock for conversion into biofuel. (Source: MPOB)
• Palm oil is very high in saturated fats.

Technology

Economics/Policy

• Some researchers have suggested that anything above $55 a barrel makes palm oil-based biodiesel a commercially viable option. (Reference needed)
• Most active biodiesel plants are heavily subsidized by the government and may not be sustainable in a truly competitive market. (Reference needed)
• In 2007, some members of the European Parliament have called for a ban on palm oil biodiesel due to increasing sustainability concerns (see articles below).

News

• First GreenPalm Certificates Traded, 4 September 2008. In its newsletter, Greenpalm announced that "just hours after the first GreenPalm certificates were offered for sale on our website (...), a bid of $50 per certificate, was received and accepted. Further bids have subsequently been made.
  The purchaser of the first GreenPalm certificates will now be able to prove that their business, or brand, supports the production of sustainable palm oil.
  The producer of that palm oil, the first in our scheme to be successfully audited against the new and rigorous Roundtable on Sustainable Palm Oil (RSPO) audit, has earned a worthwhile premium for producing palm oil sustainably."

• Malaysia, Indonesia to cooperate on biofuels, 5 August 2008 by Reuters: "Malaysia and Indonesia will cooperate in a biofuel development program, and may use the same biofuel specifications and amount of blending, Malaysia's commodities minister said on Tuesday."
  • "Indonesia and Malaysia, the world's top two palm oil producers, together account for more than 80 percent of the world's crude palm oil output."[3]

• Indonesia adopts stringent "green" palm oil standard, May 7 2008 by Reuters. "Indonesia, the world's biggest palm oil producer, plans to take firm measures aimed at ensuring palm oil firms meet stringent standards before labeling their products as eco-friendly, an industry watchdog said on Wednesday."

• Malaysia reviews proposed biofuel policy amid rising palm oil prices, 12 February 2008, International Herald Tribune: "Malaysia is reviewing plans for mandatory blending of palm oil and diesel for biofuel after prices of the commodity more than doubled in two years".
  • "Crude palm oil prices have soared to more than 3,000 ringgit (US$928; €638) a metric ton from about 1,400 ringgit a ton since the National Biofuel Policy was formulated in 2006".
  • "Officials have said that oilseeds, jathropha and palm biomass are being explored as cheaper alternatives to palm oil in making biofuels."[4]

• Biofuels and banquets put pressure on stocks of palm oil, 9 January 2008 by the Times Online, reported that "The Malaysian Government has been forced to release emergency stocks of palm oil to break a wave of panic-buying after cooking oil prices soared. The crisis has prompted palm oil rationing in a country that is one of the world’s largest producers."

• "Australia's largest biodiesel plant puts production on hold" from Biofuels International, 14 December 2007. As prices for palm oil have doubled within the past twelve months, the Australian company Natural Fuel Ltd. has put "production on standby at the country's largest biodiesel plant, pending lower feedstock prices."

• Malaysia May Revoke Biofuel Permits as Palm Oil Rises, 11 December 2007, by Bloomberg: "Malaysia, the second-biggest palm oil producer, may revoke some licenses to produce biofuel from the commodity...as the surging price of the raw material makes the fuel too expensive to make, a minister said." The minister also noted that one of Malaysia's four biodiesel manufacturing plants may close in the face of increased prices for the feedstock, which has risen some 55 percent in the past year.[5]

• Dutch to deny palm subsidies until green levels met, 10 December 2007: "The Netherlands warned...it will not renew subsidies for palm-based biofuel until global producers meet its environmental requirements." The Netherlands reportedly will "mandate stringent criteria to help limit environmental damage" under its green energy subsidy system in 2008. Environment Minister Jacqueline Cramer was quoted as saying that "Until the problems are solved, there will be no subsidy for palm oil....It makes no sense to use palm oil for bio-energy purposes while the carbon dioxide produced is more than what we are actually trying to save, particularly when you cut down peatforests."

• Analysts uncertain about palm oil price outlook, 25 September 2007 from Biopact [6]. Differing opinions on the future price of palm oil and growth in production result from factors such as uncertainty over US subsidies and demand.

• Pumps to go all-bio-diesel, 11 June 2007 from the Bangkok Post. Thailand will mandate B2 (2% biodiesel blend) across the entire country from April 2008. That will be increased to B5 in the near future, as the country moves ahead with its plan to have 20% renewable fuels by 2012. Most of the biodiesel will be made from palm oil.

• A who's who of Indonesian biofuel, 22 May 2007, from Asia Times Online. Many of the companies that are now investing heavily in Indonesia's biodiesel industry are the sames ones that "incurred and defaulted on huge foreign debts in the wake of the 1997-98 Asian financial crisis. Few fully repaid their debts and today they still dominate the country's logging, wood-processing and pulp industries. Several also have highly suspect environmental records."

