EPA grapples with climate effects of palm oil in fuel

A delegation led by Gina McCarthy, EPA’s top air regulator, is visiting palm oil plantations and meeting with government and industry officials, scientists, and activist groups in Indonesia this week, the agency said.
 
“This is a complicated issue, and we are reviewing data and comments extremely carefully,” McCarthy said in a statement. “Our reason for being here is to seek a broad range of perspectives, to learn more and gather the best scientific data available to help inform our final assessment. No final decisions have been made at this time.”

EPA’s draft finding addressed whether palm oil-based fuels can receive credit under the federal Renewable Fuel Standard (RFS).

It has already prompted high-level meetings between the agency and the Indonesian government. They include a Sept. 21 meeting between EPA Deputy Administrator Bob Perciasepe, Indonesian Environment Minister Balthasar Kambuaya, Indonesia’s ambassador to the U.S. and others. 

On May 31, McCarthy met with Zulkifli Hasan, Indonesia’s minister of Forestry, as well as a lobbyist with Holland & Knight, which is representing palm oil producers in Indonesia and Malaysia, and others.

“The Minister discussed the great importance of palm oil to his country’s development. He explained the history of deforestation in Indonesia over the last two decades and discussed more recent policies that aim to reduce such deforestation,” states a summary of the meeting in EPA’s records docket for the palm oil decision.

The agency has also met with environmentalists that oppose palm oil development. Activists are keeping a close eye on McCarthy’s trip.

“Including palm oil in the RFS would mean that refiners would fill their quota with palm, and American drivers would be forced to fill up their gas tanks with hundreds of millions of gallons of palm oil, helping push orangutans, Sumatran rhinoceroses, tigers and other endangered wildlife closer to extinction,” said Glenn Hurowitz, director of campaigns for Climate Advisers, in a statement.

But the palm oil industry argues that the EPA's initial finding is based on inaccurate assumptions and data, and fails to credit conservation efforts.

In comments filed with the EPA, Indonesian and Malaysian industry groups have alleged that EPA’s analysis badly overstates the extent to which increased palm oil development is destroying forests, which releases carbon.

Here’s what they’re fighting over: the EPA released an analysis in January showing that diesel fuels made from palm oil don’t qualify under the 2007 law that greatly expanded the volume of biofuels that must be blended into the nation’s fuel supply.

The 2007 law requires that biofuels have “lifecycle” carbon emissions — that is, emissions from crop production, refining, transport and use — at least 20 percent lower than traditional gasoline and diesel.



EPA concluded that palm-oil-based fuels have lower emissions, but that the difference isn’t big enough to meet the RFS. The draft analysis estimated that two types of palm-oil-based diesel fuels had greenhouse gas emissions that were 11 percent and 17 percent lower than traditional diesel.

But while palm oil-backers say the EPA has overstated the “lifecycle” emissions, several environmental groups allege the agency is actually undercounting palm-based emissions.

Environmentalists fighting biofuels argue that forest clearing and other land use changes create a long-term carbon “debt” that overwhelms any emissions benefits at the tailpipe.

“As several recent peer-reviewed studies make clear ... the palm oil industry’s rampant deforestation and conversion of ultra carbon-rich peatland means that palm oil produces far more greenhouse gases than even the most polluting types of petroleum,” Hurowitz said.

Joint comments to the EPA from a number of environmental groups make a similar point.

“We expect that a more accurate analysis will demonstrate that emissions from palm oil based diesel biofuels as produced today and in the foreseeable future are higher than fossil fuels,” said the Union of Concerned Scientists, the World Wildlife Fund, the Natural Resources Defense Council, the National Wildlife Federation and the Clean Air Task Force in joint comments submitted to the EPA in April.

EPA, for its part, is downplaying the impact of the palm oil decision.

“Our final assessment will only be for the narrow purpose of evaluating whether palm oil biofuels meet the greenhouse gas reduction thresholds to qualify as ‘renewable fuel,’ ‘biomass-based diesel’ or ‘advanced biofuel’ under the U.S. Renewable Fuel Standard program,” McCarthy said in her statement.

“This effort only applies to the use of palm oil for transportation fuels, and will not restrict the ability of palm oil biofuels to be imported to the United States, nor will it affect exports of palm oil to the United States for use in food or other purposes. It will only help to determine whether such fuels are eligible to be used to comply under U.S. law with the RFS program,” she said.

But while she said the decision will not restrict the ability to import palm oil biofuels to the U.S., several refining and biofuels industry sources say that if the EPA's initial finding stands, there would be little interest in using palm oil for biofuels, because they would not help refiners meet the RFS requirements.

EPA did not provide any details about the schedule for the delegation. The Jakarta Post reported Wednesday that the agency has completed its fact-finding visit to plantations in Indonesia.

“We will continue to talk and understand what the technical issues are, and once we’re comfortable, we will make a decision, but not before,” McCarthy told reporters at a workshop on sustainable palm oil production, the Post reported.