World Rainforest Movement

Malaysia: The huge cost of a cheap fuel

Malaysia, together with Indonesia, is the world’s leading producer of crude palm oil for export, at a high cost, though. According to a 2005 Friends of the Earth report, 87 per cent of recent deforestation in the country has occurred to make way for palm-oil plantations. Since Malaysian rainforests are some of the most diverse ecosystems on the planet, clearing these areas poses serious threat to countless species of plants and animals.

Not only does this practice wreak havoc on the countries’ megafauna (such as orangutans, Sumatran rhinos and tigers, Asian elephants, gibbons, and tapirs), it also causes significant pollution. The United Nations’ Food and Agriculture Organization estimates that 25 to 30 percent of the greenhouse gases released into the atmosphere each year (about 1.6 billion tons) comes from deforestation.

Wetlands International have shown that destruction of SE Asian peatlands for Palm Oil plantations, which cover 0.2% of the global land surface, is responsible for 8% of the global CO2 emissions. However, the Clean Development Mechanism (CDM) of the Kyoto Protocol currently allows for peatland areas that have been burned and cleared to create biofuel plantations to be eligible for CDM funding!

The Malaysian government is drafting a national biofuel policy to encourage production and domestic consumption of palm oil based biofuel. “For supporting our palm oil sector, we have identified `3 bios’ namely, biogas, biomass and bio-diesel,” said Dr Chan Kook Weng, Senior Research Fellow at the Malaysian Palm Oil Board (MPOB). The government approved 54 projects this year alone to create B100, a biodiesel based from 100 percent palm oil. On September, Malaysia announced a joint venture with private partners to build three plants that will make the new fuel for export to Europe.

That’s not good news neither for the people nor for the environment. “Corporations first clear the land for its lucrative timber. Then they burn everything that’s left on the land, such as shrubs, stumps, and peat soil, which can smolder for three to four months before it’s finally extinguished”, says Michelle Desilets, director of the Borneo Orangutan Survival Foundation, UK. Tree-felling combined with the burning creates a haze above the forest and releases tons of carbon dioxide into the atmosphere, contributing to the same global warming that biofuels are supposed to reduce.

“When you turn a product into a world commodity, you get corporations involved,” says Tim Keating, executive director of Rainforest Relief. “Originally palm oil was collected by hand, but once you get corporations involved, you end up having forest clearing and mass plantations.”

Right now palm oil is mostly used in food products, but if the demand for palm oil-based biodiesel increases, the oil palm business will certainly expand, creating more deforestation and species destruction.

Despite the huge environmental impact palm oil-based biodiesel has, businesses interested in making money see a market for it. Palm oil as a source for biofuel doesn’t integrate the huge environmental and social costs of its large-scale plantations, and so it can be sold at bargain prices to rich countries. But for the local communities who are left deprived of their present and future, the biofuel has a huge cost.

Article based on: “Malaysia to increase bio-fuel use”, BBC News,; “Using palm oil to make biodiesel may cause more trouble than it prevents”, Sarah Parsons, Plenty Magazine – November 14, 2006, disseminated by Indonesian Nature Conservation, E-mail:

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