Nathanael Greene's Blog
NRDC and HECO agree on
biodiesel procurement policy
August 22, 2007
Posted by Nathanael Greene in Moving Beyond Oil , Solving Global
Warming
Tags: biodiesel, biofuels, HECO, palmoil, RSPO
Today, NRDC and Hawaiian Electric Company released the final version of
a biodiesel sustainability procurement policy. It's available on our
website and www.hawaiisenergyfuture.com. Ralph Cavanagh wrote a good
overview of the history of the policy, its scope, and its objectives.
This write up is available here. I'll summarize and quote a bit here,
but I high encourage folks to read Ralph's write up and the policy
itself.
It turns out that HECO is the electric industries largest user of
petroleum. (We generally use very little petroleum to make electricity
here in the US.) Early this year HECO came to NRDC seeking our guidance
on how they could start integrate biofuels into their mix in a
sustainable manner. To their credit, they realized that biofuels and
particularly biodiesel can either be good or bad for the environment
depending on where and how the crops used to be fuel are grown.
A draft of the policy was reviewed by a panel of academic experts and
released to the public for comments. And after a number of public
hearings, the comments were extensive. As a result, we made a lot of
changes--fixed oversights, removed ambiguities, clarified our focus,
and generally tightened things up.
From my perspective there are three critical features of the policy.
First it makes clear that biofuels can not be a panacea and must be
part of a comprehensive effort to promote efficient use of energy and a
diverse sustainable supply. Second, it makes sustainable local
production of biofuel feedstocks a priority for HECO and creates a
mechanism to support the development of these feedstocks. And third, it
commits HECO to only procuring palm oil that is certified by an
independent third party to meet and actually exceed the standards of
the Roundtable on Sustainable Palm Oil.
We spent a lot of time internally understanding the environmental
impacts associated with much of the palm oil production today and
debating the viability of any sustainability certification process. In
particular we wrestled with the near and long-term impacts of a new
demand for sustainable palm oil on the overall palm oil market. Clearly
to some degree, new demand for certified palm oil will displace
undifferentiated demand elsewhere into the market for palm oil, driving
up prices and leading to some new undifferentiated production. However,
if we cannot certify and differentiate demand, we cannot reward better
practices.
Ultimately (and this point is made in the policy), certification needs
to be coupled with international agreements that protect carbon and
biodiversity rich ecosystems. Only by effectively creating a wall
around the market for palm oil and all biomass, and simultaneously
driving and pulling the market towards the best practices can we hope
to achieve a completely sustainable market. In the meantime, the
financial success of the better operators provide both immediate
environmental improvements and the foundation for mandatory
sustainability standards.
Unless algae become a reality, biodiesel has a limited ability to scale
up and is unlikely to ever be economically competitive. (HECO will be
supporting work on algae and other biomass derived alternatives to
diesel.) Nevertheless the market for biodiesel is growing rapidly and
palm oil in particular represents the cutting edge of efforts to
certify the sustainability of a biofuel feedstock at least in Europe.
This combined with HECO ability to make financial commitments to
certification that most purchasers and their eagerness to adopt the
most aggressive standards offers a unique opportunity to move the ball
forward on feedstock certification and set a precedent with a US based
company.
There's still a lot of work to be done monitoring the policy. If HECO
decides that it can't get enough biodiesel that meets the policy or we
believe that some unforeseen impact needs to be addressed, we're both
committed to working together to keep the policy a live and workable
example for the world.
As Ralph points out "We have set a high bar and we challenge all
biodiesel users to insist on nothing less."
http://switchboard.nrdc.org/blogs/ngreene/nrdc_heco_agree_on_biodiesel_p.html