Palm
Oil
The
Center for Environment, Commerce and Energy (CfECE)
supports the use of palm oil.
We
support palm oil as a food additive and as a fuel that
can mitigate greenhouse gas emissions.
CfECE
will pursue entrepreneurial activities involving palm oil
production and distribution.
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Determination
of GHG contributions by subsystems in the oil palm supply
chain using the LCA approach
Abstract
Purpose
With
increasing attention on sustainable development, the
environmental and social relevance of palm oil production
are now important trade issues. The life cycle assessment
(LCA) study of Malaysian oil palm products from mineral
soils including palm biodiesel was aimed to provide
baseline information on the environmental performance of
the industry for drawing up policies pertaining to the
sustainable production. The share of greenhouse gas
(GHG) contribution by the various subsystems in the oil
palm supply chain is considered here.
Conclusions
GHG
contribution by the nursery subsystem was found to be
minimal. In the plantation subsystem, the major sources
of GHG were from nitrogen fertilizers, transport and
traction energy. For the mill, biogas from POME was the
major contributor if biogas was not trapped.
Excluding contribution from upstream activities, boiler
fuel and transport were the major sources of GHG in the
refinery subsystem. In the biodiesel subsystem,
activities for production of refined palm oil and
methanol use were the most significant contributors.
A
decidedly significant amount of the GHG emissions
associated with the whole life cycle of the oil palm
supply chain was from the agriculture stage in the
plantation. Emissions were mainly from the use of
fertilizers. Another source of GHG was from the biogas
(methane) in the POME released in the milling process.
Efforts
should be focused on reduction of GHG emissions within
the control of the managers of the defined subsystems in
the oil palm supply chain. Production of raw materials
for use in the oil palm industry is beyond the management
of the oil palm industry, although one mitigation option
is through the implementation of green procurement.
Salient recommendations for reduction of GHG can be
summarized as follows:
Reduction
of inorganic fertilizers by applying more organic
nitrogen fertilizer. Returning the nutrient-rich slurry
from the POME treatment to the field or applying compost
(EFB+POME) as fertilizer, thereby reducing inorganic
fertilizer application.
Judicious
application of fertilizers using precision application
based on diagnosis of nutrient requirements from soils
and foliar analyses.
EPA
Issues Notice of Data Availability RE: Renewable Fuels
Production from Palm Oil Under the RFS Program: The
U.S. Environmental Protection Agency (EPA) is issuing a
Notice of Data Availability (NODA) to release its
lifecycle greenhouse gas (GHG) analysis of palm oil
used as a feedstock to produce biodiesel and renewable
diesel under the Renewable Fuel Standard (RFS) program.
The release of the NODA provides the public an
opportunity to comment on EPA’s analysis.EPA’s
analysis shows that biodiesel and renewable diesel
produced from palm oil do not meet the minimum 20%
lifecycle GHG reduction threshold needed to qualify as
renewable fuel under the RFS program. Background: In the
final RFS2 rule, published in March 2010, EPA assessed
the lifecycle GHG emissions of multiple renewable fuel
pathways (defined as feedstock, fuel type, and fuel
production process). Assessment of lifecycle GHG
emissions is necessary to determine which fuel pathways
meet the GHG reduction thresholds for the four renewable
fuel categories specified in Clean Air Act (CAA) Section
211(o), as amended by the Energy Independence and
Security Act of 2007 (EISA). The CAA requires a 20%
reduction in lifecycle GHG emissions for renewable fuel
produced at new facilities (those constructed after EISA
enactment), a 50% reduction for biomass-based diesel or
advanced biofuel, and a 60% reduction for cellulosic
biofuel. Assessing whether a fuel pathway meets these
thresholds requires a comprehensive evaluation of the
lifecycle GHG emissions of the renewable fuel as compared
to the GHG emissions of the gasoline or diesel fuel that
it replaces. The CAA defines lifecycle GHG emissions as
follows:
The
term ‘lifecycle greenhouse gas emissions’ means
the aggregate quantity of greenhouse gas emissions
(including direct emissions and significant indirect
emissions such as significant emissions from land use
changes), as determined by the Administrator, related to
the full fuel lifecycle, including all stages of fuel and
feedstock production and distribution, from feedstock
generation or extraction through the distribution and
delivery and use of the finished fuel to the ultimate
consumer, where the mass values for all greenhouse
gases are adjusted to account for their relative global
warming potential1
In
the final rule, EPA focused our lifecycle analysis on
fuels that were anticipated to contribute relatively
large volumes of renewable fuel by 2022, and thus did not
cover all fuels that either are contributing or could
potentially contribute to the program. In the preamble to
the final rule, EPA indicated that we would continue to
examine several additional pathways not analyzed for the
final rule, including those from palm oil, and would
complete this process through a supplemental rulemaking
process. This NODA presents our analysis of potential
pathways for biodiesel and renewable diesel produced from
a palm oil feedstock.
