Investigation: Neste biofuel link to orangutan habitat destruction

Finland's state-owned oil company continues to buy palm oil from mills near where large areas of rainforest have been cleared, and vital primate habitat destroyed.

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A female orangutan and her son in Borneo / Credit: iStock

A damning new report has found widespread destruction of orangutan habitats around palm mills in Indonesia – and four of the worst sites are part of Neste‘s biofuel supply chain.

MapHubs, an open-source tech company monitoring natural resources, identified orangutan habitat loss around 115 different palm mills in Indonesia where trees had been cleared and other vegetation destroyed.

Of the ten worst instances, four mills can be found in the supply chain for Finnish state-owned oil company Neste, who uses their palm products to manufacture biofuels.

Although there is no proven link between the mills in Neste’s supply chain and the nearby orangutan habitat destruction, the widespread deforestation is a warning sign the mills could be getting palm fruits sourced from adjacent illegal plantations.

Neste tells News Now Finland “we are investigating the findings of the report. We will get back as soon as we know more of the issue.”

“We are committed to preventing deforestation in our supply chains and require the same from all our raw material suppliers” the company adds.

While Neste is still looking into the report, other global brands like Nestlé, the world’s largest food and beverage company, and British personal care and consumer products manufacturer PZ Cussons have already taken action to suspend trading or stop buying completely from several mills identified in the MapHubs deforestation study.

Over the past year Neste has struggled to maintain the sustainability of its Indonesian suppliers, despite claiming their palm oil has been “fully traceable to the plantation level” for more than a decade. In June 2018 five other mills in Neste’s supply chain were caught in illegal rainforest harvests.

Finland is the largest producer of renewable diesel in the world, but also one of the last countries to subsidize the use of palm oil products in biofuels.

Orangutan in the trees in Borneo / Credit: iStock

Orangutans habitat loss makes them critically endangered

Indonesia is one of the richest nations in terms of biodiversity, and the only country where you can find bears, elephants, rhinos and tigers in the same forest.

Despite being home to a large number of critically endangered species, Indonesia is also one of the worst deforestation hotspots on the planet, and habitat degradation is the largest driver of wildlife extinction in that country.

Between 2000 to 2012, Indonesia lost more than 60,000 sq km of virgin forest, an area equivalent to roughly six times the size of Uusimaa region in southern Finland.

Orangutans – the name means ‘man of the forest’ in Malay – have been particularly hard hit by the destruction of the forests where they make nests to sleep at night or rest during the day, drink water that collects in holes in the trees, and eat fruits like figs and lychees.

“Females give birth to one infant at a time about every 3-5 years, so these species can take a long time to recover from population declines. With human pressure only increasing, orangutans face an increasing risk of extinction” says WWF, listing the primates as “critically endangered” in Sumatra, where two of the Neste supply chain mills identified in the MapHubs deforestation report are located.

When the illegal plantation owners clear the forest around the palm oil mills with chainsaws, the slow-moving orangutans can’t easily escape, and those that survive the initial deforestation find their entire life support ecosystem has been destroyed.

Baby palm oil plants on a plantation / Credit: Neste

Global demand fuels palm oil plantations 

The growing global demand for cheap vegetable oil is fueling the expansion of palm oil plantations in the Southeast Asian nation, where the production of palm oil has more than quadrupled in the last two decades.

MapHubs, using the University of Maryland GLAD Forest Alerts, combined with palm oil concession data, clearly shows how extensive the orangutan habitat loss is.

The June report shows 115 mills in Indonesia had at least one hectare of forest cleared within 25km of the mill; and 50 mills had more than 10 hectares destroyed in June.

Of the top ten palm mills identified by MapHubs with the highest orangutan habitat loss for June, News Now Finland found that four are suppliers for Neste.

Neste’s own online Palm Oil Dashboard, which includes the exact coordinates of all of its palm supplier mills, reveals the company sourced a palm product called PFAD, used in the manufacture of biofuels, from Etam Bersama Lestari, Bumi Pratama Khatulistiwa and Perkebunan Dan Pertanian Pati Sari (all owned by Wilmar International); and Samudera Sawit Nabati (owned by Belawan Refinery and ultimately Singapore’s Golden Agri-Resources).

The four mills had a combined loss of 124 hectares of orangutan habitat in their proximity for the month of June alone – an area equivalent to the size of 174 football pitches.

File picture of illegal palm fruit plantation inside Tesso Nilo National Park, January 2015 / Credit: Eyes on the Forest

Neste’s struggle to guarantee sustainability

It is not the first time this year Neste’s green image has faced challenges, as it struggles to maintain the sustainability of its suppliers in Indonesia.

In January 2019, our investigation revealed how another five of Neste’s palm oil suppliers were caught in illegal rainforest harvests inside the Tesso Nilo National Park in Central Sumatra, one of the last safe havens to endangered Sumatran tigers and elephants.

Similar to the MapHubs findings, the Eyes on the Forest environmental group showed how seemingly sustainable palm oil mills secretly sourced some of their palm fruits from illegal plantations hidden inside the surrounding forests.

Despite promises to reduce dependence on the Southeast Asian palm oil industry, Indonesian palm products still end up in Finnish biofuel through legal loopholes.

Renewable diesel, the most common biofuel in the Nordics, is marketed with claims of lowered emissions and cleaner burning and can be produced from a wide selection of different raw materials, including industrial waste.

Another News Now Finland investigation in February this year highlighted how a large part of that ‘waste’ is actually palm oil by-products.

Finland, the largest producer of renewable diesel in the world, is one of the last countries where by-products of the palm oil production, such as PFAD, are classified as ‘waste’, which is heavily subsidised by the Finnish government.

Neste products enjoy huge tax breaks, and waste classification also allows for the emissions produced in the manufacture of the raw material to be ignored in emissions statistics.

Acknowledging the deforestation threat associated with the palm oil production, France, Great-Britain, Sweden, and Norway have already cut the subsidies from palm oil by-products.

Finland has yet to do the same.

A male orangutan eats fruits from the forest in Borneo / Credit: iStock