Opposition to palm oil biodiesel plans in Australia

Palm oil furore could stymie green fuel plan

Wilkinson, Environment Editor - October 11, 2007

THE rush to replace carbon-emitting petroleum with "clean green"
biofuels is threatening to stall in the face of rising food prices,
Federal Government disincentives and growing opposition from
environmental groups sounding the alarm about large-scale
deforestation to support fuel crops.

Now a planned $30 million biodiesel plant in Port Botany is under
attack by the Greens because it will use palm oil from Indonesia and
Malaysia. Its future is up in the air as the developer, Natural
Fuels Australia, decides whether it should go ahead. The chairman of
the company, Barry Murphy, said yesterday that the Federal
Government clean fuels grant did not in reality encourage the use of
pure biodiesel from crops and therefore "makes the economics
difficult". He also acknowledged the price of feedstock and the
global issues around climate change and deforestation made the
decision a tough one.

The Greens state MP Ian Cohen is demanding that NSW reject the
planning request by Natural Fuels for the biodiesel plant, saying
the minister, Frank Sartor, has failed to consider its effect on
rainforest destruction because of the plant's proposed use of palm
oil. Mr Cohen has written to Mr Sartor saying the plant, rather than
helping climate change, "may worsen the global crisis whilst
hastening the destruction of tropical forests".

A spokesman for the Planning Department said the importation of palm
oil was a Federal Government matter.

This week Natural Fuels found itself at the centre of a political
storm over its planned importation of palm oil for use in its plant
in Darwin, which will come on line in December.

The Federal Environment Minister, Malcolm Turnbull, announced
Australia would push for international action on the sustainable
sourcing of palm oil at the United Nations climate talks in Bali in
December.

The Federal Government provides a 38 cents a litre subsidy for
biofuels, including those made from palm oil, as part of its push to
encourage clean green fuel. But at the same time Mr Turnbull has
pledged $200 million to stop deforestation in South-East Asia,
caused partly by a huge expansion in palm oil plantations.

Earlier this year the UN reported that the drive for new palm oil
plantations was one of the greatest threats to the rainforests and
the endangered orang-utans in the region. "In Indonesia and Malaysia
it is now the primary cause of permanent rainforest loss," the
report found. Plantations in Indonesia have expanded from 600,000
hectares in 1985 to an estimated 6.4 million hectares this year, the
Palm Oil Action Group says.

The devastation of rainforest and peatlands has caused some big
European biofuel companies to shun palm oil as a source. But
companies like Natural Fuels are anxious to create a "sustainable"
source of palm oil and have joined forces with large companies such
as Cadbury Schweppes and Unilever, and the environment group WWF, to form the Roundtable on Sustainable Palm Oil.

At a meeting next month in Kuala Lumpur, the group will call on
growers, wholesalers and retailers to accept a code of practice
curbing destructive activities, including the clearing and burning
of rainforest. Mr Murphy has been heavily involved in the reforms
and said the company realised "these are real issues and need to be
addressed".

But several environmental groups, including Greenpeace, say the
roundtable group is dependent on self-regulation and will be
incapable of enforcing sustainable production.

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