Lifecycle
Analysis
In
order to calculate lifecycle GHG emissions for the NODA
regarding palm oil biofuel pathways, EPA utilized
models developed for the final (RFS2) rule. These models
take into account energy and emissions inputs for fuel
and feedstock production, distribution, and use, as well
as economic models that predict changes in agricultural
markets.
EPA
used the same general approach to estimate global land
use change GHG emissions from using palm oil as a
feedstock as we have used to analyze other biofuel
pathways. Our analysis of palm oil biofuels, however,
also considers new data for Indonesia and Malaysia, where
close to 90% of world palm oil is currently produced.
These data include higher resolution satellite imagery
and maps of relevant geographic features, such as oil
palm plantations, palm oil mills and protected
conservation areas. EPA undertook a more detailed
assessment of Malaysia and Indonesia based on a number of
factors, including the scale of the palm oil industry in
this region and the availability of new data on palm oil
land use. The analysis considered past trends to
determine likely areas of future palm expansion and
classified these areas according to both their land cover
and their soil type.
Pathway
Determinations
EPA’s analysis found that
biodiesel and renewable diesel produced from palm oil
have estimated lifecycle GHG emissions reductions of 17%
and 11%, respectively, compared to the baseline petroleum
diesel fuel they replace. These biofuels therefore fail
to meet the minimum 20% GHG emissions reduction threshold
required by EISA for renewable fuel made in facilities
that commenced construction after December 19, 2007.
1 Clean Air Act Section 211(o)(1)
EPA’s
analysis highlights a number of key factors which
contribute to the lifecycle emissions estimate for
biofuels based on palm oil. For example, palm oil
production produces wastewater effluent that eventually
decomposes, creating methane, a GHG with a high global
warming potential. Another key factor is the expected
expansion of palm plantations onto land with carbon-rich
peat soils which would lead to significant releases of
GHGs to the atmosphere.
Administrative
Process
With
this NODA, EPA is soliciting comments on our analysis of
the pathways for biodiesel and renewable diesel produced
from palm oil. We will consider all relevant comments
received and will inform the public of any resulting
revisions in our analyses. Public notification could be
accomplished in one of several formats, such as a Federal
Register notice, a rulemaking action or a guidance
document. The appropriate form of public notification
will depend on the outcome of any reanalysis we deem
appropriate after consideration of public comments.
For
more information, please vsit the RFS
website
Frequently
Asked Questions
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 The EPA
recently released a decision to attribute a GHG savings
value to palm biodiesel that does not allow the feedstock
to count towards the biodiesel quotas under the Renewable
Fuel Standard (RFS2). This decision reflects a
significant divergence from previous assessments of the
feedstock, ensuring that palm oil does not have access to
the US biodiesel market (threshold for access is 20%)
under the Renewable Fuel Standard (RFS2). Even the
EU’s default value for palm oil, 19%, has been
classified as a distortion.
The
implications for this decision are serious, both for the
domestic biodiesel sector, the livestock sector and
consumers. This stems from the fact that limiting access
to selected feedstocks (which also carry heavy political
influence), undermines the ability of biofuel blenders to
source the most price competitive feedstock, while
increasing demand for domestically produced soybeans
beyond the level that makes soybeans price competitive.
Palm oil, the most widely traded vegetable oil, and
lowest cost, is being directly discriminated against by
the EPA’s decision.
