Indonesia: EPA concludes fact finding on Indonesia’s palm oil

Linda Yulisman The Jakarta Post 24 Oct 12;

A visiting delegation from the United States’ Environmental Protection Agency (EPA) has completed fact finding on the operation of oil palm plantations in Indonesia, a step that may lead to a review of the eligibility of palm oil to join renewable fuel programs in the world’s largest energy market.

EPA representative Regina McCarthy said on Tuesday in Jakarta that despite the end of the mission, her agency did not have any immediate plan to recalculate greenhouse emissions generated from palm oil based biofuel.

“We will continue to talk and understand what the technical issues are and once we’re comfortable, we will make a decision, but not before,” she told reporters at a workshop on sustainable palm oil production.

McCarthy underlined that the EPA’s analysis would not restrict the entry of palm oil to the US.

Previously the EPA has stated that palm oil cannot be included in the US renewable fuel program (RFS) based on its assessment of greenhouse gas (GHG) emissions from biofuel production, distribution and tailpipe emissions.

Palm oil-based biodiesel cut green house emissions by only 17 percent compared to gasoline and the diesel fuels it is set to replace, slightly lower than the 20 percent threshold required to qualify.

Deforestation is the key issue faced by the oil palm industry, especially in Indonesia where lowland rainforests contain high levels of biodiversity, and peat lands are home to globally significant carbon reserves.

Deputy Agriculture Minister Rusman Heriawan said that what should concern local stakeholders are opportunities in the US market if the renewable energy project was fully executed.

“Our palm oil exports to the US are still relatively small, but the market will become much bigger as the country aims to replace fossil fuel with other fuels. If it’s confident our palm oil is eco-friendly, this will be good for our palm oil prospects in the future,” he said on the sidelines of the workshop.

The RFS is scheduled to reduce US dependence on fossil fuel by more than 328 million barrels per year, and cut GHG by more than 138 million metric tons a year when fully phased in by 2022.

The EPA’s evaluation should be an impetus for palm oil producers to improve their compliance with sustainability standards, Rusman added.

The government has introduced the Indonesian Sustainable Palm Oil (ISPO) scheme to address concerns over rapid deforestation and the massive destruction of carbon-rich peat land, particularly caused by the incremental expansion of oil palm plantations.

The Agriculture Ministry wants to issue sustainability certificates for up to 20 oil palm plantations before the end of this year.