Hawaiian Electric Co. will buy biodiesel only from farmed palm oil plantations that haven't been cut out of native forest, and which don't displace native peoples.

The company announced yesterday that it has committed, as local environmental groups demanded, to fully meet the requirements of the most prominent international standard on the subject, that of the Roundtable on Sustainable Palm Oil (RSPO). Hawaiian Electric has also applied for membership at the Roundtable.

"We listened to everyone and made significant adjustments based on what we heard," said Karl Stahlkopf, the utility company's senior vice president for energy solutions and its chief technology officer.

The draft plan had envisioned buying biodiesel from growers who promised and showed efforts toward meeting RSPO requirements. The final plan requires they already be there.

"This policy encompasses all elements of the RSPO from the first shipment," said Ralph Cavanaugh, energy program co-director for the Natural Resources Defense Council, which was Hawaiian Electric's partner in developing the new biofuel purchase policy. Company spokesman Peter Rosegg said the utility has determined that RSPO-certified sources of biodiesel from palm oil are available.

Life of the Land director Henry Curtis said the new policy isn't everything he'd hoped for, but it's a big step.

"That's better than what they had in the original plan, but I think in Hawai'i we should be going with the power sources we have here: wave, wind, solar and OTEC (ocean thermal energy conversion)," Curtis said.

Too, if the company wants to burn biodiesel, it should be looking for local sources and supporting local agricultural industries that would grow oil crops, he said.

That is the long-term plan, said Hawaiian Electric and the Natural Resources Defense Council. Hawaiian Electric will help establish a Biofuels Public Trust Fund by early 2008, which will support the development of a Hawai'i-based agricultural energy industry.

Hawai'i is uniquely situated to develop biofuel plantations, because there is significant unused acreage of former sugar and pineapple land, Cavanaugh said.

HECO has two generating plants anticipated to use biodiesel — one on O'ahu and one on Maui.

It is building a 110-megawatt power plant at Campbell Industrial Park, which would burn exclusively biofuels like biodiesel. The utility plans it as a "peaking" unit, meaning it would be fired up only for the few hours each afternoon and early evening when O'ahu's energy use reaches its high for the day. It proposes to buy processed biodiesel made from palm oil on the open market to run this plant, but it could also burn ethanol.

Hawaiian Electric is a partner in Blue Earth, a proposed Maui palm oil refinery, whose end-product will be biodiesel that will be burned in a diesel generator owned by HECO's Maui County sister firm. The raw palm oil purchased by Blue Earth would be required to meet the same RSPO standards as the Campbell peaking plant, Rosegg said.

The utility says it will buy locally produced biofuel feedstock first when it's available. But in the meantime it will buy imported fuel and feedstock. Hawaiian Electric will be the nation's largest user of biodiesel, and the company said it hopes its role in the market under the new policy will help push the biofuel industry into a sustainable direction.

Reach Jan TenBruggencate at jant@honoluluadvertiser.com.