While I don't know the context of Mr. Silvius's remark (such comments are often taken out of context) and recognize him as an excellent tropical ecologist and writer, his quote as it stands in the AP article makes it easier for critics to dismiss environmental arguments on oil-palm development in Southeast Asia.

Palm oil is quite obviously not a failure as a biofuel—it is derived from perhaps the most productive energy crop on the planet. A single hectare of oil palm may yield nearly 6,000 liters of crude biodiesel. In comparison, soybeans and corn generate only 446 and 172 liters per hectare, respectively. The problem with palm oil is not its yield, but how it is produced. Presently much of the world's palm oil is coming out of the forests of Southeast Asia—increasingly in the biodiverse rainforests of Indonesia.

Oil-palm cultivation has expanded in Indonesia from 600,000 hectares in 1985 to more than 6 million hectares by early 2007, and is expected to reach 10 million hectares by 2010. With such rapid growth—and room for expansion—Indonesia is expected to displace Malaysia as the world's largest producer of palm oil within a few years. Environmental groups say that clearing for oil-palm plantations is directly threatening key habitat for such endangered species as the orangutan, the Bornean Clouded Leopard, and the Sumatran Rhino as well as exacerbating illegal logging already rampant across the region.

Where rainforest once stood in Malaysia now stands row after row of oil palms. Photos by Rhett A. Butler. 
Beyond forest-clearing for oil palm, palm-oil production often employs large amounts of fertilizer and generates hefty amounts of waste, which can pollute local waterways. An added threat comes from the conversion of carbon-rich peatlands for cultivation. Merely draining peatlands releases massive amounts of carbon dioxide into the atmosphere—Silvius's own Wetlands International estimates that destruction of these ecosystems and forests in Indonesia alone releases some 2 billion tons of CO2 per year or 8 percent of total anthropogenic emissions of the greenhouse gas.

So yes, as currently practiced, palm-oil production often has a significantly negative impact on the environment, but it's unlikely that oil-palm plantation development will slow anytime soon. Its continuing growth is due to (1) lack of economic alternatives in many areas where the renewable energy source is grown and (2) rising biofuel demand from China.

After large-scale deforestation in the lowlands and the importation of millions of people through poorly-executed transmigration programs, there are few economic options in most of Borneo and Sumatra, two islands where much of the current land conversion for oil palm is occurring. Having lost jobs in the forestry sector, many villages are faced with having to decide whether to give up the remaining forest for oil palm or continue with subsistence living. Oil-palm plantations are often viewed as offering the best economic potential, especially given rapidly expanding demand from China.

While policymakers debate in Brussels the impact of biofuels, it seems clear that in the future China is going consume far greater amounts of biodiesel than Europe. With demand for cars surging and the country facing energy supply constraints and pollution problems, China appears to be ramping up for a massive expansion of diesel car production. Where is the diesel fuel to power these vehicles going to come from? Smart bets are on oil palm in southeast Asia and soybeans in the Amazon. Why else would state-backed Chinese firms be bankrolling oil-palm development in Indonesia and infrastructure projects linking coastal South America to the heart of the Amazon? The potential of close-to-home oil-palm plantations is simply too alluring.

Offering palm oil producers a carrot

Oil-palm plantations in and around Tanjung Puting National Park in Kalimantan, Indonesian Borneo Satellite image courtesy of Google Earth.

Vast areas of natural forest have been converted for soy farms in the Amazon and oil-palm plantations in Asia. However, on a relative basis, oil palm may be more ecologically sound due to its higher oil yield than soy. In theory, because oil palm can produce as much as 30 times more oil per unit of area, it could require less land clearing. Of course, planting oil palm on previously deforested land would be a preferable option. 
Since demand for palm oil isn't going to go away, Europe's best approach is to convince Indonesian oil-palm producers to cultivate their crop in a manner that's less damaging to the environment, as exemplified by the Roundtable on Sustainable Palm Oil (RSPO). This won't be done by hand-holding or Kumbaya circles; it will be done through financial incentives—if no one is demanding "green" palm oil, no one will produce it. Europe should inform producers that it is willing to buy a set amount of palm oil (in billions of liters per year), provided that it is independently certified as having been produced in an environmentally friendly and socially equitable way. Europe may even want to offer a minimum price guarantee to satisfy producers that it intends to hold up its side of the bargain.

With scaled-up production and reduced government subsidies (see below), it may turn out that sustainable palm-oil production isn't as costly as we've been led to believe. Further, a guaranteed market for eco-friendly palm oil will provide opportunities for innovation that could further reduce costs.

Europe should engage the Indonesian government as well. It should urge Indonesia to eliminate subsidies for oil-palm plantations grown on natural forest lands, ban development of peatlands, and set aside primary forests for conservation in exchange for funds reflecting the value of the carbon emissions avoided. (Since deforestation produces greenhouse gases, reducing forest clearing cuts global warming emissions.)

Since neither the United States nor China is going to take the lead on this issue, Europe should not miss the opportunity to do so. In a place where there are few economic opportunities for large numbers of rural people living in a degraded landscape, green biofuels could go a long way toward addressing poverty, the environment, and global climate change. Figuring out a way to plant oil palm across the vast stretches of deforested wasteland in Indonesia could be immensely beneficial to local populations as well as the environment—palm-oil plantations sequester more carbon and support vastly more species of wildlife than barren land.

Now's the time to act. Almost everyone will be better off from greener palm oil.