The Effects of Palm Oil Biodiesel in Producer Developing Countries: A Case Analysis of Malaysia Linking National Perspectives with Ground Realities

Sammanfattning: The growing economic risk of relying primarily on fossil fuels with unstable prices and which availability highly depends on limited reserves and poor global distribution has increased the international interest on modern biofuels as an alternative energy source. Moreover, the growing awareness of energy-related pollution and of climate change consequences, and the international and national strategies to comply with Kyoto Protocol, has put biofuels on the global agenda. This interest has created a new market opportunity especially for developing countries in the tropics, where the production of biofuels and their feedstock can be very lucrative and contribute to the sustainable achievement of Millennium Development Goals (MDGs), in this case particularly MDG 1(poverty eradication) and MDG 7 (environmental sustainability). A clear example of a developing country engaging seriously and at a large scale in biofuels development is Malaysia, the current leading global palm oil producer. Malaysia has started an extensive biodiesel program and has committed to expand palm oil production and set aside almost 40% of it for biodiesel. However, there are both environmental and developmental risks related to upstream impacts in that country that should be better understood and considered if the development of biodiesel as a means to contribute to meet the objectives of sustainable development is to be ensured. Through a stakeholder analysis, this study seeks to understand how key actors related to biodiesel and sustainable development at the national level perceive the future development of biodiesel and the related key issues and benefits for Malaysia, and to juxtapose these views with activities and ?realities? on the ground. At ground level this study assesses three case studies in the State of Sarawak ?Borneo Island, East Malaysia ? where palm oil plantations are currently expanding. The ground level analysis focuses on the effects of palm oil plantations development on the rural development objectives of this State and on the sustainability of local livelihoods. The study concludes that although at national level the development of biodiesel and expansion of its feedstock production is an attractive opportunity, at local level this development involves significant trade-offs. While a clear potential for socio-economic benefits contributing to MDG 1 exist, there is a number of negative externalities that put at risk the local environmental sustainability (MDG 7) and also jeopardize the sustainability of local livelihoods by affecting native communities? ability to fulfill their subsistence needs, thus making them more vulnerable by weakening their risk minimization strategies for self-sufficiency. Finally, this study suggests possible principles and strategies for further research that could enhance the contribution of palm oil plantations and biodiesel development to local socio-economic development (MDG 1) and minimize local environmental degradation (MDG 7) and sustainable livelihoods erosion