The Oil Palm

Smallholders Overcome European Hurdles to Biofuels Market

The recent announcement that Mission New Energy had signed a contract to supply more than USD $100 million worth of palm-based biodiesel is welcome news to Malaysia’s smallholders. Despite the numerous hurdles imposed on palm biodiesel by the EU’s Renewable Energy Directive, the Federal Land Development Authority (FELDA) – which represents more than 811,140 hectares of smallholder plantations as of 2009 – has demonstrated the superior sustainability and efficiency of Malaysia’s producers. Through its joint-venture with Mission New Energy, FELDA’s smallholders have become a critical party to the EU’s effort to reduce greenhouse gas (GHG) emissions through the use of biofuels.

Palm oil’s sustainability cannot be ignored. Palm oil is the most land efficient oilseed available, exceeding land efficiency of soy and rapeseed by 2.5 and seven times respectively. As a result, while accounting for more than 36% of global oilseed trade, production only occupies 4.5% of all land devoted to oilseeds.

Meanwhile, the oil palm is a perennial crop, sequestering up to 30 years of carbon, while re-planting practices ensure that carbon remains sequestered even after felling. These are but a few of the examples of palm oil’s great efficiency and sustainability.

Malaysia’s smallholders have prospered under the expansion of palm oil, as rural development has increased incomes and provided the necessary infrastructure to support societal advancement. In the midst of this development, however, Malaysia has retained the very forests and biodiversity that has always provided for the country, even exceeding its commitment made at the 1992 Rio Earth Summit to retain 50% of its forests.

While western interests mischaracterize the sustainability of biofuels, they need look no further than the Malaysian smallholders and the palm oil they produce.