CDM is promoting sustainable palm oil
Guest commentary in Point Carbon Newsletter: CDM & JI Monitor 14 May 2008 by Soeren Varming, YTL-SV Carbon and Michael Dutschke BioCarbon

There has been much talk about whether palm oil production and the possible use of palm oil for biodiesel production benefits the environment (through displacing the use of carbon-intensive fossil fuels) or harms it.

This debate has dissuaded some buyers of CERs from looking at projects in the palm oil sector. But this reluctance is based on a lack of understanding of the positive contribution to sustainable development that CDM projects bring.

There has been criticism in relation to the use of palm oil for biodiesel claiming it will create a demand for more palm oil plantations and thus a threat of reducing the remaining tropical rain forest in countries like Malaysia and Indonesia. There might be some truth in this line of argument, but it is not the aim of this piece to discuss the wisdom of the biofuels policy in general or the use of palm oil as biofuel specifically.

However, the impending discussion on the use of biofuels has no links with the undeniable sustainable development benefits of CDM projects in the palm oil sector. To-date, there are no CDM projects involving the use of biofuels from palm oil.

All CDM projects in the palm oil sector are basically improving the waste management in existing palm oil activities and thus reducing the environmental impact of that sector, which is methane generated by rotting solid waste or from waste water treatment.

Palm oil mills have large amounts of organic waste products in the form of solid biomass and waste water.

The solid biomass is typically used as fuel in mill, but there is more biomass waste than needed for energy production, and a large fraction of the waste is dumped.
The Palm oil mill effluent is the organic rich waste water from the palm oil milling process and is typically treated in open anaerobic lagoons with high emissions of methane.

The typical CDM projects in the sector include:
Composting of the solid biomass and/or parts of the waste water to produce a higher quality of organic fertiliser than by applying the solid waste directly.
Production of biogas from the palm oil mill effluent.
Production of power from the solid waste and use of the electricity either in industries like palm oil refineries or sale of electricity to the grid. All these project types support the principles of Roundtable for Sustainable Palm Oil a consultative process including NGOs, palm producers, users of palm oil and investors.

Further to these specific benefits of the palm projects within the CDM, the whole CDM process is contributing to RSPO principles of transparency by requiring stakeholder meetings and annual publication of the monitoring reports of the projects.

Finally is it a requirement to be eligible for CDM that the palm oil mills are complying with the local environmental legislation. The impact of the financial incentive to get the CERs issued by the EB is usually much more compelling than enforcement by local authorities.

Working closely with the palm oil sector, it has been a strong encouragement to experience how the CDM has changed the attitude towards environmental projects and also to see how new and environmental friendly technologies are being implemented at a much larger pace than before.