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In the Netherlands Palm oil is the biofuel of choice, compared to corn here. So much so that they even built some electricity generation plants for palm oil use. It is seemingly a perfect environmental fit, as the plant grows it absorbs CO2, as it is burned it releases the CO2 it absorbed during its life-cycle. A carbon neutral fuel that is plentiful and cheap. What's not to love.

According to a New York Times article by Elisabeth Rosenthal dated January 31st, lots:

Spurred by government subsidies, energy companies became so enthusiastic that they designed generators that ran exclusively on the [palm] oil, which in theory would be cleaner than fossil fuels like coal because it is derived from plants.

But last year, when scientists studied practices at palm plantations in Indonesia and Malaysia, this green fairy tale began to look more like an environmental nightmare.

Rising demand for palm oil in Europe brought about the clearing of huge tracts of Southeast Asian rainforest and the overuse of chemical fertilizer there.

Worse still, the scientists said, space for the expanding palm plantations was often created by draining and burning peatland, which sent huge amounts of carbon emissions into the atmosphere.

As you can imagine, this is causing a wee bit of a re-think on some subsidies and policies:

As a result, politicians in many countries are rethinking the billions of dollars in subsidies that have indiscriminately supported the spread of all of these supposedly eco-friendly fuels for vehicles and factories. The 2003 European Union Biofuels Directive, which demands that all member states aim to have 5.75 percent of transportation run by biofuel in 2010, is now under review...

In the Netherlands, the data from Indonesia has provoked soul-searching, and helped prompt the government to suspend palm oil subsidies. The Netherlands, a leader in green energy, is now leading the effort to distinguish which biofuels are truly environmentally sound.

The government, environmental groups and some of the Netherlands’ “green energy” companies are trying to develop programs to trace the origins of imported palm oil, to certify which operations produce the oil in a responsible manner...

Beyond that, the group suggests that all emissions arising from the production of a biofuel be counted as emissions in the country where the fuel is actually used, providing a clearer accounting of environmental costs.

I offer this article neither to praise nor bury biofuels. But rather as a warning: now that Canada seems intent on running headlong into environmental activism, we need to be very careful which policies we support, and how implementation of these plans are done. We need to be sure we aren't just off loading our carbon releases to other jurisdictions.