Tuesday, 24 April 2012


           Data used by Environmental Protection Agency (EPA) of the United States concerning oil palm which did not meet biodiesel specifications because it only reduces carbon emission by 17%. EPA requires emission reduction of up to 20%. According to calculation of Indonesian Palm Oil Board (DMSI) it is because the data used is the wrong one. We have brought our data there and they are studying it. On April 28 they will give a response, Derom Bangun, Chairman of DMSI, total Business News.

            The most fatal calculation is about peatland. EPA uses result of research stating that carbon emission of peatland is 95 Mg CO2 equivalent/hectare/year. From tens of researches on peatland emission, only tow persons who stated such a large amount of emission.

        Based on research of Palm Oil Research Center, researches of various national and international universities, DMSI concluded that carbon emission of peatland only reaches 38 MG CO2 equivalent/hectare/year. With DMSI’s data, reduction of oil palm biodiesel in the United States.

             Peatland which is converted to oil palm estate, according to EPA’s data, by 2020 will reach 13% of size of peatland area. While, based on DMSI’s calculation, the maximum conversion allowed is only 9.5%. Opening oil palm estate on peatland is very expensive. In addition to that, production is not as high as on mineral land.

            With only 9.5% of peatland converted to oil palm estate, reduction of oil palm carbon emission reaches 22%, or above EPA standards.

            EPA also calculates that the economic period of use of peatland for oil palm estate is 30 years, while in fact, with many existing weaknesses, including durability of peatland to support oil palm tress, the maximum economic age of oil palm is only 25 years at the maximum.

            EPA also assumes that conversion of forest to oil palm estate will reach 43%. This happens because EPA uses landsat satellite data which only reported that the area is covered by plants and defined as forests. While, in fact, such areas could be rubber plantation or dormant land.

          EPA did not consider that the Indonesian government through moratorium policy has prohibited the opening of primary and peatland forest for oil palm plantation. Therefore, DMSI calculates that land conversion only reaches 26%. With 26% conversion rate, emission reduction reaches 20%.

            Concerning methane which is captured and not released into the air, according to EPA calculation, will only reach 5.5% up to 2020. While, in fact, the data used by EPA is last year’s data. The data used by EPA is data on oil palm factories that do not participate in carbon trade mechanism, while in fact, there are many who captured merhane but are not participating in carbon trade as the revenue is low, but the spending is high.

            According to DMSI, around 60% of oil palm factories will capture methane in 2020. The stimulating factor is Resources which allows the State Electricity Company (PLN) to buy electricity from biomass generator at a price of Rp 975/kwh.

            It is electricity buying that stimulates the businesses to use wastes for power generation so they did not release methane into the air, he said.

            If 60% capture methane, oil palm carbon emission reaches 26%. In general, oil palm does not meet the requirements to be used as biodiesel raw material in the United States in 2020. The problem is whether or not they could accept our argument. Various kinds of attempts have been made to protect their products from competition with palm oil, he said. 

Business News - April 9, 2012

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