Palm oil is not a failure as a biofuel

So yes, as currently practiced, palm oil production often has a significantly negative impact on the environment, but is unlikely that oil palm plantation development will slow anytime soon due to (1) lack of economic alternatives in many areas where the renewable energy source is grown and (2) rising biofuel demand from China.

After large-scale deforestation in the lowlands and the importation of millions of people through poorly-executed transmigration programs, there are few economic options in most of Borneo and Sumatra, two islands where much of the current land conversion for oil palm is occurring. Having lost jobs in the forestry sector, many villages are faced with having to decide whether to give up the remaining forest for oil palm or continue with subsistence living. Oil palm plantations are often viewed as offering the best economic potential, especially given rapidly expanding demand from China.
While policymakers debate the impact of biofuels in Brussels this week, in the future China is going consume far greater amounts of biodiesel than Europe. With demand for cars surging and the country facing energy supply constraints and its own pollution problems, China appears to be ramping up for a massive expansion of diesel car production. Where is the diesel fuel to power these vehicles going to come from? Smart bets are on oil palm in southeast Asia and soybeans in the Amazon. Why else would state-backed Chinese firms be bankrolling oil palm development in Indonesia and infrastructure projects linking coastal South America to the heart of the Amazon? The potential of close-to-home oil palm plantations is simply too alluring.

Mongabay