EU Mulls Phasing Out Palm Oil Biodiesel By 2020, Malaysia and Indonesia Responds

Earlier this month, the European Parliament has voted to phase out palm oil-based biofuels by 2020, on grounds that palm oil production is responsible for severe deforestations in many countries.

The resolution by the European Parliament however, has yet to be ratified by the European Commission.

While the European Commission mulls over the matter, ministers from Malaysia and Indonesia, the two largest exporter of palm oil in the world, will be heading to Europe next month to counter the resolution.

Speaking to Bernama earlier today, Plantation Industries and Commodities Minister Datuk Mah Siew Keong said “The Cabinet feels that the resolution is unfair. I have been instructed by the prime minister to go to Europe to talk to the EU lawmakers and officials.”

In pushing for the motion to ban palm oil-based biofuels in the European Union, Member of the European Parliament representing the Czech Republic, Kateřina Konečná said “We want an open debate with all players so we can make palm oil production sustainable, without cutting down forests and in compliance with dignified human rights conditions.”

The European Parliament voted overwhelmingly in favour of her motion, with 640 votes against 18, with 28 abstentions.

“This is Parliament’s first resolution on this issue and it is up to the Commission how it acts upon it. But we cannot ignore the problem of deforestation, which threatens the Global Agreement on Climate Change COP21 and UN Sustainable Development Goals”, she added.

The European Parliament noted that 46 percent of the palm oil imported by the EU is used to produce biofuels, requiring the use of about one million hectares of tropical soils.

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Since the ‘90s, the palm oil industry is often targeted by green lobby groups from Europe. While the motives of some of these groups are questionable, the allegations are not entirely baseless. Our almost annual haze phenomenon is itself a strong evidence against the palm oil industry.

At the same time, it is important to acknowledge that not all palm oil producers are as irresponsible. The industry should be given credit for making a voluntary move to establish the Roundtable on Sustainable Palm Oil in 2004. A direct result of this was the creation of the Certified Sustainable Palm Oil (CSPO) standard.

However, the EU counters that such standards is open to criticism and are confusing to consumers, leading Indonesia to lambast the EU for using environmental credentials as an excuse to protect Europe’s domestic agricultural sector, a sector which is heavily subsidized by the European Union.

In response to the European Parliament’s resolution, the Indonesian Foreign Ministry had issued a statement that reads, “The recommendation to phase out the use of palm oil within the resolution is protectionist in nature. It is odd that the resolution recommends the promotion of rapeseed and sunflower oils, which according to data, are actually inferior to palm oil.”

Independent tests by Japan’s JAMA confirms palm oil-based biodiesels, the ones used in Malaysia and Indonesia, are indeed cleaner and provide better driving performance than other competing biofuels from Europe or USA made using either rapeseed or sunflower oil.

Closer to home, the Malaysia plans to increase the consumption of palm oil by mandating an increase in palm oil content in our local diesel fuel later this year, raising it from the current 7 percent to 10 percent for Euro 2M grade diesels (B10). However the exact timing to implement the proposed increase to B10 have yet to be finalized.

As not all vehicle manufacturers have agreed to warranty their vehicles to run on palm oil biodiesel blends beyond 7 percent, palm oil content for Euro 5 diesels will remain capped at 7 percent (B7).  

More on B10 biodiesel here.