Report: Finland’s push to use biofuel could cause ‘massive deforestation’

With the aviation industry looking to use more biofuels, a Norwegian NGO warns that Finland's legal loopholes on palm oil products could make the country a dumping ground for unsustainable raw materials.

File picture of rainforest clearances in Brazil / Credit: iStock

A new report by a Norwegian non-governmental organisation warns that Finland’s biofuel policies, if left unchanged, will likely contribute to massive deforestation.

The report by the Rainforest Foundation Norway RFN is called ‘Destination Deforestation’ and reviewed the role of the aviation industry in contributing to the climate crisis, concluding that there’s a high risk that increased use of palm and soy-based biofuel in planes will lead to increased deforestation.

Finland, the world’s largest producers of renewable diesel and the only EU country that gives additional incentives for the use of palm oil products to manufacture biofuel, could spearhead the race towards deforestation, as areas of rainforest in countries like Indonesia or in South America are cleared to plant crops that will later be used to produce the fuel.

RFN says that meeting the aviation industry’s own climate-change targets to reduce emissions could result in 3.2 million hectares of tropical forest lost, an area larger than Belgium.

Baby palm oil plants on a plantation / Credit: Neste

Finland’s policy disconnect over biofuel action 

Finland currently holds the six-month rotating Presidency of the European Council, and has used that role to call for concrete actions to halt biodiversity loss.

But there’s a disconnect: at the same time as urging action to stop biodiversity loss, the Finnish state is heavily incentivising the manufacture of biofuels from palm products grown in some of the planet’s worst deforestation hotspots.

Researchers at Rainforest Foundation Norway believe the Finnish incentives for PFAD-based biofuels are likely to contribute to this deforestation, since Finland’s state-owned oil company Neste produces half of the world’s renewable diesel.

“Finnish Government Program includes a target for 30% sustainable biofuels in air transport by 2030” says Nils Herman Ranum, the head of Rainforest Foundation Norway’s Drivers of Deforestation programme.

“Finland continues to treat the palm oil by-product PFAD as a waste, eligible for additional incentives. In addition, Finland is home to Neste, the world’s largest producer of hydrotreated biodiesel, and uses PFAD as a raw material. Therefore, Finland’s program could contribute to the massive deforestation discussed in our report” he explains.

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

Finland as the dumping ground for unsustainable raw material

With Finland left isolated as the only EU country to pay producers to use waste-classified PFAD in biofuel production, Rainforest Foundation Norway cautions that the country risks becoming a dumping ground for unsustainable raw materials.

Th organisation highlights the strong risk that the incentives for PFAD will increase its use in Finland significantly.

“Bearing in mind the fact that Finland is the only country where PFAD still qualifies for enhanced support under European policy as a waste product, we think there is a strong risk that the use of the raw materials will increase in Finland”

As long as PFAD is classified as ‘waste’, it enjoys huge incentives from the state. Biofuels made out of PFAD are completely exempt from carbon dioxide tax in Finland. Additionally, PFAD’s emissions can be discounted, and it is not subject to the same sustainability criteria as other raw materials.

Experts – and other European countries – take the view that PFAD should not be classified as waste, and note that the Finnish classification is increasingly at odds with the rest of Europe.

“It is our position that it is far from correct to market PFAD as being made of wastes. Rather, PFAD is a by-product of the palm oil production process. This is the position shared by Norway, France, the UK, Sweden, Italy, Austria, Denmark, Germany, and the Netherlands. In fact, the only country known to still classify PFAD as a residue is Finland” Ranum notes.

When the Finnish legislation is seen in combination with national biofuel quotes, and the fact that Finland is the home to Neste, the largest producer of hydrotreated biodiesel in the world, Rainforest Foundation Norway envisage that Finland will be an appealing market for PFAD-derived biofuels.

“Our report therefore considers that PFAD would be a dominant raw material for the Finnish biofuel market” Ranum concludes.

The exact amount of PFAD used in Finland is Neste’s trade secret protected by the law.

However, before the incentives were cut from PFAD in Sweden in June 2018, PFAD was an important raw material for renewable diesel, the most common biofuel in the country, with 46% share.

Ranum urges Finland to follow suit, and stop the flow of PFAD into the Finnish market.

“Finland should take urgent steps to exclude biofuels from the highest deforestation risk raw materials such as PFAD, palm oil and soy. They should also exclude or limit support for biofuels from food oils more generally.”

File picture of plane in flight / Credit: iStock

The cure worse than the disease

With ‘flight shame’ gaining more momentum across the world, the aviation industry is desperate to find ways to make flying compatible with climate goals.

The International Air Transport Association IATA has addressed this issue with ambitious goals to reduce CO2 emissions by 50% in 2050, while not limiting growth of the industry. Central to these ambitions is a near complete shift from conventional jet fuel to alternative aviation fuels, namely biofuels.

>While replacing fossil fuels with renewables sounds like a great idea, the sustainability of biofuels is highly dependent on the raw materials used to produce them, as shown by Rainforest Foundation Norway’s new report.

The most common aviation biofuels, HEFA fuels, are produced from vegetable oils and animal fats. While the use of waste oils and other recycled materials is possible, the most viable raw materials for HEFA jet fuels are food crops.

“The cheapest and most readily available raw materials for HEFA jet fuel are palm oil and soy oil, which are closely linked to tropical deforestation” Ranum says.

The experts suggest that aiming to reduce emissions by increasing demand for palm and soy oil is a cure worse than the disease.

“Using PFAD for biodiesel will indirectly increase demand for palm oil and other vegetable oils, which drives deforestation and peatland destruction” says Ranum.

“When those indirect impacts are considered, PFAD-based biofuel is likely to also be worse for the climate than fossil diesel”

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