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Indonesia formally challenges US palm oil policy

Publication Date : 05-05-2012


Indonesia has formally challenged the recent greenhouse gas analysis of palm oil issued by the US Environmental Protection Agency (EPA), saying that palm oil-based biofuel is qualified to join the renewable fuel programme in the world’s energy market.

According to the Indonesian Palm Oil Producers’ Association (Gapki), greenhouse gas emissions can be reduced by palm oil-based biofuel by up to 50 per cent, higher than the 20 per cent required by the EPA. Gapki’s calculation is quite similar to the previous estimate put forward by the Indonesian Sustainable Palm Oil Commission which, based on joint research with an international research agency, maintained that Indonesian palm oil-based biofuel could cut between 40 per cent and 60 per cent of greenhouse gasses based on the method in accordance with European Union (EU) rules.

In its recent regulatory filing, the EPA said that palm oil-based biofuel could cut greenhouse emissions by only 17 per cent, falling short of the 20 per cent threshold, to be included in US renewable-fuel standards.

In its formal response submitted on April 26, Gapki also mentioned that palm oil production was more efficient in terms of land use than any other vegetable oil, because as a perennial it could produce fruit for up to 25 years, and could not, therefore, be compared to other vegetable oils, such as soybean oil, used in the EPA’s calculations.

The EPA earlier said that its carbon accounting for palm-oil biofuel was based partly on the “incremental expansion” of oil palm plantations in Indonesia and Malaysia, which account for up to 90 per cent of the world’s palm-oil supply, producing a projected 1.5 million kilolitres of biofuel for the US by 2022.

The two countries would produce nearly 2 million tonnes of carbon dioxide per year over 30 years as a result of clearing peat swamps and forests to expand plantations in order to meet US biofuel demand, the EPA stated.

The Indonesian Trade Ministry’s director general for foreign trade, Deddy Saleh, said that in response, the government pointed to the use of assumptions rather than hard data in the EPA’s calculations, which were not representative of real conditions.

Compared to other crops, he continued, oil palms were more efficient in generating vegetable oil as they needed only 0.26 hectares of land to produce one ton of palm oil, according to a 2010 study conducted by the Food Policy Research Institute.

"Scientifically speaking, CPO is much more efficient than other vegetable oils, such as soybean, sunflower and rapeseeds oil,” he said.

The government also said that the EPA’s analysis ignored Indonesia’s commitment to protect the environment and its efforts to reduce greenhouse emissions by 26 per cent through its own efforts and by 41 per cent with international assistance by 2020.

Sustainable palm-oil production has become a key concern over recent years in Indonesia, the world’s largest palm-oil producer, primarily due to massive expansions in oil palm plantations that have resulted in extensive deforestation.

In 2010, several major palm-oil buyers suspended their purchase of Indonesian palm oil because of the deforestation issue.


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