The palm oil problem

[Lee]

Manila Times             20 Apr 2023

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PALM oil is one of the biggest agricultural commodities in Southeast Asia, and up until a couple of years ago, was viewed — despite there being no rational justification for doing so — as a key ingredient in various emissions-reduction ideas, such as using it as an additive in diesel fuel. However, with much of the rest of the world slowly coming to the realization that palm oil is actually environmentally horrifying, a potential economic headache is brewing for two of the Association of Southeast Asian Nations' (Asean) biggest economies and the largest producers of the stuff — Indonesia and Malaysia.

Those two countries are responsible for about 88 percent of palm oil exports, or about 45 million metric tons of the slightly less than 51 million MT produced for export globally in 2022. Indonesia is the biggest producer, exporting 28.5 million MT of its roughly 46 million MT annual production, while Malaysia produces about 18.5 million MT and exports about 16.5 million MT. The biggest importers of palm oil globally are India; China; the EU, of which the Netherlands is the biggest individual importer; Pakistan; and the US.

The Philippines makes the top 10 with annual imports of about 1.15 million MT, about 55 percent of that from Indonesia and the rest from Malaysia. Despite being capable of producing palm oil — there are about 90,000 hectares of palm oil plantations in Mindanao — the Philippines' domestic production falls well short of demand, and even at the current import levels, according to data from an industry group reported back in February, the country still has a deficit of about 186,000 MT of vegetable oil, whether that would be palm oil or an alternative.

So, in short, palm oil is a big business, no matter which end of the trade path one happens to be on, but it is a business that is increasingly being recognized as "the elephant in the greenhouse," as one environmental activist put it. Two recent developments are threatening to put a huge dent in Indonesia's and Malaysia's palm oil business, as well as scrub any pretensions of building up the Philippines' domestic production. The biggest blow is a new EU anti-deforestation law, which requires imported palm oil to be verifiably certified as having been produced on land that has not been deforested.

That eliminates almost all of Malaysia's export supply and the majority of Indonesia's, because existing certification schemes, such as the Roundtable for Sustainable Palm Oil (RSPO), are rendered invalid. Under the EU law, producers must certify down to the level of individual farm plots that they are not planting on land that contains any peat, or has been cleared of any forest; the existing RSPO standards permit land cleared of secondary forest, or containing a peat layer less than a meter thick.

So far, only the EU has formalized such strict measures, but even in other big export markets there is pressure to curb the palm oil trade. In Japan, an aggressive effort to construct palm oil-fired electricity generating plants in the wake of the 2011 earthquake and subsequent shutdown of all 54 of Japan's nuclear plants has collapsed, largely due to public pressure. Japan had planned up to 1,700 megawatts (MW) of palm oil generating capacity, which would have increased its palm oil imports fivefold from about 720,000 MT annually to 3.4 million MT, but the backlash from communities, as well as increasing palm oil prices, have put an end to that idea. Only eight small plants with a combined capacity of just 140 MW were ever built, and these are not even running at full capacity, being used only as supplemental or emergency power sources; no further projects are in development or even planned at this point.

There are very good reasons for the resistance to the use of palm oil. While it is technically not a fossil fuel, it is still a source of carbon — using it as a direct fuel, or as a "green" additive in diesel is simply analogous to eating the flour instead of waiting for the cookies to be baked. According to a 2020 study published in the journal Nature Communications, biodiesel (generally containing about 10 percent palm oil) is actually worse than just plain diesel in terms of emissions, producing about 168 grams of CO2-equivalent (CO2e) per megajoule (MJ) of energy released, versus about 95 for diesel refined according to emissions standards after 2017. Obviously, this can be controlled somewhat through using even more refined diesel (Euro 5 or 6 standard) and carefully tuning the engine that's burning it, but the bottom line there is no emissions benefit to palm oil-based biodiesel, as has been assumed.

