TotalEnergies to end use of controversial palm oil from 2023
Quantum Commodity Intelligence – French energy major TotalEnergies will stop using palm oil from 2023, according to CEO Patrick Pouyanne, switching out the feedstock that it uses to produce biofuels and other bio-products for more expensive alternatives after pressure from environmental groups.
The company recently underwent a major rebranding process, changing its name from Total to TotalEnergies, as it pivots towards energy transition technologies and away from investment in fossil fuels, which Pouyanné said was all part of the decision now to cease palm oil usage after years of urging from green NGOs.
The pressure culminated in a court challenge regarding its use of palm oil in March from several organisations, including Greenpeace.
The company is "committed to sustainable development," said Pouyanné in an interview to be published July 5 in regional daily Provence and as reported by other local media.
"We wanted to rethink a certain number of subjects which may have created controversy, including the famous palm oil..we [are]...convinced that making biofuel based on vegetable oil now has less of a future because we come up against the question of the allocation of agricultural land."
The company operates a dedicated biorefinery at La Mède in the south of France with a capacity of 500,000 mt per year of hydrotreated vegetable oil (HVO) biodiesel and biojet and can also co-process vegetable oils alongside fossil intermediates at some of its fossil refineries to produce biofuels.
It is also in the process of converting its Grandpuits facility close to Paris into a 'zero-crude platform', which will be able to produce 340,000 mt per year of HVO, biojet and renewable naphtha, alongside a bioplastics plant, a plastic recycling facility and solar power plants.
While palm oil has attracted the ire of environmental groups and crop-based biofuels as a whole have been clamped down on by European Union legislation, it remains the cheapest widely available feedstock for production.
Third-month Bursa Malaysia crude palm oil futures were trading at an equivalent of $910/mt at Friday's close, compared to $1,386/mt for front-month Chicago Board of Trade soybean oil futures and $1,220/mt for used cooking oil delivered CIF ARA, according to broker data.
The move would not make the company's bio-operations uncompetitive though, added Pouyanne, with additional plants being added at existing facilities to extract more value from the bio-chain.
"The economic model of La Mede, taking into account the alternative sectors that have developed, will be preserved."
TotalEnergies has upped its intake of waste feedstocks such as used cooking oil which have the added bonus of counting double towards renewables mandates in many European countries, and processing at La Mède rose from 6% in 2019 to 25% last year.
It had already committed to cap vegetable oil usage at 450,000 mt and palm oil at 300,000 mt at the plant and it used 205,000 mt of vegetable oils in 2020, of which 171,000 mt was palm oil.