Palm oil as a bio-fuel is highly sustainable and energy-efficient and is perhaps the most productive energy crop.  Yet, there have been calls for a ban on the use of palm oil for bio-diesel in Europe.
                       
According to his recent article in Bioenergy Business, Marcel Silvius of Wetlands International charges that planting oil palm on peat releases huge amounts of carbon dioxide into the atmosphere.  While the point is valid, his argument against palm oil as a biofuel source is built on data comprising many uncertainties.

The report states that 25% of plantations in Malaysia and Indonesia are on peat, but in Malaysia the figure is only 6%.  Assumptions that peat oxidation rate increases with deeper drainage and that CO2 emissions are zero without drainage are weakly substantiated.  Comparisons of oxidation rates under different land use are inconclusive and actually shown as inaccurate in another study

However, Silvius does point to some relevant rethinking, such as directing plantation development away from forest to the millions of hectares of idle or waste land available. This will be beneficial for biodiversity and the environment.

It is important to ensure palm oil production adheres to defined criteria for sustainability and is not bad for the environment.  This means following the guidelines laid out by the Roundtable on Sustainable Palm Oil (RSPO) – such as avoid development on deep peat soil, not to use fire for land clearing, move from deforestation to replanting idle land.  It calls for oil palm development that factors in the full environmental costs.