Tuesday, August 21, 2007

HECO to require that suppliers of imported palm oil be audited

By HARRY EAGAR, Staff Writer

HONOLULU – The palm oil sustainability policy crafted for Hawaiian Electric Co. by the Natural Resources Defense Council says that in procuring imported palm oil for conversion to biodiesel, HECO will require that its suppliers and those in the supply chain be independently audited to ensure that they:

Comply fully with all principles and criteria of the Roundtable on Sustainable Palm Oil, an international organization of more than 200 members representing all aspects of the palm industry from native peoples to processors. The roundtable group was established five years ago to create a sustainable model of palm oil production.

Go beyond the roundtable group’s requirements to prohibit the conversion of any natural ecosystem for the cultivation of biofuel feedstocks.

Meet or exceed the roundtable group’s principles and criteria prior to the first shipment into Hawaii, not merely show good faith efforts to meet those standards (as was envisioned in the first draft).

Launch the independent Biofuels Public Trust Fund by early 2008 and include Native Hawaiian cultural practitioners among the constituencies represented on the board of directors. HECO will contribute all its share of profits from the BlueEarth biodiesel processing plant on Maui to the fund to support research and development to enhance Hawaii’s agricultural energy industry.

"Hawaiian Electric also made the commitment at the public meetings and in the final policy document to provide seed funding for agricultural research on biodiesel feedstock production in Hawaii," says Karl Stahlkopf, HECO senior vice president for energy solutions.

"This research funding will not have to wait for the creation of the Biofuels Public Trust Fund by early next year or the receipt of profits from the BlueEarth Maui biodiesel project."

That plant is scheduled to start producing fuel for MECO by mid 2009.

The policy does not endorse any specific biodiesel production facilities or power generation facilities in Hawaii.

However, Hawaiian Electric has several projects that will be subject to the new policy:

The company is committed to using 100 percent biofuel in its 110-megawatt peaking unit planned to be completed by 2009 in Campbell Industrial Park on Oahu.

A HECO subsidiary will partner with BlueEarth Biofuels LLC to build a facility on Maui to supply biodiesel to Maui Electric Co., which uses diesel for about 85 percent of its electric production.

In each case, the company will give preference to biofuels from locally grown feedstocks, using biodiesel from imported palm oil only until local biodiesel becomes available.

HECO says the final policy represents a major research, development and deployment effort to jump start local production of feedstocks for biodiesel fuel.

The eight components of the policy are: local feedstock support mechanisms; sourcing requirements for palm oil; baseline criteria for all feedstocks; chain-of-custody tracking for feedstocks and oils; global warming pollution accounting and reporting; establishment of a Biofuels Public Trust Fund; public review and notification; and public progress reporting.

The policy states: "NRDC and Hawaiian Electric recognize that voluntary certification is not a panacea.

There are limits to the effectiveness of voluntary certification in addressing the problems of today’s commodity market for palm oil, in particular, and vegetable oils in general.

"Certification must be coupled with international agreements that value and protect forests and other biologically and carbon-rich natural ecosystems.

"NRDC and HECO are working to support the adoption of such agreements and U.S. government support and participation in them.
"We hope that this model sends a powerful market signal and helps to create a foundation for the development and expansion of mandatory sustainability standards across the marketplace."

For more information, see "Environmental Policy for the Hawaiian Electric Co.’s Procurement of Biodiesel from Palm Oil and Locally Grown Feedstocks" at www.nrdc.org/energy or www.hawaiisenergyfuture.com. Also see Roundtable on Sustainable Palm Oil at www.rspo.org.

Harry Eagar can be reached at heagar@mauinews.com.

http://www.mauinews.com/news/2007/8/21/05heco0821.html