Malaysian biofuels industry experience: A socio-political analysis of the commercial environment

Abstract

This study examines the Jatropha adoption process in Sarawak, Malaysia, a land rich in biological and ethnic diversity, but highly impoverished. Attempts to alleviate poverty through oil palm plantation development resulted in internationally condemned destruction of peat lands. Sarawak subsequently turned to the inedible, low-input, exportable, biodiesel feedstock Jatropha. This case study argues that Jatropha is unlikely to make more significant socio-economic contributions than oil palm or other cash crops. The analysis suggests that companies use social capital to aggressively expand their Jatropha business among the native population in order to gain access to native customary lands, which are often underproductive peat lands. Global biofuels sector development dynamics are examined through the lenses of political economics and social, agricultural, and energy studies. The research finds that farmers' decisions to participate in the biofuels global value chain may result in negative income effects, household food security reduction, and biodiversity loss from peat land destruction. The paper concludes with a proposal for an alternative approach to evaluate both social and financial drivers in order to prevent the negative effects of biofuel-based agribusiness on human and environmental systems.