Most industrialised countries have committed to significantly decrease greenhouse gas (GHG) emissions as a response to the challenge of climate change. The EU, as an example, aims to decrease its
Most industrialised countries have committed to significantly decrease greenhouse gas (GHG) emissions as a response to the challenge of climate change. The EU, as an example, aims to decrease its GHG emissions by 20% from the level of 1990 by the year 2020. One means of attaining this goal is by increasing the share of transport biofuels to 10%. Thus, the markets of transport biofuels in the EU is expected to develop rapidly for the next 15 years. The European Commission has estimated that approximately 80% of the biofuels demand by 2020 can be produced within the Union and the rest will be imported.
Palm oil is becoming a more important raw material for transport biofuels. Compared to other oil plants cultivated in Europe, palm oil has several advantages such as remarkably higher annual oil yield and lower production costs. Along with the rapidly increasing interest on palm oil use for transport fuels, serious concern about the sustainability of palm oil production has also increased and has stirred up new debates. The increasing palm oil production can result to some negative impacts as destruction of forests, emergence of social problems and pollution of the environment. On the other hand, expanding of palm oil production increases the export revenues of palm oil-producing countries and creates new jobs in rural areas.
The global demand for palm oil is growing, thus prompting an increase in production in Malaysia and Indonesia. Such increasing demand for palm oil is due to palm oil’s relatively cheap price (compare to other vegetable oils) and versatile advantage both in edible and non-edible applications. The increasing demand for palm oil is also ascribed to the increasing demand for biofuel as an alternative source of energy particularly in Europe having a mandated biofuel utilisation target. The growth in palm oil consumption has resulted in palm oil dominating the current global oil market.