Palm
oil’s GHG savings value has been varied, with
assessments ranging from 38% to 62.9% for palm oil
produced without methane capture (a technology employed
during processing that significantly reduces emissions).
Palm oil produced with methane capture has been
attributed with values between 72.6% and 79.1% (the EU
has given palm oil produced with this process a value of
56%). The US did not take this type of palm oil into
consideration as the technology has been supported by the
UN’s Clean Development Mechanism, with credits
earned from these savings traded in Europe.
While
the calculations for the RFS2 take into indirect land use
change, this topic has been hotly contested both within
the industry as well as Congress, with both sides
highlighting the continued uncertainty behind the science
of measuring indirect land use change. California’s Air Resources Board
(CARB) has reduced the factor by half following new
evaluations, while continued research points to the
factor meriting even greater reductions (if not removing
the factor outright). The indirect land use change debate
is generally centered on the expansion of agriculture
production in developing countries, which cannot be
separated from increased demand for foodstuffs and rising
populations.
The
decision by the EPA reflects a politically expedient
option that satisfies both domestic oilseed producers and
the environmental activists that underpin the Obama
Administration’s support. That their arguments
against the use of palm oil are based on distortions and
mischaracterizations of the palm oil industry further
demonstrates this distance between policy and fact.
It is
also important to consider the extent to which this
decision is a cost for taxpayers, who have been asked
consistently to provide subsidies to offset the costs of
biofuels in the energy supply. Without free market
competition between biofuel sources, government will
continue to turn to the taxpayer to support this subsidy
boondoggle, and undermine the US’s commendable
strategy of energy diversification, and thereby energy
security.
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Palm
Oil Biofuels Under the Renewable Fuels Standard
March 29, 2012
The Honorable
Lisa Jackson, Administrator
Environmental
Protection Agency
1200
Pennsylvania Avenue, N.W.
Washington,
DC 20460
Re: The
Treatment of Palm Oil Biofuels under the Renewable Fuels
Standard from the Center for Environment, Commerce &
Energy (Center); Docket ID No.
EPA–HQ–OAR–2011–0542
Dear Ms.
Jackson:
The Center for Environment, Commerce & Energy
(Center) is a national environmental organization
dedicated to protecting the environment, enhancing human,
animal and plant ecologies and increasing participation
in the environmental movement. We focus on regulations,
taxes, trade policies, monetary policies, and
environmental issues as they relate to energy policy.
The Center is a strong advocate for U.S. energy
prosperity and our organization raises awareness of the
costs and consequences of policy changes for consumers.
We believe it is important to ensure that minority
communities are not burdened by artificially high energy
costs. We also believe communities should be free to
exercise a full range of choices in the marketplace,
unburdened by short-sighted regulation or market
manipulation.
To that end we stand in firm opposition to the EPA’s
recent decision to penalize palm oil under the
Agency’s management of the Renewable Fuels Standard.
Palm oil is by far the lowest-cost biodiesel fuel source
on the international market. By not allowing the lowest
cost vegetable oil into the U.S. biofuel market, the EPA
is ensuring that the RFS2 will lead to significantly
higher prices at the pump as blenders rely on more costly
vegetable oil feedstocks, like soybean oil and canola.
Blocking its trade in the United States will unduly
burden poor communities. We have already seen the baleful
effects of higher energy costs in recent months as prices
paid at the gas pump have risen steadily. These price
increases have meant minority households have had less
money at their disposal for food, clothing, shelter,
education, health care, savings and investment, and more.
The EPA’s decision will make an unfortunate
situation worse.
More choices means more options when prices of one fuel
rise. More choices means greater predictability and
security when it comes to planning for the future.
Restricting choices means minority groups are acutely
vulnerable to price shocks in other sectors of the energy
market.
Businesses and their workers are also keenly interested
in policies regarding energy availability and
affordability. For example, truckers and independent rail
and transportation owner operators are significant
consumers of diesel energy, including biodiesel. Many of
these workers are minorities, and many of the businesses
are minority owned and managed. Indeed, the
transportation sector has been important to ensuring
upward mobility and economic growth for minority
communities.
