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Oil giants destroy rainforests to make palm oil diesel for motorists

From The Times
August 15, 2009

Ben Webster, Environment Editor

Fuel companies are accelerating the destruction of rainforest by secretly adding palm oil to diesel that is sold to millions of British motorists.

Twelve oil companies supplied a total of 123 million litres of palm oil to filling stations in the year to April, according to official figures obtained by The Times.

Only 15 per cent of the palm oil came from plantations that met any kind of environmental standard. Much of the rest came from land previously occupied by rainforest.

Vast tracts of rainforest are destroyed each year by companies seeking to take advantage of the world’s growing appetite for plant-based alternatives to fossil fuel.

In theory, greenhouse gas emissions from burning biofuel are lower than those from fossil fuel because crops absorb carbon dioxide as they grow.

But clearing rainforest to create biofuel plantations releases vast quantities of carbon stored in trees and soil. It takes up to 840 years for a palm oil plantation to soak up the carbon emitted when rainforest is burnt to plant the crop.

Deforestation, mainly in the tropics, accounts for almost 20 per cent of global greenhouse gas emissions.

The expansion of the palm oil industry in Indonesia has turned the country into the third-largest CO2 emitter, after China and the US. Indonesia has the fastest rate of deforestation, losing an area the size of Wales every year. The expansion of plantations has pushed the orang-utan to the brink of extinction in Sumatra.

Last year British motorists used 27 million litres of palm oil from Indonesia and 64 million litres from Malaysia, according to the Renewable Fuels Agency, the government-funded watchdog that monitors biofuel supplies. Fuel companies also supplied 32 million litres of palm oil from “unknown” countries.

Under a European Union initiative aimed at reducing greenhouse gas emissions, 3.25 per cent of the total amount of fuel sold by each oil company must be biofuel. The proportion is due to rise to 13 per cent by 2020.

In practice most companies meet the obligation by adding biofuel to diesel, creating a blend that contains about 5 per cent biofuel. The companies are not obliged to inform motorists that the petrol or diesel they buy contains biofuel.

Biofuel can be derived from dozens of crops but many fuel companies choose palm oil because it can be cheaper than the more sustainable alternatives such as rapeseed.

The agency knows which companies are using palm oil but is refusing to name them on the ground that the information is commercially sensitive.

Several leading fuel industry figures sit on the agency’s board, including a director of the oil company BP and a senior executive from the coalmining group Anglo American. The agency said that the directors had not been involved in the decision to withhold the names of the companies.

Ian Duff, a forest campaigner for Greenpeace, said: “It cannot be right that the watchdog on biofuels has oil company directors on its board. The agency is preventing the public from discovering which of these companies are selling us palm oil, one of the cheapest and most environmentally damaging biofuels.”

Several major oil companies are exploiting a loophole in the agency’s reporting system to avoid declaring what type of land has been used to grow their biofuel. They are obliged to submit a sustainability report but in the section on the previous use of the land are allowed to say “unknown”.

When calculating the greenhouse gas savings from biofuel the agency ignores the previous use of the land.

Esso said that it did not know the previous use of the land on which 95 per cent of its biofuel was grown. It also refused to say whether it had used any palm oil.

A spokesman said: “Our approach to supplying biofuels must balance sustainability, fuel-product quality and the need to remain competitive in the marketplace.”

BP said that its biofuel included palm oil but claimed that it all came from certified plantations. It failed to declare the previous use of the land for 79 per cent of its biofuel.

Total refused to say whether it used any palm oil. Murco admitted using palm oil but did not respond to questions about its origins. Total, Chevron and Murco all failed to declare the previous use of the land that was the source of more than half their biofuel.

Chevron admitted using palm oil from uncertified sources. A spokesman said: “As sustainable palm oil certification systems become commercially operational, Chevron will progress towards sourcing, supplying and trading only certified palm oil.”

Shell had the best record of the major companies for declaring the sources of its biofuel. It said that it did not use any palm oil last year because it could not find any from a sustainable source. Luis Scoffone, vice-president for biofuels, said that Shell could have met its biofuel obligation more cheaply if it had bought palm oil.

“There is a premium for sustainability that we are incurring,” he said. Shell was likely to use palm oil in the future but only when it could be certain that it was not damaging rainforests.

“It is almost inevitable that we will use palm oil because the amount of biofuel we will need is increasing. Palms deliver one of the highest volumes of oil per hectare of any crop. That means we can use less land to produce the same amount of oil.”

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