Confusing claims
As matters stood previously, the special tax on palm oil would have increased from the current EUR 103.71 per tonne, to EUR 133.71 per tonne in 2017 and all the way up to EUR 193.71 per tonne in 2020. The special tax on palm kernel oil and coconut oil would have increased from the current EUR 113.14 per tonne, to EUR 143.24 per tonne in 2017 and EUR 203.14 per tonne in 2020.

These levels must be compared to EUR 188.96 per tonne of olive oil, EUR 170.13 per tonne of peanut and corn oil, and EUR 87.16 per tonne of colza oil, among others.

Clearly, there is no uniformity of treatment of ‘like products’. There is also no scientific basis if (as proponents claim) the objective of the tax is to discourage consumption of saturated fats, which contribute to obesity and cardiovascular disease when consumed in high amounts.

The discrimination and lack of scientific basis are even more evident and disturbing if compared with the absence of a special tax on oils derived from cocoa butter, shea butter and animal fats. The food industry uses animal fats and milk, which often have a very high content of saturated fats.

If the French really want to fight obesity and cardiovascular disease – undoubtedly a legitimate policy objective – it is not clear why they do not neutrally tackle all ‘like products’ on the basis of their saturated fats content. Why would they discriminate on the basis of origin of the oils, among and between vegetable oils and animal fats?

Another stated objective is to fight environmental degradation and deforestation, and to encourage consumption of sustainable palm oil as well as its certification. However, it is not clear which sustainability criteria will apply to products derived from palm oil, in order to qualify for the proposed tax exemption.

An amendment, tabled in the Senate prior to the elimination of the provision, merely called for neutral and independent bodies to be in charge of determining the sustainable character of the products. The implementing mechanisms would likely have been adopted at a later stage by decree.

mkt-france-1

Even so, and while this objective may be noble in its intent, it appears discriminatory inasmuch as no similar sustainability criteria apply to other oils, whether of vegetable or animal origin.

Forests are being cut down around the world to clear land for soybean production, cattle grazing and the production of other commodities used in the food industry. Similarly, many vegetable oils that are used are not sustainable in that their yield per hectare is greatly inferior to that of palm oil and require abundant herbicides, pesticides and fertilisers to be produced and applied.

Why is France focusing only on the environmental sustainability of palm oil? Why are there no scientific criteria on which to base its proposed measure?

From a logical if not legal perspective, the mixing of the nutritional and environmental objective into a single ‘special tax’ is, at best, singular. Assuming that most palm oil used for human consumption is sustainably produced, does that mean that its use would no longer be considered problematic from a nutritional perspective?

Both sustainable and unsustainable palm oil contain saturated fats. Yet, only the consumption of unsustainable palm oil would be discouraged for purposes of fighting obesity and reducing cardiovascular disease. This is yet another indication that the French measure is poorly drafted. The problem is not palm oil per se and it must not be targeted.


 

© 2018 Global Oil & Fats Business Online – gofbonline.com

Top