2017 has been a busy year thus far for palm oil especially in Europe. Led by health and environmental claims leveled against palm oil, Europe has launched multiple policy threats, which serve possibly to restrict trade in this important commodity.

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The ripples are spreading far and wide from the April 4 vote by the European Parliament that adopted a ‘Resolution on Palm Oil and Deforestation of Rainforests’. This was approved by 640 votes to 18, with 28 abstentions. It will now be referred to the European Commission (EC) for deliberation and possible rule making.

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In January this year, the French Senate proposed a new tax on palm oil and soon gained the support of some Ministers. In July, though, the government withdrew the proposal.

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In January this year, the French Senate proposed a new tax on palm oil and soon gained the support of some Ministers. In July, though, the government withdrew the proposal.

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In January this year, the French Senate proposed a new tax on palm oil and soon gained the support of some Ministers. In July, though, the government withdrew the proposal.

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Since the end of January, the French Parliament has been debating a Draft Law on biodiversity, which includes a proposal to impose an additional tax on palm oil of up to EUR 90 per tonne by 2020.

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Sustainability through advanced Malaysian palm oil biofuels

The development of advanced biofuels and biomass from palm oil is one of the most exciting technological advances being undertaken in the Malaysian palm oil industry. Palm oil is the world’s most efficient and sustainable oilseed crop; so it is natural that it can be a vital source for renewable energy around the world – whether from empty fresh fruit bunches and other organic material or from leftover palm oil mill effluent.

The possibilities for palm oil to be used in next-generation biomass and biofuels are numerous. It is important, however, that the right regulation is in place to take advantage of this.

Since 2012, the EU has been debating a revision to the Renewable Energy Directive (RED) – a regime for mandating the use of biofuels and biomass. Malaysian palm oil biofuel and biomass have been an important contributor to the EU’s greenhouse gas reduction targets, ever since renewable energy targets were introduced. Palm oil renewables from Malaysia have been certified by the German certification system, ISCC, and palm oil is used in many EU member-states as a sustainable, renewable fuel.

However, recent revision of the RED led to the usual campaigns in an attempt to smear and undermine Malaysian palm oil. Green NGOs, led by Greenpeace and Friends of the Earth, attempted to introduce a new criterion – indirect land-use change (ILUC). This was a wholly unscientific attempt to hijack the debate on palm oil biofuels.

It is easy to tell the viability of ILUC when we examine the two sides to the argument. On the side promoting ILUC (which would restrict the amount of palm oil biofuels used in Europe), we find the Green NGOs; some elements of the protectionist European industry; and many leftist politicians in Brussels. On the opposing side (arguing that a fair, level playing field is needed) we find the scientific community in Europe and around the world; economic and statistical analysts; international trade experts; and biofuel producers.

Once again, the NGOs found themselves arguing the anti-scientific case. Once again, the advice of scientists and experts was that the NGOs must be ignored. Fortunately, this coalition of scientists, experts, economists, industry and sensible European politicians prevailed. The major challenge of ILUC was defeated in the vote in the European Parliament, and was rejected by the governments of member-states.

However, ILUC was not the only challenge for Malaysian palm oil, in terms of renewable energy in the EU. Socialist Members of the European Parliament introduced amendments calling for advanced palm oil biomass and biofuels to be excluded from the European market.

This outrageous attempt at full discrimination against palm oil would have harmed thousands of producers and companies across Malaysia. The high-tech development of advanced palm biomass and biofuels is a potentially lucrative and high-added value sector for Malaysia in the future: a big part of this was threatened with the amendment that would have closed off the EU market. Again, this amendment was defeated thanks to sensible decision making and good arguments put forward that such discrimination would be unjustified and would probably be illegal under international trade rules.

The end result of the legislative process in Brussels was that two major threats to Malaysian palm oil have been defeated – the full implementation of ILUC has been avoided; and the proposed direct discrimination against advanced palm oil biomass has been rejected.

We must never become complacent. It is clear that the opponents of Malaysian palm oil will use any opportunity to launch attacks. Even following the final vote on this amendment to the RED, there is the possibility of future discrimination against Malaysian producers. The EU has the power to change the situation and to potentially restrict imports of Malaysian palm oil.

We must be vigilant against future attacks. Malaysian palm oil is moving forward with new investments, better research and new technologies, and the world-leading MSPO sustainability standard. Our competitors and opponents will continue to try to undermine this progress. It is fundamental for our future that we never allow this to happen.

Dr Yusof Basiron

CEO, MPOC

 
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