New SEI research on palm oil informs biofuels debate in Bangkok and Brussels

SEI and local partners also conducted case studies in Thailand, and Cambodia that outline the extent of land-use change and impacts on natural resources and livelihoods associated with expansion of palm oil concessions. In recent weeks the research has fed into key events on biofuels in Southeast Asia and in Brussels at the EU Development Days.

The cultivation and processing of palm oil and other biofuel feedstock is a major industry in Southeast Asia, and the EU’s Renewable Energy Directive has greatly stimulated exports of palm oil in recent years. Indonesia, Cambodia and Thailand, and recently also Myanmar, are exploring ways to upscale production for domestic use and export.

The working paper – Competing Water Claims in Biofuel Feedstock Operations – highlights the local impacts of palm oil production in Central Kalimantan, Indonesia, particularly on water resources. The field research found that local people pay a steep price for the biofuels boom. Interviews with villagers in Central Kalimantan, a poor Indonesian province with large-scale palm oil production, show the plantations have harmed the local environment and people’s livelihoods. Reported impacts include deforestation; water pollution from run-off, pesticides, and dumping of palm-oil mill effluent and other waste; a decline in fish stocks and aquatic plants; and redirected water flows.

Key lessons from the research, both for producer countries and the EU, point to a need to improve regulation of local land rights and water use, and to tackle the sometimes perverse consequences of the EU’s emphasis on greenhouse gas emission policies, while making more effort to regulate for sustainable management of water and land.

Lead author of the report, Rasmus Kløcker Larsen, said: “In the proposed revision of the EU-RED, the EU has an opportunity to correct some of the errors in the sustainability criteria and their implementation. However, the current proposal does not include the necessary actions. European buyers of palm oil have a lot of power, and whether they will more proactively move ahead to embed standards, such as the RSPO, in their CSR policies – and actually reward for more responsible production.”

Regional biofuels seminar in Bangkok
On 15–16 November, SEI convened a seminar in Bangkok, titled Palm oil and bioenergy strategies in South East Asia. The seminar brought together for the first time stakeholders from the public, private and civil society sectors to discuss the challenges and opportunities of biofuels expansion in Southeast Asia, and to debate action for effective monitoring of the industry.

Representatives from Cambodia, Myanmar, Thailand and Indonesia reported that the rapid expansion in producing feedstock for biofuels is taking place on an ad hoc basis, and that local and national level data do not agree on the scale of expansion. They also shared a concern over the weak capacity of local authorities to monitor and ensure sustainable production. As a result, expansion in many cases has led to unprecedented land use change, negative impacts, and frustration among local stakeholders.

A representative from a village in Central Kalimantan said, ‘The oil palm tree is not the problem. It is the system where it is implemented that is the problem. In my village palm oil has destroyed the environment and disrupted the unity of people.’

The seminar concluded that there are five key action areas for sustainable production: more opportunities to share lessons between and within countries; greater efforts to balance the priorities of food and fuel; more effective cost benefit analyses; proper “zoning” at the local level to identify suitable land; strengthening of environmental human rights legislation; and more effective local governance.