Why the biofuels fad can't last

Indonesia's annual net carbon emissions now top those of the US. The reason? Forest clearance in order to make way for palm oil production. Which just goes to shows how hard it is to find a viable alternative to fossil fuels.

Here's a statistic from Prospect that might surprise you: Indonesia has higher net carbon emissions every year than the US. "We usually assume," say Trevor Fenning and Kevan Gartland in the magazine, "that the countries that consume the greatest amount of fossil fuels make the greatest contribution to global warming. But what really matters is a country's net emissions its total emissions, regardless of origin minus the carbon that is fixed back down to earth again, mainly by plants." The reason Indonesia scores so very badly on this measure comes down to deforestation: trees are being pulled down to make way for agriculture at such speed that within 15 years 90% of the forests of Indonesia are likely to be long gone.

But before you start feeling all shocked about the Indonesians so wantonly jeopardising the future of the planet, stop to think about why the scale of forest clearance has been stepped up quite so much in the last few years. It's all about the biofuels boom. It used to be that all the palm oil produced in Malaysia and in Indonesia was eaten in one form or another, but as anti-oil fever has taken hold and the EU has announced a target that 10% of vehicles should run on biofuels by 2020, demand has soared. All the Indonesians are doing is trying to create the supply to meet that demand.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.