Biofuel rush risks gasoline hike
Burning biofuels belches out fewer greenhouse gases than conventional fossil fuels because the plants they are derived from absorbed those same gases in the first place. The hitch is that the explosion in capacity taps sources like Indonesia and Brazil, where new palm oil and sugar plantations could threaten rainforests. Burning them would more than wipe out any climate change advantage. Malaysia is due to start selling a 5% palm oil-diesel blend at domestic pumps in October, while Indonesia -- which plans to open six million hectares to biofuel plantations -- has set a 10% biofuels target by 2010. The difficulty for refiners is matching these targets without harming the environment through deforestation. "Because we do have operations in markets that are interested in putting in place palm oil mandates we are taking a close look at implications," said Messem. Neither Shell nor BP currently blend palm oil. The fear among green groups is that if they start, in wilder forest outbacks producers could hoodwink the refiners' checks. "We've seen the rate of deforestation in the Amazon," said leading environmental campaigner George Monbiot. "Who's to stop them from clearing land for palm oil? Who's going to blow the whistle?" It is a problem the oil industry says it is taking seriously. "It's very difficult for us to police and enforce compliance with national law," Messen said. "We work closely with our suppliers to try and make sure those standards are adhered to." The European Commission is considering some form of environmental reporting to put the spotlight on an expected palm oil import surge into the EU. "The Commission is reviewing its biofuels directive and among the possible proposals we are indeed considering the use of origin certificates," a spokesman said. (today.reuters.com)
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