Climate Change Fueling Boom in Corporate Greenwashing

On the Indonesian island of Bali, thousands of senior government officials are negotiating a plan to slow global warming. The meeting, which will focus on how to limit the greenhouse gas emissions that cause climate change, will run for the first two weeks of December and include 192 countries. This year's conclave is the 13th in a series launched by the United Nations Framework Convention on Climate Change that came into force in 1994.

The coal, gas and oil companies that are major producers of greenhouse gases are finally taking notice of these high-level political discussions, and many have mounted spirited public relations exercises to defend themselves, and even win endorsements of their products.

For example, the weekend before negotiations began, Neste Oil announced plans to build the world's largest bio-diesel facility a few hundred miles northeast of Bali, in the Tuas industrial zone on the island of Singapore. The Finnish company is betting that widespread concern, as well as mandatory limits on greenhouse gases generated by fossil fuels such as coal and petroleum, will increase demand for vegetable-based fuels.

Neste's proposed $800 million plant will use palm oil, which is readily available throughout the region. The company has pledged to buy palm oil certified by the Roundtable on Sustainable Palm Oil and to use proprietary NExBTL technology that produces fuel with lifecycle greenhouse gas emissions 40 to 60 percent less than those of conventional diesel fuel.

"We have a very clear principle that we are aware of the source of all raw materials used in our biodiesel, including palm oil … and that it is produced by sustainable methods," Neste CEO Resto Rinne told reporters, explaining that he expected this market to expand substantially. "In Europe alone, [annual] production will be well over 10 million tons by the end of the decade, and our share of this production will be some 800,000 tons."

Some environmental groups charge that Neste's claims are "greenwash": misleading public relations masking unsustainable practices. Greenpeace, for example, explains that the new plant in Singapore is likely to cause more environmental problems, not fewer, by increasing demand for new palm oil plantations that displace environmentally sensitive forests or wetland areas. In addition to destroying endangered habitats, the scheme could exacerbate global warming.

"Certification does not stop the rainforests from disappearing, for there is no doubt that the increase in demand for palm oil will lead to further destruction of rainforest. There is absolutely no way to grow enough sustainable palm oil for all the producers," said Harri Lammi, the program director for Greenpeace Finland. The week before the climate meeting got underway in Bali, his group attempted to highlight Neste's environmental record by blockading its ships in waters off of Finland.

The clash between Neste and Greenpeace highlights one of the key ideological debates over climate change: Business and politicians believe that a "technological" fix such as alternative fuels can solve the problem and also generate profits; many environmental groups believe the real solution to global warming lies in reducing consumption.

Guaranteed Markets, But Are They Guaranteed Green?

The arguments of the alternative fuel lobby are finding significant political backing. Earlier this year the European Union agreed to binding targets: By 2020, ten percent of its transportation industry's annual 300 million ton fuel consumption must come from alternatives such as biodiesel. China has predicted that it can switch 15 percent of its transport fuel consumption to biofuels, and India has set an ambitious target of 20 percent by 2020.

Even U.S. President George Bush in his January 2007 State of the Union address pledged to "increase the supply of alternative fuels by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017 -- and that is nearly five times the current target."