• Surging crude palm oil prices: Malaysian biodiesel plans in jeopardy, 25 April 2007 by AFP in the Daily Times (Pakistan), reports that "Surging crude palm oil prices have put a dent in Malaysian ventures to manufacture biodiesel, with licencees dragging their feet to set up factories."

• Thailand may import palm oil for biodiesel 18 March 2007, from Greencarcongress.com. Thailand may allow imports of palm oil for biodiesel production, as domestic production may not be sufficient. Thailand is considering a mandatory B5 blend for diesel.

• Comparing the Effect of Palm and Jatropha Biodiesel in a Diesel Engine November 3, 2006, from greencarcongress.com. "Researchers at Indonesia’s Institut Teknologi Bandung have compared the effects and performance of biodiesel fuels derived from two different feedstocks of importance to that country —- palm oil and jatropha —- in a direct-injection diesel engine."

• Burning of Indonesian forests is causing widespread pollution. But it's done to grow crops for environment-friendly -- and lucrative -- biofuels18 October, 2006 from MSNBC.

• MEPs, MPs urge caution in use of biofuels; call for ban on use of palm oil 18 October, 2006 from Low Carbon Vehicle Partnership.

• European MPs call for ban on use of palm oil for biofuels 23 October, 2006 from Biopact. Members of the EU Parliament called for a ban on biodiesel made from palm oil, because the crop is responsible for enormous environmental damage in South-East Asia and elsewhere.

• Nippon Oil, Toyota and Petronas to develop Palm-oil biodiesel 23 October, 2006 from Biopact.

Publications

See books, reports, scientific papers, position papers and websites for additional useful resources.

• Exploring arboreal ant community composition and co-occurrence patterns in plantations of oil palm Elaeis guineensis in Borneo and Peninsular Malaysia, by Martin Pfeiffer, Ho Cheng Tuck and Teh Chong Lay, Ecography, February 2008

• Oil Palm Research in Context: Identifying the Need for Biodiversity Assessment., by Turner EC, Snaddon JL, Fayle TM and Foster WA, PLOS ONE February 2008
• Towards better practice in smallholder palm oil production (pdf) by Sonja Vermeulen and Nathalie Goad, International Institute for Environment and Development (IIED), July 2006.
• The oil for ape scandal: How palm oil is threatening the orangutan - Sumatran Orangutan Society
• Green and Renewable Fuel from Palm Oil - Malaysian Palm Oil Board
• Gearing towards Malaysian Biodiesel Standards - Malaysian Palm Oil Board.

Regions/Countries

Look here for more detailed information on a specific country's or region's policies, organizations and industry.

• Producers: Africa; Southeast Asia: Indonesia, Malaysia
• Consumers: China, European Union, Japan, The Netherlands

Organizations

• Roundtable on Sustainable Palm Oil

Other oil palm products

Palm oil leavings

• China Clean Energy outlines plan to expand biodiesel capacity using palm oil leavings as a feedstock (go to story) - 18 December 2006 from Biofuel Review.
  • "what does China Clean Energy refer to when it talks about palm oil 'leavings'?" - 16 December 2006 blog entry from biopact.com.

References

1. Promised Land - Palm Oil and Land Acquisition in Indonesia: Implications for Local Communities and Indigenous Peoples by Marcus Colchester, Norman Jiwan, Andiko, Martua Sirait, Asep Yunan Firdaus, A. Surambo, Herbert Pane; Forest Peoples Programme, Perkumpulan Sawit Watch, HuMA and the World Agroforestry Centre, 2006. "An intensive, multi-disciplinary study of the legal and institutional processes of land acquisition for oil palm plantings in Indonesia with a focus on the rights of local communities and indigenous peoples."

	Bioenergy feedstocks	edit
Biodiesel feedstocks: Currently in use: Animal fat | Castor beans | Coconut oil | Jatropha | Jojoba | Karanj | Palm oil | Rapeseed | Soybeans | Sunflower seed | Waste Vegetable Oil (WVO) Currently in research and development: Algae | Halophytes (Salt-tolerant plants) Ethanol feedstocks: First-generation: Cassava | Corn | Milo | Nypa palm | Sorghum | Sugar beets | Sugar cane | Sweet potato | Waste citrus peels | Wheat | Whey Second-generation: For cellulosic technology - Grasses: Miscanthus, Prairie grasses, Switchgrass | Trees: Hybrid poplar, Mesquite, Willow Charcoal feedstocks: Bamboo | Wood Waste-to-energy (MSW)

	Bioenergy issues	edit
Agriculture (Land use) | Climate change | Economics | Environment | Social (Poverty) | Trade Controversies: Food versus fuel | Net energy | Carbon debt

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