The real cost of palm oil

Andy Ho, Straits Times 28 Feb 08;

WHEN GOING GREEN GOES WRONG
A 2007 University of Leicester study found that for every hectare of oil palm, 170 tonnes of carbon are released into the air over the plantation's useful life of 25 years. By contrast, each hectare of peat-swamp absorbs 2.6 tonnes of carbon annually, so it stores 65 tonnes over 25 years. Producing palm oil on peatland, in other words, results in a net emission of carbon.

WE HAVE had bad air for the past few days. Prevailing winds have brought in the haze from Riau's forest fires. The culprits responsible for this are big plantation companies that burn forests to clear land to plant oil palm.

Widely used in food and cosmetics, palm oil accounts for 21 per cent of the global edible oils market. It is also used to make a renewable fuel called biodiesel, the main user of which is the European Union (EU).

In 2003, the EU announced it was mandating biofuels in 5.75 per cent of transportation by 2010, and 10 per cent by 2020. This initiative stoked investment in oil palm plantations and biodiesel refineries in Indonesia.

Since biodiesel is made from a plant, carbon is absorbed while the palm is growing, which is released when the green fuel is burned. Thus, compared to fossil fuels, biodiesel would be neutral in terms of greenhouse gas emissions, it was argued.

We know now that things are not so simple. The process of producing palm oil itself takes a heavy toll on the environment. Still, the biofuel industry favours the palm as 1ha of it yields 20 tonnes of the crude. By contrast, biofuels like soybean and corn yield just 7.5 and 3 per cent of that, respectively.

By early last year, there were 6.1 million ha of oil palm in Indonesia, up from 600,000ha in 1985. Palm oil production rose from 157,000 tonnes in 1964 to 15.9 million tonnes in 2006, with exports jumping from 126,000 tonnes to 11.6 million tonnes in the same period. Last year, these exports were worth US$4.43 billion (S$6.3 billion).

As it is an important source of foreign exchange and employment, the Indonesian government wants to expand oil palm to the eastern part of the country. While Riau has the biggest area under palm cultivation now, plantation companies are being given forest concessions in Kalimantan, Irian Jaya and Sulawesi for further expansion.

It would be environmentally friendlier to rehabilitate disused rice paddies or old oil palm plantations, but that would cost more than clearing rainforests. Moreover, with forest concessions, companies can also sell the valuable tropical timber that they harvest.

The logging, however, is often uncontrolled, leading to the erosion of top soil that is then washed by rain into rivers, thus aggravating floods. Also, after the logging is done, firms tend to burn the logged-over areas to clear them, though this is illegal. Trees soak up carbon as they grow; when they are burned, they release it back into the atmosphere.

In addition, these forest fires often spread beyond their planned areas. At least 19 of Indonesia's protected national parks have been affected thus, including a Unesco-registered wetland in Sumatra.

Forest fires consumed 50,000 sq km of Indonesia's rainforests in 1994. Another 46,000 sq km went up in smoke in 1997-98. Of the 176 firms which used fires illegally to clear forests in 1997-98, 133 were oil palm companies. A 2007 United Nations Environment Programme report confirmed that planting oil palm was the main cause of deforestation in Indonesia.

Apart from rainforests, these companies also resort to clearing peat-swamp forests, which they first drain. Timber found in these forests is logged and the logged-over land is also cleared by burning. These boggy swamps absorb rain and run-off, thus helping to mitigate flooding and erosion. When they are drained and burned, however, the risk of flooding rises.

Moreover, these bogs have partially decomposed plant matter that has been sitting underground for centuries, effectively storing carbon. The 4 million ha of peatlands in Riau alone store 14.6 billion tonnes of carbon, experts estimate. When drained, the peat is exposed to oxygen and decomposes, thus releasing carbon. Of the 22.5 million ha of peatland in Indonesia, 10 million have been drained, studies estimate. When the peat-swamp forests are burned, the fires smoulder underground for years even if the surface fires are extinguished.

A 2007 University of Leicester study found that for every hectare of oil palm, 170 tonnes of carbon are released into the air over the plantation's useful life of 25 years. By contrast, each hectare of peat-swamp absorbs 2.6 tonnes of carbon annually, so it stores 65 tonnes over 25 years.

Producing palm oil on peatland, in other words, results in a net emission of carbon. This conclusion was supported by a study published in the journal Science this month. Peatland abuse has made Indonesia the third-largest carbon emitter in the world after the United States and China.

But it is rainforests, the world's richest ecosystems, that have captured the imagination of many. Not only do they house 70 per cent of all known flora and fauna species, they may also hold 200 species of trees per hectare compared to just a few in temperate forests.

Besides trees, rainforests contain innumerable species of vines, shrubs, mosses, and other plants. The unprecedented scale of deforestation in Indonesia - two-thirds of the forests in Sumatra and half in Borneo have been cleared - threatens many species.

Among the rainforest's more charismatic residents are mammals - like the Sumatran tiger, the Sumatran rhinoceros, the Sumatran orangutan, langurs, and so on. According to the World Conservation Union, 32 per cent of over 400 mammal species in Indonesia are threatened.

These animals can survive only in rainforests, not monoculture oil palm plantations where the varieties of leaves, fruits, roots and shoots they need to eat do not exist. The Conservation Union's authoritative Red List Of Threatened Species reports that 15 Indonesian species are critically endangered. A World Bank study has warned that Indonesia is 'almost certainly undergoing a species extinction spasm of planetary proportions'.

As if all this weren't enough, even processing the oil palm fruit can harm the environment. Because it must be processed within 24 hours of being harvesting, hundreds of small mills have been put up throughout rural Indonesia. Many of these discharge their effluent - oil residue and crushed shells - untreated into waterways. In Sumatra, in 2002, the Siak River was thus polluted, killing off thousands of fish. In 2003, the Kuning River in Sumatra suffered the same fate.

Admitting that such environmental consequences had not been anticipated when it mandated biofuels, the EU issued a new directive in January. This requires biofuels to show an overall cut of 35 per cent in carbon emissions compared to fossil fuels. However, the directive exempts biodiesel sourced from plantations established before 2003.

Indonesia exports 40 per cent of its crude palm oil to India and China, so no let-up in the expansion of the crop's cultivation is expected. Palm oil prices have been climbing uninterruptedly since mid2007, setting a new record of US$1,217 per tonne this week.

Don't hold your breath, haze or no haze.