As such, denying these communities the widest range of
options in the energy market reduces their flexibility
and their earnings prospects. It makes it more difficult
to plan for growth, to hire workers and to expand
operations that create opportunities and jobs for others.
The advance of sophisticated biodiesel systems is one of
the most promising technological developments in recent
memory. It promises to lower costs and generate long-run
efficiencies that will benefit all stakeholders. But the
full promise of biodiesel will not be realized without
ample global competition and diversity of supply. As
such, the EPA would be wise to avoid manipulating the
market for biodiesel and let competition and consumer
choice determine the ultimate shape and contours of
market.
While we appreciate the EPA’s interest in ensuring a
healthy domestic environment, we believe its rush to
penalize foreign biofuel will do little to help
America’s ecology and a great deal of harm to
America’s minority communities. The EPA should
reconsider its decision.
Sincerely yours,
Norris McDonald
-
JENA
ECONOMIC RESEARCH PAPERS
Recalculating
Default Values for Palm Oil
On
December 5, 2010, the Renewable Energy Directive (RED)
came into force in the EU. Member States are still
working to fully transpose the Directive into national
law and establish a framework for achieving their legally
binding greenhouse gas (GHG) emission reductions.
However, governments got off to a slow start as debate
continues on the validity of the directives foundations
including the default values used to measure the
sustainability of biofuels. Only sustainable biofuels can
be counted towards Member State targets. This, as a
matter of principle, makes sense with respect to the very
aim of renewable energy policies. On the other
hand, the vague and distortive formulation and values
regarding what is to be classified as
“sustainable” have negatively impacted the
perception of the underlying scientific base and
methodologies as well as the reliability in the European
biofuels sector. This uncertainty and the ongoing
controversial debates are affecting investment and
progress in the biofuel sector not just in Europe but all
over the world. Producers of soybeans in the US,
sugarcane in Brazil and palm oil in Malaysia and
Indonesia as well as European importers and end-users of
these products have all been sharply critical of the
default values, citing significant variations in
calculations that undermine the credibility of the values
contained in the Directive.
Given
the remarkable difference between the calculation of
carbon reduction performance of palm oil based biofuel by
the EU and a range of scientific studies which we
documented in an earlier paper (Pehnelt and Vietze 2009),
we are re-calculating GHG emissions saving potentials for
palm oil biodiesel in order to further assess the carbon
footprint of palm oil to overcome the lack of
transparency in existing publications on the issue and EU
regulations governing the biofuel feed-stocks.
The
aim of this paper is to calculate realistic and
transparent scenario based CO2-emission values for the
GHG emission savings of palm oil fuel compared with
fossil fuel. Using the calculation scheme proposed by the
Renewable Energy Directive (RED), we derive a more
realistic overall default value for palm oil diesel by
using current input and output data of biofuel production
(e.g. in South-East Asia) and documenting every single
step in detail. We calculate different scenarios in
which reliable data on the production conditions (and the
regarding emission values during the production chain) of
palm oil diesel are used.
Conservative
calculations based on the Joint Research Centre’s
(JEC 2011) background data and current publications on
palm oil production result in GHG emissions saving
potentials of palm oil based biodiesel fairly above the
35% threshold. We cannot reproduce the EU’s GHG
saving values for palm oil. Rather, our results confirm
the higher values obtained by other studies mentioned in
our last paper (Pehnelt and Vietze 2009) and elsewhere in
this study.
Results
indicate default values for the GHG emission savings
potential of palm oil biodiesel not only way beyond the
19 percent default value published in RED but also beyond
the 35 percent threshold. Our findings conclude that the
more accurate default value for palm oil feedstock for
electricity generation to be 52%, and for transportation
biodiesel between 38.5% and 41%, depending on the fossil
fuel comparator. Our results confirm the findings by
other studies and challenge the official default values
published in RED. As indicated by lawsuits filed by
environmental NGOs against the Commission for greater
transparency related to the assessment of biofuels, the
process has been severely lacking in full disclosure of
metrics used to achieve the values contained in the
Renewable Energy Directive. As a result, the reliability
of the Directive to support the EU’s low-carbon
ambitions is being undermined, exposing the EU and
Commission to charges of trade discrimination and
limiting the ability of Member States to achieve their
legally binding GHG emission reductions.
