Greenergy says its palm oil from "green" sources

By Gerard Wynn

LONDON (Reuters) - Britain's largest independent oil company, Greenergy, said on Wednesday the palm oil it uses for biodiesel is not associated with tropical rainforest clearance.

Environmental groups say that tropical deforestation is the flip side of a surge in biofuel production as countries look for alternatives to fossil fuels, in part on energy security fears.

Oil major BP (BP.L: Quote, Profile, Research, Stock Buzz) said on Wednesday it did not blend palm oil at all worldwide, partly on environmental concerns. Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) said it did not blend yet but was testing the environmental implications of doing so.

Greenergy has an 8 percent share of Britain's road fuel market and more than half of its biofuel market. It sells nearly four billion liters of road fuel in the UK every year.

Greenergy Chief Executive Andrew Owens said he could guarantee that no palm oil used by Greenergy was sourced from plantations that had resulted from rainforest destruction.

"We do use palm oil, from Malaysia normally speaking. We have the strongest purchasing criteria of anybody in the industry," he said.

"It's a one and a half page statement of compliances that the supplier has to do, with visibility and audit rights, inspection rights. We only trade with people from the RSPO (Roundtable on Sustainable Palm Oil)."

Biofuels are derived from food crops like sugar, corn and palm oil, and besides enhancing diversity of energy sources, when burned they produce less carbon dioxide, widely blamed for global warming, than fossil fuels.  Continued...