Bloomberg News

EPA Rejects Palm-Oil Based Biodiesel for Renewable Fuels Program

January 31, 2012

Jan. 27 (Bloomberg) -- The Environmental Protection Agency said that biodiesel made from palm oil doesn’t meet the requirements to be added to its renewable fuels program because its greenhouse-gas emissions are too high.

In a regulatory filing today, the EPA said that palm-oil biodiesel, which is primarily produced in countries such as Malaysia and Indonesia, provides reductions of as much as 17 percent in greenhouse-gas emissions compared to traditional diesel fuel, falling short of a 20 percent reduction necessary to qualify under the law.

By failing to meet that threshold, oil companies can’t use palm fuels to meet national renewable fuel standards. Other fuels they can use are made from soy beans, animal fat, recycled cooking grease or similar materials.

“Our goal is to continue to diversify the already strong portfolio of biodiesel feed stocks in the future, but we respect the EPA’s review process and will move forward accordingly,” Ben Evans, a spokesman for the National Biodiesel Board, said in an e-mail.

Environmental groups, which are locked in a fight with the EPA over its approval of corn-based ethanol under the same program, praised the decision as an important marker by the agency. Palm-oil production has led to the deforestation of 6.5 million hectares (16.1 million acres) in Malaysia and Indonesia, according to Friends of the Earth.

“A fuel that relies on deforestation for production is not a sustainable fuel at all,” Michael Rosenoer, biofuels campaign organizer for the group in Washington, said in a blog post today.

--Editors: Jon Morgan, Daniel Enoch

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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