This
analysis demonstrates that a full review of the values
contained in the Directive should be undertaken and the
values revised to ensure their accuracy, and raises
questions as to the method that the values were
originally established. Were outside parties consulted,
including the industries directly affected by the
assessments in the Directive? Were these values peer
reviewed? In light of grievances expressed by producers
throughout the world, including US soybean growers,
Brazilian sugarcane farmers, and Malaysian and Indonesian
palm growers, ensuring the Directive does not
discriminate against imports is critical to the long-term
efforts in the EU to reduce GHG emissions.
Summary
and Conclusion
The
purpose of this review was to gain a comprehensive
understanding of the metrics considered in developing the
default values in the Directive, utilizing palm oil
– one of the more controversial biofuel sources
– as a case study of this process. Unfortunately,
the conclusions of this analysis demonstrate that the
methodology employed by the JRC lacks credibility, and
subsequent efforts to gain further clarity from the JRC
were not successful. As a result, the authors of this
report support the efforts by environmental NGOs to gain
further clarity on the European Commission’s and
EU’s calculations and deliberations on the
assessment of biofuels, and institute greater
transparency in the process. Based on the standard
calculation scheme proposed by the Renewable Energy
Directive (EU 2009) and using current data of palm oil
biodiesel production published in various reliable
sources, we cannot reproduce the default values for palm
oil biodiesel given in the annex of the RED. In contrast,
our results indicate default values for the GHG emission
savings potential of palm oil biodiesel not only far
above the 19 percent default value published in RED but
also beyond the 35 percent threshold. Our results confirm
the findings by other studies and challenge the official
default values published in RED.
These
findings and concerns surrounding the trade implications
of the Directive give cause for serious concern within
the EU community regarding the viability of the system to
effectively deliver the GHG emissions savings that are
required in the legislation. While limiting imports of
inefficient and environmentally damaging biofuel sources
should be supported, distorting technical parameters in
legislation to limit entry into the European market would
be costly for consumers and businesses while exposing the
EU to unnecessary trade disputes and possible
retaliation.
The
EU has been a leader in the promotion of low-carbon
solutions to energy needs and the development of
technologies that will spur a new age of energy
generation and transportation. Unfortunately, since the
EU began to pursue this goal the debate has increasingly
turned to how these efforts can be increasingly limited,
through introduction of new, untested sustainability
criteria and trade barriers to limit competition from
third countries. Not only will these measures undermine
confidence in Europe’s low-carbon ambitions,
however, they will also harm the global cooperation that
is key to achieving these goals.
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Institute
for Energy and Environmental Research - IFEU
Heidelberg
Gmb
Final
Report
An
Assessment of Energy and Greenhouse Gases of NExBTL
NExBTL:
Neste
Oil of Finland has developed a proprietary technology
capable for producing a high quality diesel fuel from
animal fats and vegetable oils. The process is called
NExBTL (Next Generation Biomass to Liquid). Engine and
emission testing results has shown that NExBTL has
superior properties over current diesel products or
alternative renewable fuels.
A
100 million euro, 170 000 tonne/year plant is currently
under construction at the Neste Oil Porvoo refinery with
start-up scheduled to begin in the 2nd quarter of 2007.
The
NExBTL process is a catalytic hydrotreating process that
is integrated into the Porvoo refinery. It utilizes the
refinery's existing infrastructure and utilities
including hydrogen, steam, electricity, personnel,
blending tanks, waste facilities, harbour etc. Feedstocks
are received at the harbour or by surface transport and
stored in holding tanks before being transferred to the
pretreatment unit where, using conventional degumming
technology, impurities are removed. From here the feed is
heated and pumped into the hydrotreating reactors. In the
reactors, oxygen is removed and the feed (triglyceride)
is converted into three separate branched chain
paraffins. Side products of the process are fuel gas
which is used for energy and a small amount of
biogasoline. Oxygen in the triglyceride is removed as
water and carbon dioxide.
