I’ve written about how ESG adventures of airlines have gone bad. It usually involves fraud. Delta got caught up in a scandal ‘ESG but evil’.
They claimed to be carbon neutral. They’re an airline burning jet fuel but they were buying carbon credits. The carbon credits turned out to be not so good. The money disappeared. The carbon credits were fake. Deforestation benchmarks were completely fabricated. And they sold the same credits multiple times. The forest’s owner went on the record, to the New Yorker, “I don’t know what you’re going to report on this, and I hope to God it’s not all of it, because I probably will go to jail.”
But what if sustainable aviation fuel was actually causing more deforestation, and turned out not to be re-using oils?
Bloomberg‘s Matt Levine writes about the arbitrage where – thanks to subsidies for sustainable aviation fuel – used deep fryer oil costs more than fresh oil.
- You can make jet fuel out of palm oil.
- You can’t call that jet fuel sustainable if you do it using fresh oil. If you give used cooking oil a second life, that’s sustainable.
- Airlines are pushing the narrative that this is the future of low emissions aviation – pivoting from fossil fuels and reusing resources – and getting governments to step up and pay for it.
- So used oil is sold at a premium.
Restaurants use oil, and resell it at a profit!
You can take palm oil, put it in a deep fryer, use it to make french fries, reuse it again and again until it becomes gross and the fries taste bad, and then take the used oil and sell it to a refiner to make jet fuel. Also works with olive oil, soybean oil, lots of cooking oils. This is a very nice fact about the world!
Since used cooking oil can be marketed as sustainable to airlines and governments, it commands a premium – even though the energy content of both is the same. “Fresh cooking oil is more useful to cooks than used cooking oil (it tastes better), but it is less useful to refiners and airlines than used cooking oil (it doesn’t reduce their carbon impact).”
In Malaysia the gap is even wider because the government subsidizes fresh cooking oil. Restaurants can buy cooking oil on the cheap for 60 cents, use it a bit, and resell it for a dollar.
If you don’t run a restaurant the trade is even better? Buy the fresh oil for 60 cents, don’t use it, and sell it for $1. “The refiner probably isn’t going to taste it” to know that it hasn’t been sitting in a deep fryer.
This trade actually increases the demand for palm oil and the resulting deforestation, rather than re-using palm oil. It turns out that’s what’s happening, “incidents of fraud is very high.”
Even without fraud, homes and restaurants in Malaysia now replace cooking oil after a single use in order to generate more ‘used’ oil to sell, rather than re-using it 3-5 times the way they’ve always done. And now you know why deep fried foods in Malaysia are so fresh!
Yes. The lively David Neelman/Willie Walsh exchange in Amsterdam last Fall likewise highlighted this point.
@PDT — David Neelman?
You mean founder of Breeze, jetBlue, etc. “Mormon David Neeleman” (as Gary wrote in his January 25, 2025 post “From Flydubai To Breeze Airways: The ‘Boeing Boeing Pilot’ Juggling Marriages On Two Continents Returns To The Skies.”) I, for one, enjoyed the odd emphasis then on Neeleman’s membership in LDS. That was a fun comment section.
@L737, can I get an ‘amen’ for this VFTW call-back?
South Park really did it best: “A Native American?? ..But your skin is white!” ; “Yes, long ago, all Native Americans were white… we all came from Jerusalem.. and while we were here we were visited by Christ…” ; “Jesus lived here in America?” (…dumb, dumb, dumb, dumb, dumb…) Time to find those the seer stones!
I mean, that is literally crazy, but Scientology is worse, and it’s not like ‘Jonah and the whale’ was ‘real’ either. Many religions have decent lessons to live by (Golden Rule), but much of the stories shouldn’t be taken literally (yet, the fundamentalists sure do force that, don’t they.) Likewise, as entities and peoples, they each can do good deeds, charity, etc., but also, can lead to ‘forever wars’ against ‘other tribes.’ Look no further than Myanmar (those ain’t peaceful Buddhists; they’re a military junta.) Or, *cough* Iran *cough*. Yeah, it usually just ends up with politics, power, money.
1990, read this month’s Harper’s magazine about the mass cult of people in Fiji and other South Pacific islands who believe they are the lost tribes of Israel. (Some believe that ancient Jews originated in Fiji) while their leaders more or less openly admit they are using them. People will believe anything when thy are desperate, which might have certain parallels in the U.S.
Anyway, palm oil is often made from trees planted after a rain forest has been burned down. Even if their oil was being used as green as claimed, which obviously it is not, the origin is terrible for the environment.
@drrichard — Excellent reference and analogy. I can’t believe a former science teacher (who knew better) became an evangelical preacher pushing that myth. But, hey, he found ‘runes’ in a cave in Fiji, so it must be true… (quite the grift!) At least, his followers are planting some trees in the desert, supposedly. Maybe they’ll water them with some delicious Fiji water…
Deforestation is a huge problem in Indonesia and Malaysia. Those forests are sinks for CO2 and will not come back once burned and bulldozed to create palm oil plantations. Sustainable jet fuel is pure bullshit.
@1990 — Wow time flies, I felt like that article was a whole lot more recent. 5 dollars in the jar for a 5 month call back – amen!
At least Ed discovered a daily use for the palm oil, which has replaced his usual oversupply of hair gel…
@L737 — Louder, for the people in the back!
Color me shocked. Every environmentalist cause is a scam. If it wasn’t, they wouldn’t need to guilt you to pay. It would be a logical, free exchange of services based on being mutually beneficial. But no, it’s just grifters grifting, as usual. Thankfully it’s only dumb leftists paying the dumb leftist tax. But yeah, keep buying your carbon offsets for the planet, or this grifter, or whatever.
@Mantis — I wouldn’t go that far. For instance, while there are some ‘environmentalist’ types who are against nuclear energy (mostly because they’re afraid of meltdowns, and waste storage, but the infrastructure has gotten much better since the first-generation plants), and it is objectively better than fossil fuels and other ‘green’ energy (like, wind, solar, etc., because it’s always ‘on’.)
When you say ‘left’ are you referring to culture, economics, partisanship (in the US), because I know you like to attack your perceived enemies and boogeymen, but ‘energy’ as an issue is non-partisan. If the seas rise, and the rivers run dry, we’re all gonna be screwed. Fine, deny it. Maybe you’ll ‘check out’ before the ‘bill comes due.’
Why use it all all? Why have a restaurant?
Just buy, sell as “used,” buy, sell again…
More insanity pushed by people who do not understand how incentives work.
Mantis is 100% right on point. Some people just prefer to be scammed rather than see the truth.
@David P — So, nuclear power is a scam? 100%?