Industrial development of the African countries

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to environmental degradation, including four percent of global greenhouse gas emissions and eight percent of all global emissions caused annually by burning fossil fuels, due to the large areas of rainforest that are cleared to make way for palm oil plantations. The pollution is exacerbated because many rainforests in Indonesia and Malaysia lie atop peat bogs that store great quantities of carbon that are released when the forests are cut down and the bogs drained to make way for the palm oil plantations.

NGOs have accused the growth of new palm oil plantations as also being responsible for peat forest destruction in Indonesia and for accelerating global warming. Greenpeace concluded that many food and cosmetics companies, including ADM, Unilever, Cargill, Proctor & Gamble, Nestle, Kraft and Burger King, are driving the demand for new palm oil supplies, partly for products that contain non-hydrogenated solid vegetable fats, as consumers now demand fewer hydrogenated oils in food products that were previously high in trans fat content. Friends of the Earth have concluded that the increase in demand comes from biofuel, with producers now looking to use palm as a source.

Environmental groups such as Greenpeace claim that the deforestation caused by making way for oil palm plantations is far more damaging for the climate than the benefits gained by switching to biofuel. The world's centres for oil palm production are Indonesia and Malaysia where rapid deforestation and the drying out of asssociated peatlands are, Greenpeace claim, releasing huge amounts of carbon dioxide into the atmosphere and thereby speeding climate change.Greenpeace identified Indonesian peatlands, unique tropical forests whose dense soil can be burned to release carbon emissions, that are being destroyed to make way for palm oil plantations. They represent massive carbon sinks, and they claim their destruction already accounts for four percent of annual global emissions. Greenpeace recorded peatland destruction in the Indonesian province of Riau on the island of Sumatra, home to 25 percent of Indonesia's palm oil plantations. There are plans to expand the area under concession by more than 11,000 square miles, which would deforest half of the province. They claim this would have devastating consequences for Riau's peatlands, which have already been degraded by industrial development and store a massive 14.6 billion tons of carbon, roughly one year's greenhouse gas emissions.

Research conducted by Greenpeace through its Forest Defenders Camp in Riau documents how a major Indonesian palm oil producer is engaging in the large-scale, illegal destruction of peatland in flagrant violation of an Indonesian presidential order, as well as national forestry regulations. Palm oil from peatland is fed into the supply chain for global brands. They accuse major multinational companies of turning a blind eye to peatland destruction to supply cheap vegetable oil. FoE and Greenpeace both calculate that forests and peatlands that are replaced as palm oil plantations release more carbon dioxide than is saved by burning biofuels in place of diesel.

In Africa, the situation is very different compared to Indonesia or Malaysia. In its Human Development Report 2007-2008, the United Nations Development Program says production of palm oil in West-Africa is largely sustainable, mainly because it is undertaken on a smallholder level. The United Nations Food and Agriculture program is encouraging small farmers across Africa to grow palm oil, because the crop offers opportunities to improve livelihoods and incomes for the poor.

Environmentalists and conservationists have been called upon to become palm oil farmers themselves, so they can use the profits to invest in their cause. It has been suggested that this a more productive strategy than the current confrontational approach that threatens the livelihoods of millions of smallholders.

Many of the major companies in the vegetable oil economy participate in the Roundtable on Sustainable Palm Oil which is trying to address this problem. Meanwhile, much of the recent investment in new palm plantations for biofuel has been part-funded through carbon credit projects through the Clean Development Mechanism; however the reputational risk associated with unsustainable palm plantations in Indonesia has now made many funds wary of investing there.

4. Biofuels and bioproducts.


Palm oil, like other vegetable oils, can be used to create biodiesel for internal combustion engines. Biodiesel has been promoted as a form of biomass that can be used as a renewable energy source to reduce net emissions of carbon dioxide into the atmosphere. Therefore, biodiesel is seen as a way to decrease the impact of the greenhouse effect and as a way of diversifying energy supplies to assist national energy security plans. Scientists have found that biodiesel made from palm oil grown on sustainable non-forest land and from established plantations can effectively reduce greenhouse gas emissions.