All of that is a very small problem in the big scheme of things, however, because the emissions from the cultivation and processing of palm oil are massive. According to several studies conducted since 2010, the average emissions from palm oil plantations are about 5.69 MT CO2e per MT of palm oil produced, with another 0.04 MT CO2e/MT coming from the milling process. The average yield per hectare is about 4.0 MT of oil, thus the estimated 19.8 million hectares in Indonesia and Malaysia alone produce 453.8 million MT CO2e of emissions — about 0.8 percent of the annual global total, and about half of the amount produced by the world's entire commercial aviation industry.

It is revelations like these that make one feel discouraged about the prospects of preventing our planet from becoming uninhabitable within the lifetime of our grandchildren, or great-grandchildren. Palm oil is one of the world's biggest agricultural trade commodities, and a staple ingredient in the diets of a considerable majority of the people on the planet. It is a big component of the GDP of Indonesia and Malaysia, and by extension, the Asean region, and it is the source of livelihood for millions of people, many of them smallholder farmers. Simply stopping its production and use is out of the question, because that would result in a social and economic disaster of unimaginable proportions, and yet to continue is to wreak further havoc on the environment, putting us all at risk from the inevitable climate effects. What solution there might be to this impossible dilemma is beyond anyone's imagination, at least for now, and it is frightening to think that there might not actually be a solution at all.

 

 

 

 

 

 

 

 

 

 

 

Edited April 19, 2023 by Lee
clarification

[BrettGC]

Interesting read.  As with all environmental issues there's a massive downside.  Moving from fossil fuels or palm is proving to be difficult both economically and ethically with regards to how some the the alternatives are harvested/mined.  The term "Blood Diamond" comes to mind:  Diamonds that are sourced from areas where the labour used is in all but name, slavery.  In the alternative energy sphere it's an issue with regards to rare earth minerals that can be used in batteries, solar panels etc.  Thankfully the alternative is lithium, but mining it is not necessarily an environmentally friendly undertaking either.  

Tough problems that we have to face.  

I sort of went off on a tangent but I think my point is taken.

Edited April 20, 2023 by BrettGC

[P_X]

In a nation/region riddled with coconut..it blows my mind why they don't mass produce the oil from them. Or at least have it as a common option.  

Palm oil sucks. Bad for you..and as noted above..taxing on the forests.

Coconut oil is healthier. 

But of course, would probably also tax the environment if mass produced. 

It's a delicate issue. 

Like the rare earth minerals required to make batteries and solar panels. 

Not sustainable.  

Complex problems with complex solutions that seem to be out of our grasp as of yet

[Onemore52]

So it would be no surprise to anyone that all the fast food  outlets uses Palm Oil in their deep fryers, probably in their ovens as well.

[BrettGC]

2 minutes ago, Onemore52 said:

So it would be no surprise to anyone that all the fast food  outlets uses Palm Oil in their deep fryers, probably in their ovens as well.

Surprisingly they use canola oil in their deep fryers.  

[Onemore52]

Possibly but not at the place I got chicken from yesterday it had a very foul taste.

[Lee]

26 minutes ago, Onemore52 said:

Possibly but not at the place I got chicken from yesterday it had a very foul taste.

Chicken should have a fowl taste.....................

[Onemore52]

But this was foul, sickening.

As I have mentioned previously I worked in Malaysia for 15 years where the catering company attempted to bring palm oil onto the rig, their attempts were unsuccessful. Those were the days when Indonesia was burning down forests to plant palms, the sky would be black with the smoke that the wind would carry down to the South China Sea where the rig was drilling.

[Mike J]

12 hours ago, Onemore52 said:

Possibly but not at the place I got chicken from yesterday it had a very foul taste.

Any type of deep fry oil needs to changed on a schedule or it will give food a bitter, burnt, nasty taste.

[Mike J]

11 hours ago, Mike J said:

Any type of deep fry oil needs to changed on a schedule or it will give food a bitter, burnt, nasty taste.

And don't tell my wife I said that!