Published October 20, 2009

Palm oil: M'sia rejects criticisms

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KUALA LUMPUR, Oct 19 (Reuters) Malaysia wants to standardise the way palm oil's impact on the environment is calculated, senior officials said on Monday, as it seeks to counter criticism that the industry fuels climate change.

Next year the European Union, a top biofuels consumer, will impose a target to only accept biodiesel that can reduce CO2 emissions by at least 35 per cent versus fossil fuel, which risks cutting out palm oil which the EU considers to save only 19 per cent.

'We are willing to let the EU scrutinise our system,' Malaysian Palm Oil Board Chairman Sabri Ahmad told Reuters at the sidelines of a regional conference. 'We should be the ones coming up with the standard, since we know palm oil best and we have nothing to lose.'

Officials say there is no clear timetable when Malaysia will present its own system to compute palm oil's greenhouse gas savings, although a major government-sponsored study due to be presented next month will form the basis.

Environmentalists say the rapidly growing palm oil sector is not only responsible for the loss of vast areas of tropical forests that soak up carbon dioxide, the main greenhouse gas, but emits warming gases during processing.

The board chairman said a major saving could come through capturing methane, a powerful greenhouse gas, produced during the processing of palm oil fruit bunches. Flammable methane can be burned to produce electricity on-site.

A tonne of crude palm oil can produce anything from 400 to 900 kilograms of methane, analysts say.

Based on current studies, palm oil's greenhouse gas savings range from 19 per cent to 72 per cent over fossil fuels, making it difficult to decide on a standard value for the tropical oil, said Malaysian Palm Oil Council Chief Executive Yusof Basiron.

That becomes a problem for governments wanting to draft biofuel legislation. 'The low and erroneous values would be used to the advantage of detractors, who accuse the industry of not being sustainable, as is happening at the moment,' he told the conference. So far, studies conducted by the Malaysian Palm Oil Board show that palm oil with methane capture at mills can achieve 62 per cent greenhouse gas savings. -- Reuters