Norway’s use of palm oil biodiesel sees massive drop

In 2017, Norway consumed 317 million liters of biodiesel based on palm oil, corresponding to around 10 percent of the total diesel consumption. In 2018, the number was 93 million liters – a reduction of 224 million liters, according to numbers released last week by the Norwegian Environment Agency.

“It is a big win for rainforests and the climate when we stop burning palm oil for fuel. To combat climate change and stop the burning of the world’s rainforests, we need solutions that deliver. Consumption of biofuels based on palm oil and other high deforestation risk feedstocks adds fuel to the fire and must end”, says Nils Hermann Ranum, head of Rainforest Foundation Norway’s drivers of deforestation program.

Massive increase in burning of palm oil for fuel in Europe

Europe, including Norway, has seen an aggressive growth in demand for palm oil over the last years, stimulated by policies to increase the consumption of renewable energy in transportation. This is an unintended consequence of policies to promote the use of biofuels to reduce greenhouse gas emissions. Palm oil is a cheap and readily available feedstock for biofuels, despite a large body of scientific evidence showing that burning palm oil for fuel is even worse for the climate than burning fossil diesel. (See e.g. the European Commission’s recent report on the expansion of biofuel feedstocks into high carbon stock areas, and the report For Peat’s Sake: Understanding the climate implications of palm oil biodiesel)

The increase in demand in Europe has driven the expansion of oil palm plantations in Indonesia and Malaysia, at the expense of carbon and biodiversity-rich rainforests and peatlands. In 2017, a total of around 4 billion liters of palm oil was used for biofuel in the EU.

The all-time high consumption of palm oil based fuels in Norway in 2017 was accompanied by a sustained national debate on the negative land use and climate impacts of increasing palm oil demand through biofuel policy, including around indirect land-use change impacts. This resulted in a number of policy shifts from both government and business actors to remedy the situation, leading to the current drop in consumption.

The recently published data on biofuel consumption in Norway also reveals an almost 40 percent increase in the use of advanced biofuels, to 190 million liters. Advanced biofuels generally have a far better climate footprint than fossil fuels, palm oil and other food-based biofuels. The consumption of food-based (‘first generation’) biofuels other than palm oil was stable.

“It is very promising that Norway has been successful in turning the tide and reduced consumption of palm oil-based biofuels. Now the rest of Europe must follow suit”, says Ranum.

Norway in the lead

The Norwegian parliament in December last year voted to make Norway the first country in the world to exclude biofuels based on high deforestation risk feedstocks such as palm oil, from 2020. The details of the regulatory measures are expected to be presented in October 2019 together with the national budget proposal for 2020.

In October 2018, the Norwegian government also announced that from 2020, a biofuel blending mandate will be imposed for the aviation sector. Crucially, it excludes biofuels based on food or feed crops, as only advanced biofuels count towards the quota obligation.

In addition, in spite of the strong policy incentives, four of Norway’s five major fuel retailers have voluntarily discontinued the sale of palm oil-based biofuel.

The EU has also passed legislation to phase out the use biofuels based on feedstocks with a high indirect land use change risk (specified as palm oil), but this will entail a gradual phase-out by 2030.

Palm oil debate creates controversy

EU science reviews show that 45% of the expansion of palm oil production over recent years has happened on forested lands, which is far higher than any of the other crops that are commonly used as biofuel feedstocks.

Some government and industry groups in countries like Indonesia and Malaysia have been outraged by what is portrayed as a ‘ban’ on palm oil. The suggested policy changes in Norway and the EU are not to ban palm oil, but a removal of incentives to use biofuels based on feedstocks with a high risk of indirect land-use change (deforestation) to comply with renewable energy mandates, on the basis that they fail to deliver reductions in greenhouse gas emissions.

“Until we see a strong shift in the regulation of the industry and enforcement of anti-deforestation policies, it is vital that well-meaning biofuel policies do not continue to inflate demand for palm oil and thereby contribute to continued deforestation”, says Ranum.