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Imported biofuel contributing to deforestation in Indonesia and Malaysia
The Australian - January 27, 2009
Greg Roberts – Australia is contributing directly to the widespread destruction of tropical rainforests in Indonesia and Malaysia by importing millions of tonnes of taxpayer-subsidised biodiesel made from palm oil.
Imports of the fuel are rising, undermining the Rudd Government's $200 million commitment to reduce deforestation in the region – a problem that globally contributes to 20 per cent of the world's carbon emissions.
The bulldozing of rainforests to make way for palm oil plantations is also putting further pressure on orangutans and other endangered wildlife throughout Southeast Asia. And the Australian biofuels industry says it is struggling to compete with the cheap imports from Asia, which are touted as an environmentally friendly alternative to diesel.
Without action, the problem will only get worse, with demand for biodiesel imports likely to rise sharply when NSW legislates to introduce Australia's first biodiesel mandate – 2 per cent this year, rising to 5 per cent when sufficient supplies become available.
But the Rudd Government is likely to come under pressure to follow the lead of other Western nations in banning imports of palm oil-based biodiesel. Biodiesel manufacturers in Australia use primarily tallow from abattoirs and recycled cooking oil. Caltex, the biggest biodiesel customer in Australia, refuses to use palm oil-based fuel on environmental grounds, but it is being imported by independent operators.
Federal Resources Minister Martin Ferguson, who is conducting a review of government assistance to the biofuels industry, declined to comment on whether he was aware of the Asian biodiesel imports.
Unlike imported ethanol, imported biodiesel is not subject to the 38.14c-a-litre fuel excise, so the biodiesel imports from Asia are effectively subsidised by Australian taxpayers. Rex Wallace, the chief financial officer of the Adelaide-based Environmentally Friendly Fuels, said his company had purchased five million litres of palm oil-based biodiesel in recent years.
"We would not need to import it if people could produce a quality product on a regular basis in Australia," he said. "We would love to buy more local produce but it's just not there."
Mr Wallace said his company imported from certified plantations in Malaysia that had been developed on land cleared historically for other purposes such as rubber plantations.
Australian Biodiesel Group chief executive Bevan Dooley said the industry estimated that 10 million litres of palm oil-based biodiesel was imported a year. "Europe and the US are closing the gates on this product, but Australian taxpayers are subsidising its import," Mr Dooley said.
He said it was difficult to establish if certified plantations were environmentally friendly, and Australian imports were helping to fuel demand worldwide for "environmentally destructive" biodiesel from Malaysia and Indonesia.
"These imports are causing many Australian producers to suffer losses and are detrimental to the establishment of a biodiesel industry in Australia," Mr Dooley said.
"Australia is seen as a dumping ground for palm oil-based biodiesel as there is no requirement for the fuel to be derived from sustainable resources." He said there was ample capacity in Australia to meet demand.
The Australian industry produces about 50 million litres of biodiesel a year, but has the capacity to produce much more. About 80 million litres will be needed annually to meet a 2 per cent mandate in NSW.
Indonesia has about 6 million hectares of palm oil plantation and Malaysia 4.5 million ha. Indonesia plans to double palm oil production by 2025 and is developing a plantation of 1.8 million ha in east Kalimantan.
To make way for the plantation, the largest remaining area of lowland rainforest in Kalimantan is being bulldozed, with the loss of habitat for orangutans, clouded leopards and other rare animals.