Palm Oil Biofuel: Its Sustainability, Direct and Indirect Land Use Effects

Yew Foong-Kheong*, Kalyana Sundram and Yusof Basiron
Address: Malaysian Palm Oil Council, 2nd Floor, Wisma Sawit, Lot 6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor D.E., Malaysia
* Corresponding author: email address:


Fossil fuel usage is a leading cause of GHG emission. Its replacement by biofuels is, thus, expected to result in benefits to the environment in terms of lesser pollution and better long term sustainability with regard to climate change. While earlier views of biofuel sustainability were centered on the effects of the combustion of the fuel on the environment per se, it was soon realized that GHG emissions also arise during the cultivation of biofuel crops and their subsequent production to biofuels. Such direct land use GHG emissions can be large and may negate the expected GHG emission reduction by using biofuels. Particularly, for biofuel crops that have been used, traditionally, to produce food, the channeling away from food usage to biofuel use, necessitates new land to be cleared  for planting food crops to meet the shortfall in crop production. The loss of carbon stock from these new areas gives rise to more GHG emissions, resulting in negative indirect land use change (ILUC) impacts.


Present day biofuel programmes are mainly supported by first generation biofuels.  Palm oil is in this basket, along with popular ones such as corn, rapeseed, soya and sugarcane. From a sustainability perspective, biofuels offer both advantages and risks. The advantages are energy security, GHG reductions and reduced air pollution. The risks are related to intensive use of resources, monocultures, reduced biodiversity and higher GHG emissions through direct and indirect land use change effects.

Very often, sustainability is viewed myopically from just the aspect of the environmental angle. FAO opines that measuring biofuel sustainability must be carried out in a more holistic approach of looking at environment, economic and social sustainability.

Malaysian palm oil biofuel is able to fulfill this holistic approach of sustainability evaluation. LCA results show that palm biofuel has a LCA GHG emission reduction, without methane capture, relative to fossil fuel of 60%.  This is comparable to soya (67%), rapeseed (61%) and sunflower (51%). All of them exceed the 35% GHG emission savings threshold value of EU Directive and, thus, qualify to be considered as sustainable sources of biofuels for EU.

Among them, palm oil biofuel is the only biofuel which can improve the carbon emission reduction further. The largest amount of GHG emission, contributing to 52% of the total LCA GHG emission, is attributed to methane emission from the ponds at the palm oil mills. The Malaysian government has an ongoing initiative to encourage palm oil millers to trap the gas and convert it into renewable energy. When methane is trapped in the palm oil mills, palm oil biodiesel, then, has a LCA GHG emission reduction savings relative to fossil fuel of 80%.

As to the economic and social aspects of sustainability, Malaysian palm oil industry has contributed significantly to the Malaysian economy by providing good returns to the palm oil companies and Malaysian Government. Importantly, it has uplifted the livelihood of the rural communities, with 40% of palm oil production coming from small farmers in the country.

Palm Waste

Cultivation of crops needs land resource. Some loss of carbon stock resulting from land clearing with resultant GHG emission is, thus, inevitable. On a global scale, in 2012, oil palm was planted on 14.2 million hectares or 0.29% of world’s total agriculture land. The other oilseed crops which have potential to be made into biofuels occupied another 4.96% of world’s total agriculture land.  Livestock production utilized 70% of the world’s agricultural land area. It is, thus, seen that the direct land use effect from oil palm industry, on a global scale, is minuscule relative to other forms of agricultural land use.

There is no general consensus on which are the best models to predict ILUC impacts. In spite of the uncertain predictive value of the models, US Environmental Protection Agency has already included ILUC into the evaluation and EU is on her heels to do so.

For palm oil biofuel, there is the concern that its use may drive new plantings into high carbon stock areas, including peat soils and areas with high biodiversity. Established palm oil sustainability certification systems, such as Roundtable Sustainable Palm Oil (RSPO) and International Sustainability and Carbon Certification (ISCC) systems as well as newer national systems such as Malaysian Sustainable Palm Oil (MSPO) and Indonesian Sustainable Palm Oil (ISPO) Schemes do take cognizance of such actions.

On an area basis, oil palm is the highest yielding oilseed biofuel crops. Being a perennial crop, it has a much higher land productivity than the common annuals such as rapeseed, sunflower and soya.  It yields 7 times more than rapeseed, 10 times more than sunflower and 11 times more than soya per hectare annually.

In 2012, 11.542 million tonnes of rapeseed oil were channeled from use from food to biofuel production in EU-27. If palm oil was to substitute the whole of the rapeseed oil for biofuel, this would divert 11.542 million tonnes of rapeseed oil back for use as food. However, this would siphon away 11.542 million tonnes of palm oil away from the food market. The ILUC effect is that  a new area of 3.14 million hectares is needed to plant oil palm to replace the loss. To plant rapeseed, 19.9 million hectares of new land need to be found. Thus if palm oil biofuel  substitutes rapeseed biofuel, the net result is a savings of 16.76 million hectares of new land which can be used for other purposes, including to produce more food.

In reality, when palm oil substitutes rapeseed for biofuel use in EU, 16.76 million hectares of forested area are saved from deforestation with concomitant carbon stock loss and GHG emission. This concept of “avoided deforestation” when a biofuel crop with high land productivity is chosen to replace a biofuel crop with a lower land productivity must be taken into the calculation of ILUC since arable land is getting scarcer with time. 

Another big advantage of palm oil over the other biofuels is the large amount of biomass produced by oil palm. The ratio of palm oil : biomass produced is 1: 9. The large amounts of oil palm biomass waste generated have great potential to be made into second generation biofuels with minimal or zero ILUC effects.  Research is being intensified.

A single biofuel that satisfies all  aspects  of sustainability completely does not exist. Based on available information, among the first generation biofuels, palm oil biofuel has big advantages over other common biofuels that are derived from biofuel crops with low land productivities.

Presentation made at 7th Biofuels International Conference in Ghent , Belgium in September 2014