Deforestation risk from Nordic alternative fuel policy

A report for Rainforest Foundation Norway

This report examines the climate and environmental risks associated with biofuel policies in Sweden, Finland, and Norway. While these countries are often recognised as climate leaders, their support for certain biofuel feedstocks, including palm derivatives, used cooking oil, and animal fats, raises concerns about indirect land use change, deforestation, and peatland degradation. The findings suggest that without further safeguards, Nordic biofuel demand could drive deforestation and peat loss amounting to tens of thousands of hectares annually by 2030.

Finland consumes particularly high volumes of PFAD – palm fatty acid distillates – in its biofuel sector. PFAD is a valuable by-product of palm oil refining, and is linked to the expansion of oil palm plantations in Southeast Asia. Sweden and Norway have taken steps to exclude PFAD, but continue to rely heavily on residual oils, which come with their own environmental challenges. In all three countries, current policy frameworks do not fully account for indirect emissions or the global displacement effects of feedstock use.

This report provides country-specific recommendations to align Nordic biofuel policy with climate and biodiversity goals, including capping high-risk feedstocks, supporting the development of advanced alternatives, and accelerating transport electrification. The analysis underscores the importance of embedding strong environmental safeguards in biofuel policy to ensure that efforts to decarbonise transport do not undermine broader sustainability objectives.