FAQ on palm oil and biofuels

Page - February 23, 2011
Frequently asked questions on palm oil in biofuels and Neste Oil palm oil diesel NExBTL.

What is NExBTL diesel?

NExBTL is a first generation biodiesel, produced by Finnish state-owned oil refiner Neste Oil in four refineries in Finland, Singapore (2010) and Rotterdam (2011). Neste Oil is using minor amounts of animal fats and rape seed in NExBTL production, however the main raw material is palm oil – making the product a major environmental failure. Annual production capacity of NExBTL refineries is 2 million tonnes, for which 2,5 million tonnes of raw materials are needed. Most of this is palm oil, making Neste Oil most likely the number one palm oil processor in the world in 2012.

Neste Oil claims it is using certified palm oil?

Neste Oil, like many other big palm oil users, has a goal to have its palm oil certified in the future by RSPO or other systems – none of the major palm oil users are there yet. However, certification does not prevent rainforest destruction or other related problems: the environmental and social criteria of certification are weak and the producers have regularly broken even these vague rules. Major problem with certification is that it does not address the ILUC (Indirect Land Use Change) effect: any additional palm oil consumption leads inevitably to further rainforest destruction in palm oil producing regions. The certification risks creating the illusion of sustainable palm oil, justifying the expansion of the palm oil industry.

Neste Oil tells its palm oil purchases are traceable?
Despite of repeated requests to do so, Neste Oil has not published information on its palm oil suppliers or location of the production areas. If Neste Oil could really trace the origin of its palm oil, and if the palm oil would only come from acceptable sustainable sources as Neste Oil claims, there should not be reasons to keep the origin and suppliers secret. Currently Neste Oil obviously has got something to hide. Instead of telling where its palm oil comes from, Neste Oil just tells the public that the company itself knows it. This is not what one could call transparent business.

Even if Neste Oil would live up to its promises of transparency, it should be noted that in the end it does not very much help to know where the palm oil comes from as long as the key problem remains: increasing use of palm oil creates additional demand for new palm oil production, which causes further deforestation. Neste Oil
is creating huge additional demand for global palm oil production with it´s 2,5 million tonnes annual usage of raw materials. As most of the new palm oil plantations are established on forests and peatlands, Neste Oil is responsible on increasing deforestation either directly or indirectly.

Neste Oil says it does not accept rainforest destruction or social conflicts?
This claim by Neste Oil is PR only, greenwashing and hypocrisy. In reality Neste Oil is buying massive amounts of palm oil, generating huge additional demand for palm oil. New demand leads into new production. According to UN and recent research, most of the new palm plantations in Southeast Asia are established on
rainforests and peatlands.

It has been shown repeatedly that Neste Oil´s own palm oil supplier IOI Group is logging rainforests, draining peatlands, burning forests and destroying habitats of endangered species. IOI Group has also generated social conflicts, and in one of the cases the company has been convicted in a court on the damage it has caused for local people. While Neste Oil states it doesn’t accept this kind of business, it still continues buying palm oil from the company.

According to Neste Oil, NExBTL reduces CO2- emissions?

This has been proved wrong in tens of different studies. According to number of studies in recent years by universities and research institutes, biodiesel produced from palm oil has a negative overall environmental impact and negative greenhouse gas balance. Exact estimations on the negative climate effects vary depending
on the soil where the raw material is produced, but the general conclusion of different studies is that first generation biofuels, to which palm oil diesel belongs to, do not help in reducing the emissions – on the contrary, they increase the CO2- emissions either directly or indirectly. According to a study Neste Oil has commissioned it is possible to reduce emissions with palm oil diesel; however this study do not take into account ILUC (Indirect Land Use Effect) and is flawed also in other ways. Tens of other independent scientific studies and
research projects say the opposite.

Neste Oil or other sources sometimes refer to NExBTL as second generation biofuel?
As long as the main raw material of Neste Oil´s product are edible oils such as palm oil, NExBTL is considered as first generation biofuel. The definition of second generation biofuels is that they are those biofuels produced from non-food-crops: waste, cellulose, hemicellulose or lignin.

In the EU-legislation and regulation (RES-directive) on biofuels, these biofuels are given a double weight in accounting emissions reductions: “For the purposes of demonstrating compliance with national renewable energy obligations placed on operators, the contribution made by biofuels produced from wastes, residues, non-food cellulosic material, and ligno-cellulosic material shall be considered to be twice that made by other biofuels.” Palm oil diesel by Neste Oil does not fit into this category.

What does Greenpeace want from Neste Oil?

Our message to consumers, industry and politicians is simple. Palm oil diesel: don’t buy it, don’t produce it, don’t subsidize it. First generation biofuels such as palm oil diesel are false solution for climate change. Governments and producers should put their effort in development and production of second generation biofuels, which effectively reduce the emissions and do not cause additional environmental problems.

For Indonesian government we have a clear ask: we want to see the Indonesian government establish a moratorium on clearing forest and peatland areas. We also want to see deforested and degraded peatlands being restored, preventing yet more emissions from these areas. International funds also need to be made available so tropical forest countries can reduce their greenhouse gas emissions from deforestation.

Why is palm oil a problem?

The global palm oil industry is expanding rapidly: it's used in an increasing number of food and cosmetic products, while demands for its use in biofuels like biodiesel are set to soar in the near future. Tropical rainforests and peatlands in Southeast Asia are being destroyed to make way for oil palm plantations. Not only is this a disaster for biodiversity and local communities, it will also release vast amounts of greenhouse gases into the atmosphere, accelerating climate change.

Are you anti-palm oil?
Greenpeace is not against palm oil or palm oil industry as such. We recognize that palm oil is important for the local economics like Indonesia, however we can not accept destruction of rainforests that is currently taking place by large-scale palm oil industry.

Why won't the RSPO work?
As it currently stands, even though member companies are paying lip-service to forest and peatland protection, the reality is very different. The existing standards developed by the RSPO will not prevent forest and peatland destruction, and a number of RSPO members are taking no steps to avoid the worst practices of the palm oil industry. Some like palm oil processor Duta Palma, an RSPO member, are directly involved in deforestation. Worse still, at present the RSPO itself is creating the illusion of sustainable palm oil, justifying the expansion of the industry.

Aren't biofuels meant to reduce emissions?

They could make a small contribution to reducing emissions, but their role has been greatly over-exaggerated. Using biofuels containing palm oil to tackle climate change is like using a can of petrol to put out a fire and would produce more carbon emissions than burning conventional fossil fuels.

So why are governments increasing the amount of biofuels being sold?

It's seen as an easy quick fix to cut emissions from transport, but as a result of deforestation and land conversion overall emissions could actually increase. In addition, the growth of crops for biofuels looks set to increase food prices and reduce global food reserves. This hasn't stopped several governments setting biofuel targets: by 2012, 20 per cent of diesel in India will be biodiesel, while by 2020 the EU and China want their biofuel levels to rise to 10 and 15 per cent respectively. We're lobbying governments to devise strict sustainability criteria to ensure they don't include products directly or indirectly responsible for deforestation.