However, NGOs such as Greenpeace have concluded that the current "first generation" biodiesel extracted from new palm oil plantations may not be a genuine counter to global warming. If forests are cleared for palm plantations, and the wood is not used for bioenergy but burned, it may take decades before biodiesel from palm oil reduces as much carbon dioxide as the pristine forests originally sequestered in the form of carbon. However, if the wood is used for the production of bioenergy, the palm plantations as well as the biodiesel from palm oil starts to sequester and reduce greenhouse gas emissions from the first year onwards.

Although palm oil has a comparatively high yield, the problems that organisations such as Greenpeace have linked to palm cultivation on newly-cleared plantations have encouraged research into alternative vegetable fuel oil sources with less potential for environmental damage, such as jatropha. Although palm requires less manual labor to harvest a given amount of oil than jatropha, the latter grows well in more marginal areas and requires less water.

Other scientists and companies are going beyond merely using the oil from oil palm trees, and are proposing to convert the entire biomass harvested from a palm plantation into renewable electricity, cellulosic ethanol, biogas, biohydrogen and bioplastic. Thus, by using both the biomass from the plantation as well as the processing residues from palm oil production (fibers, kernel shells, palm oil mill effluent), bioenergy from palm plantations can have an effect on reducing greenhouse gas emissions. Examples of these production techniques have been registered as projects under the Kyoto Protocol's Clean Development Mechanism.

By using all the biomass residues from palm oil processing for renewable energy, fuels and biodegradable products, both the energy balance and the greenhouse gas emissions balance for biodiesel from palm oil is improved. For each tonne of crude palm oil (CPO) produced from fresh fruit bunches, the following residues, which can all be used for the manufacture of biofuels, bioenergy and bioproducts, become available: around 6 tonnes of waste palm fronds, 1 ton of palm trunks, 5 tons of empty fruit bunches (EFB), 1 ton of press fiber (from the mesocarp of the fruit), half a ton of palm kernel endocarp, 250kg of palm kernel press cake, and 100 tonnes of palm oil mill effluent (POME). In short, a palm plantation has the potential to yield a very large amount of biomass that can be used for the production of renewable products.

However, regardless of these new innovations, first generation biodiesel production from palm oil is still in demand globally and will continue to increase. Palm oil is also a primary substitute for rapeseed oil in Europe, which too is experiencing high levels of demand for biodiesel purposes. Palm oil producers are investing heavily in the refineries needed for biodiesel. In Malaysia companies have been merging, buying others out and forming alliances in order to obtain the economies of scale needed to handle the high costs caused by increased feedstock prices. New refineries are being built across Asia and Europe.


5. Regional production.


5.1. Malaysia.


In 2004, Malaysia produced 14 million tons of palm oil from more than 38,000 square kilometres of land, making it the largest exporter of palm oil in the world. The majority of its crops goes towards its traditional markets for personal hygiene and food use. The Malaysian Sime Darby conglomerate is its largest plantation operator, with 524,626 hectares of oil palms, mainly across Peninsular Malaysia, Sarawak and Sabah in Malaysia. It also operates plantations in Sumatera, Kalimantan and Sulawesi in Indonesia, as well as production plants and refineries.

The IEA predicts that biofuels use in Asian countries will remain modest. But as a major producer of palm oil, the Malaysian government is encouraging the production of biofuel feedstock and the building of biodiesel plants that use palm oil. Domestically, Malaysia is preparing to change from diesel to bio-fuels by 2008, including drafting legislation that will make the switch mandatory. From 2007, all diesel sold in Malaysia must contain 5% palm oil. Malaysia is emerging as one of the leading biofuel producers with 91 plants approved and a handful now in operation, all based on palm oil. Most are aimed at supplying regional demand, though exports to Europe are also planned, with China currently the main importer of Malaysian products for biodiesel.

On 16 December 2007, Malaysia opened its first biodiesel plant in the state of Pahang, which has an annual capacity of 100,000 tonnes and also produces by-products in the f