Palm oil production and prices soar on back of biodiesel

The price of palm oil, which has gained favour over the last few years as a cheap biodiesel feedstock, is soaring. Another relatively new use of palm oil is as a trans-fat substitute for use in processed food. But the oil palm, grown mainly in Malaysia and Indonesia, is not well liked - it has been blamed for rainforest destruction, the death of orang-utans, air pollution and exploitation of workers.

Europe in particular is fueling the growth in biodiesel production which in turn is encouraging the growth of more oil palm plantations. Meanwhile, Malaysian exports of palm oil to the U.S. increased by 65 percent last year as consumers turned away from trans-fats.

A controversial Chinese-funded plan to strip 1.8 million hectares / 4.5 million-acres of forest for a massive new oil palm plantation in Indonesia is causing alarm. But while land clearing in Indonesia is rampant, the locals are unapologetic claiming that Europe cleared its own forests for commercial gain.

Environmentalists meanwhile are concerned about the impact such practises are having. In their article, Physorg quotes Meena Raman from Friends of the Earth Malaysia as saying "It's a huge push to have a monoculture crop replace biodiverse rainforest and indigenous people. Palm oil is just a quick fix for biofuel."

Analysis: While a legitimate and sustainable palm oil industry exists in Malaysia and Indonesia, massive destruction of forests to export biodiesel to Europe is really just Europe exporting its environmental problems to South East Asia. The Philippines is so concerned about similar problems occurring in their country that they have embraced jatropha curcas as a plant which can be used as a biodiesel feedstock and grown in non-forest areas.


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