The Oil Palm

Palm Oil Has Tremendous Energy Potential; Food Continues to be Primary Driver of Expansion

Ongoing innovation in the palm oil sector is leading to incredible advances, many of which are contributing to the development of sustainable energy production. This includes the development of biomass based biofuels and rolling out of biogas capture facilities at palm oil mills – all developments that seek to realize the full potential from the oil palm beyond just the palm fruits that have driven the industry to date.

And according to a study published in the Journal of Oil Palm and the Environment by Dr Ian Halsall, the energy potential of oil palm by-products is enough to produce 5.67 exajoules of energy annually, or more than most countries outside of the G-8 consume in an entire year. This energy can be used in transportation and shipping as well as electricity generation throughout the world, while reflecting a far less costly alternative to competing biomass fuel sources that are being tested.

Unfortunately this energy potential is being overlooked due to significant pressure from the EU, the US and environmental activists to block palm oil imports. Much of this is motivated by the misplaced belief that biofuels competing with food demand, a concept that was proposed by the World Bank in a 2008 report, “A Note on Rising Food Prices.” The report attributed a commodities price boom at the time to biofuel mandates. However, subsequent analysis by the World Bank’s Development Prospects Group concluded that, “… the effect of biofuels on food prices has not been as large as originally thought.” In other words, the food versus fuel claim was a myth.

And now recently released research by the International Food Policy Research Institute (IFPRI) further illustrates that palm oil expansion and production continues to be driven by demand for edible oils – particularly from the developing world.  This demand has been further compounded by NGO campaigns against GM soybeans, excluding entire markets from the trade in soybean oil.

With the world population expected to increase to 9 billion, primarily in developing countries, ever greater demand for foodstuffs will continue to drive increased production and expansion of the world’s most widely consumed vegetable oil. But with continued research and innovation, the Malaysia and the palm oil industry are harnessing the full potential of palm oil as the most land efficient and high yielding vegetable oil source available to meet this demand with limited expansion.