The U.S. Environmental Protection Agency found that biodiesel produced from palm oil didn't meet the basic standard requirements to qualify as renewable diesel.
A consortium of environmental groups said that, while they agreed with the findings, the EPA underestimated the emissions levels. They said they believe palm oil has serious environmental consequences.
"The emissions of palm oil based biofuels substantially exceed the emissions from conventional petroleum diesel," Jeremy Martin, a senior scientist at the Union of Concerned Scientists, said in a statement.
The Rainforest Action Network said the EPA is under pressure from lobbying groups aligned with the palm oil industry in Asia, such as the American Legislative Exchange Council and "other extremist organizations," to reverse its findings.
Laurel Sutherlin, an advocate with RAN, said the action by ALEC was a "disturbing development" that represented the "shadowy" world of the Asian palm oil industry.
The advocacy group said the production of palm oil was one of the leading contributors to rainforest destruction in the world.
"It has been estimated that deforestation in Indonesia alone contributes more carbon to the atmosphere than all the transportation sector in the U.S. combined," stated RAN.