Palm Oil vs. Crude Oil Worldwide
Supplies of diesel fuel from vegetable oils soared 80 percent in 2005, the agency said in July. That outpaced a 14 percent increase in production of ethanol, a fuel derived from corn and sugar that’s used as an alternative to gasoline.

Crude oil reached a record $78.40 a barrel last month and has driven up the cost of diesel and gasoline, making biofuels more competitive. Palm oil costs $507.50 a ton in Europe, less than about $680 for a ton of crude oil-derived diesel. Governments are subsidizing biodiesel to diversify energy supply and reduce greenhouse-gas emissions.

Vegetable oil-based diesel is made through a chemical process where the glycerin is separated from the fat, or vegetable oil. The process leaves behind two products — methyl esters, the chemical name for biodiesel, and glycerin, a byproduct usually sold for manufacturing in soaps and antifreeze.

Palm oil comes from bunches of plum-sized fruit on the tree, which becomes productive from about 30 months after planting.

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