The
resultant NExBTL product can either be used as a pure
diesel fuel or mixed with diesel to be used as a fuel
component. The NExBTL product is a pure hydrocarbon
product which meets EN590 diesel specifications except
for density which is >> 780 kg/m3. It is free of
aromatics, sulfur and oxygen. It has good stability (no
unsaturated material). It has a low cloud point which can
be adjusted from - 5 to - 28°C by severity of process
conditions in order to produce either summer or winter
diesel. The renewability of NExBTL can be verified by
radioactive C14 analysis.
Executive
summary
The
Neste Oil Corporation has developed a technology to
produce a diesel-like fuel (NExBTL) from animal fats and
plant oils. The IFEU-Institute for Energy and
Environmental Research Heidelberg, Germany, has been
commissioned by Neste to undertake an evaluation of the
energy and greenhouse gas balance of NExBTL.
A
comparative analysis has been undertaken which uses the
methodology of the life-cycle assessment standard ISO
14040-43 and allows to identify the parameters most
relevant for the results. The production of NExBTL from
rapeseed and palm oil has been analyzed including all
materials and processes for the provisions of plant oils
and their processing in the NExBTL process. Furthermore,
all by-products have been considered as credits for
substituting equivalent products. This life-cycle has
finally been compared to the life-cycle of conventional
diesel fuel. Besides a scenario for the site in Porvoo,
Finland, also a scenario for a typical European site has
been analyzed.
•
Result 1
The
results show a clear, but quantitatively different
advantage in the energy and greenhouse gas balance if
NExBTL substitutes conventional diesel fuel.
That
means that the use of NExBTL saves primary energy and
greenhouse gas emissions over the entire life-cycle in
comparison with diesel fuel from fossil energy carriers
for all comparisons, scenarios and sensitivity analyses
considered in this study.
•
Result 2
The
quantitative results mainly depend on the provision of
crude plant oil for the process and not very much on the
NExBTL-process itself.
That
means that all variations in the NExBTL-process, e.g.
different provision of required hydrogen or the use of
by-products such as fuel gas, bio-gasoline and sludge
have a much lower influence on the overall result than
the provision of plant oils. Thus it has to be
distinguished between the production of NExBTL from
rapeseed oil and palm oil.
NExBTL-production
from rapeseed oil
As
has been described under Result 1, NExBTL shows a clear
advantage over conventional diesel fuel. Differences in
the results mainly depend on where the rapeseed is grown
(Europe or overseas) and on the alternative land use if
rapeseed would not be grown (natural or set aside land).
The results for rapeseed from overseas are on the upper
limit of the bandwidth due to the longer transportation
distance. The results over all considered scenarios show
the following bandwidths of savings:
Energy
savings: 30 - 33 GJ primary energy per t of NExBTL
Greenhouse gas savings: 1.2 - 2.5 t CO2-equivalents per t
of NExBTL
The
results for NExBTL from palm oil mainly depend on the
alternative land use on the plantation if no palm oil
would be produced:
•
Case A: If the area would not be used and thus stayed
untouched (natural forest), NExBTL, as for rapeseed oil,
has a clear advantage over conventional diesel fuel. The
production in the Porvoo plant, for which Malaysian palm
oil will be used, leads to the following savings:
Energy
savings: 44 GJ primary energy per t of NExBTL
Greenhouse
gas savings: 1.4 t CO2-Equivalents per t of NExBTL
•
Case B: If another plantation would occupy the area of
the palm oil plantation, the results show a considerable
difference between the two alternative plantation land
uses investigated in this study: food oil and coconut
plantations. For average Malaysian palm oil, energy
savings are about 33 GJ for food oil and 16 GJ for
coconut plantations.
Greenhouse
gas savings are about 2.2 t and 1 t of CO2-Equivalents,
respectively.
Besides the different land use alternatives, the
results also depend on the technology and infrastructure
used for production and processing of palm oil. This
especially applies to the results for greenhouse gas
emissions. Compared to typical palm oil (world market),
average Malaysian palm oil results in about 15% higher
greenhouse gas savings for NExBTL. Good practice palm oil
even results in about 65% higher savings compared to
typical practice palm oil.
Sources: EPA Notice
on Palm Oil, Choo/Hashim/Puah
Carbon Footprinting, Jena
Economic Research Papers, Institute
for Energy & Environmental Research.
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