17/08/2009 (Energy Boom.com) - For every step forward the biofuel industry seems to make, they take at least three back.

It has happened once again as, amidst the good news of algae production and massive funding, the UK's The Times released a report indicting top oil giants for destroying rainforests to produce biodiesel.

Why? Palm Oil - a versatile substance already employed in everything from food to soap. Certain oil magnates have decided to also use it as an additive to biodiesel. One wants to say why not? Capitalist markets allow for such enterprise. Biofuel can be derived from dozens of crops but many fuel companies choose palm oil because it can be cheaper than the more sustainable alternatives such as rapeseed.

The problem is the method required. And this one in particular completely negates any good carbon reduction from  burning biofuels in cars.

In 2009, from January to April, twelve oil companies supplied a total of 123 million litres of palm oil to filling stations, according to official figures obtained by The Times.  Only 15 per cent of the palm oil came from plantations that met any kind of environmental standard. Much of the rest came from land previously occupied by rainforest.

Sound familiar? Of course it does. The whole reason the biofuel industry has come under heavy fire is because of the heavy greenhouse emissions that come from growing the necessary crops (save for algae). Clearing rainforest to create biofuel plantations releases vast quantities of carbon stored in trees and soil. It takes up to 840 years for a palm oil plantation to soak up the carbon emitted when rainforest is burnt to plant the crop.

The Culprits?

Last year British motorists used 27 million litres of palm oil from Indonesia and 64 million litres from Malaysia, according to the Renewable Fuels Agency (RFA), the government-funded watchdog that monitors biofuel supplies. Fuel companies also supplied 32 million litres of palm oil from “unknown” countries. The agency knows which companies are using palm oil but is refusing to name them on the ground that the information is commercially sensitive.

The truth is, several leading fuel industry figures sit on the agency’s board, including a director of the oil company BP and a senior executive from the coal-mining group Anglo American.

Ian Duff, a forest campaigner for Greenpeace, said: “It cannot be right that the watchdog on biofuels has oil company directors on its board. The agency is preventing the public from discovering which of these companies are selling us palm oil, one of the cheapest and most environmentally damaging biofuels.”

Several major oil companies are exploiting a loophole in the agency’s reporting system to avoid declaring what type of land has been used to grow their biofuel. They are obliged to submit a sustainability report but in the section on the previous use of the land are allowed to say “unknown”.

When calculating the greenhouse gas savings from biofuel the RFA ignores the previous use of the land.

Chevron, Total, Esso, BP, and Murco all acknowledge their use of palm-oil, with some expressing no knowledge of where it was sourced from.

Shell, however, claimed to have used no palm-oil in the previous years, due to an inability to find it from a renewable source.