Certification for confidence in biofuels

There is undoubtedly an urgency to move quickly towards reduced emissions if we are to reduce the catastrophic consequences of climate change. Renewable energy is clearly needed in the transition from dirty energy to clean energy but as this report from Stanford University shows, it will take an enormous effort and strong commitments from industrialized countries to break away from the cheap but toxic convenience of fossil fuels.

Coal has long been identified as one of the worst, not just for its impact on the health of producing communities but globally. Major industrialized countries including Germany and Japan which are heavily dependent on coal to power their economies have recognized this fact and share a common reluctance to use nuclear energy. The difference between the two heavyweights is now emerging as Germany, which relies on coal energy to back up its renewable energy program has recently declared that it will phase out coal by 2038.

Japan on the other hand is still struggling with the issue of coal even as it reconsiders powering up its risky nuclear plants. In a reported return to coal or its energy needs, the country is risking its commitments to the Paris Agreement. Unlike Germany which has a back up plan from tapping into energy sources from its neighbouring countries, Japan is physically isolated and therefore must rely on its own production for energy but can it get away from coal? Japan’s Environment Minister, Yoshiaki Harada, has stated that his office is opposed to coal power “in principle.” This has been enough for the energy sector to look at making a quick shift from coal to renewable energy, including biomass.

An increase in the import of biomass in recent years indicates that Japan is looking towards this energy source to find a solution for clean energy. As biomass imports rise, the bioenergy market in Japan is being wooed by renewable energy companies who have recognized the huge market potential for clean energy.

A comprehensive report published by the Renewable Energy Institute of Japan shows a spike in the import of wood chips from Canada between 2016 and 2017 to feed biomass energy. The same report also shows a spike in the import of palm oil kernels shells (PKS) in the same time period but that appears to be tapering off.

Palm oil and palm oil wastes like PKS are an obvious solution to Japan’s need for biomass supply. Both are readily available from its Southeast Asian neighbors, Malaysia and Indonesia, which produce 85% of the global supply for palm oil. The first palm oil powered energy plant was built in 2017 by Sankei Energy which claimed solid economic and ecological factors for its decision to run on palm oil. But while palm oil wastes maybe readily available and the palm oil powered energy plant can produce more energy using less land in Japan, the environmental concerns of the EU on palm oil’s impact has been noted among Japanese consumers who are now similarly questioning its use.

What the Japanese consumers may have missed is the fact that all palm oil imported into the EU for use in the biofuels sector is certified by a global leader in certifying deforestation free products; the International Sustainability and Carbon Certification (ISCC).

In its aspirations to become a globally accepted certification scheme as a supply source for sustainable feedstock for biofuels, the Malaysian Sustainable Palm Oil (MSPO) scheme collaborated with the ISCC to compare both certification schemes. This may not be the fairest of comparisons as the ISCC certifies the “best of” operations while the MSPO as a national scheme has to be completely inclusive.

Nevertheless, the MSPO will be working towards closing the gap between the two certification systems in order to harmonize the environmental requirements of biofuels markets. In its upcoming review of the MSPO Standards.

In the meantime, some Malaysian sources of palm oil as a sustainable feedstock for biofuels are applying both standards to their operations. A prime example of this is in Sarawak Oil Palm Berhad, which is based in Sarawak. Since 2016, the company has been undergoing certification processes by both the MSPO and the ISCC.

Established in 1968 as a joint-venture between the Center for Development from the UK and Sarawak state to initiate a palm oil industry in the state, the initial land bank of 4600 hectares has grown to more than 120,000 hectares in 2019.

In pursuing the certification of its operations as sustainable, the first certificate was issued by the MSPO in 2015. Since then, it has taken strides to complete certification of its operations under the MSPO scheme in tandem with the ISCC. As a result of its commitment to sustainable production, a No Deforestation, No Peat and No Exploitation (NDPE) policy was adopted and a dashboard was published in February 2019 to complete transparency and traceability. 

We visited two locations on separate occasions to see first-hand, what certification has meant to Sarawak Oil Palm. These were the Lambir Hills estate and palm oil mill and the Tinbarap mill where the review of the operations went from mill operations to the collection of Fresh Fruit Bunches from smallholders that are part of its supply chain. Both locations were impressive in how closely they monitored every aspect of their operations.

In a presentation that is made to visitors, the concluding statement from Sarawak Oil Palm Bhd was that:

“Before certification, oil palm industry players focus mainly on operational and economic efficiency and were sometimes clueless on the effects of their operations on the environment and surrounding communities. However Certified companies have almost immediate tangible benefits, although, in the long term, it is about demonstrating responsible corporate citizenship.”

The progress that Sarawak Palm Oil has made in the last two years is remarkable. The company has been able to meet the standards as set by the MSPO and ISCC which explains why it is so close to 100% certification of its operations. To complete the traceability of its supply chain, detailed data collection went as far down the supply chain as the logging in of every delivery from smallholders. This shows that it is able to trace every Fresh Fruit Bunch to the individual farmer, which is no small feat.

Company owned collection centres for Fresh Fruit Bunches are popular with smallholders as the company offers a premium price as part of its program to support local communities. According to Sarawak Oil Palm, all that remains to achieve 100% certification is one last mill plus smallholder certifications which is the task of the Malaysian Palm Oil Board.

Of key relevance to the issue of sustainability in biofuels is the ISCC certification of its biodiesel plant which produces the B100 quality for blending with conventional diesel. The double certification under both the MSPO and ISCC may seem excessive to some but they serve well to provide the ultimate assurance of quality to potential buyers of Sarawak Oil Palm’s products.