07/05/2010 (Reuters), Abidjan - Ivory Coast's top palm oil producer has joined forces with Swedish carbon offset firm Tricorona to replace its fossil fuel inputs with waste wood chips and palm kernels, the firm said.

SIFCA Group, one of West Africa's top oil and rubber producers, aims to start the biofuel project by September.

Senior project engineer Mathieu Kacou told Reuters in a recent visit it will take a net 45,337 tonnes of its carbon dioxide emissions out of the atmosphere annually, equivalent to taking 8,200 passenger vehicles off the road for a year.

It will also slash SIFCA's own energy costs by more than half, from around 21,000 CFA francs per tonne of steam generated to 11,000 CFA francs per tonne to run its factories.

He declined to comment on how much the project was worth.

"It's a win-win initiative," Kacou said. "We are becoming more environmentally-friendly and it will help us reduce our production costs and become more competitive on the market."

The palm oil factory previously generated steam to run its operations from two natural gas boilers and a diesel boiler.

A biomass plant will be installed, taking wood waste from the company's rubber plantations and palm shells.

The project has been submitted under the Kyoto Protocol, under which rich states can meet some greenhouse gas emissions pledges by sponsoring green projects in developing nations.

Asia and South America were quick to join the scheme, but African countries make up less than 2 percent of projects.

"European industries looking to expand their involvement in clean development prefer to deal with China, India and Brazil," said Abdel Karim Traore of Paris-based Ecosur, a carbon broker on the project with interests also in Senegal, Nigeria, Cameroon, Democratic Republic of Congo and Algeria.

That could be changing. Ecosur has already registered another project with Ivory Coast's SITRADE to turn 200,000 tonnes of rubbish per year to biofuel, saving 70,000 tonnes of CO2 equivalent, mostly methane, a potent greenhouse gas.

Environmentalists worry about palm oil companies because of the huge devastation they have caused to rainforests in Indonesia and Malaysia, making both big emitters of carbon.

Most of Ivory Coast's natural forest was already destroyed decades ago and SIFCA says it has not cut down any new trees but bought its plantations from the government.

But the company admits it also buys a large chunk of its oil palm requirements off small farmers, some of whom may be cutting down rainforest to plant their palms.