NCPA - National Center for Policy Analysis


November 28, 2005

The drive for "green energy" in the developed world is having the perverse effect of encouraging the destruction of tropical rainforests. From the orangutan reserves of Borneo to the Brazilian Amazon, virgin forest is being razed to grow palm oil and soybeans to fuel cars and power stations in Europe and North America. And surging prices are likely to accelerate the destruction, says author Fred Pearce.

  • The rush to make energy from vegetable oils is being driven in part by European Union laws requiring conventional fuels to be blended with biofuels and by subsidies equivalent to 20 pence a liter.
  • Last week, the British government announced a target for biofuels to make up 5 percent of transport fuels by 2010; the aim is to help meet Kyoto protocol targets for reducing greenhouse-gas emissions.
  • Rising demand for green energy has led to a surge in the international price of palm oil, with potentially damaging consequences.

"The expansion of palm oil production is one of the leading causes of rainforest destruction in south-east Asia. It is one of the most environmentally damaging commodities on the planet," says Simon Counsell, director of the UK-based Rainforest Foundation. "Once again it appears we are trying to solve our environmental problems by dumping them in developing countries, where they have devastating effects on local people."

Until recently, Europe's small market in biofuels was dominated by home-grown rapeseed (canola) oil. But surging demand from the food market has raised the price of rapeseed oil too. This has led fuel manufacturers to opt for palm and soya oil instead. Palm oil prices jumped 10 percent in September alone, and are predicted to rise 20 percent next year, while global demand for biofuels is now rising at 25 percent a year.

Source: Fred Pearce, "Forests paying the price for biofuels," New Scientist, Issue 2526, November 22, 2005.

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