Saturday, 6 June 2009

No Catch-22 but hat-trick for sustainably grown oil palm

Saturday May 30, 2009 The Star, Malaysia

No Catch-22 but hat-trick for sustainably grown oil palm

I would like to respond to the article “Catch-22 for sustainably grown oil palm” by Tan Sri Dr Yusof Basiron (Star, May 23) in which he criticises the European Union’s (EU) policy for promoting sustainable renewable fuels as being discriminatory and directed against Malaysian palm oil.

First, three facts:

·The EU’s sustainability criteria for biofuels do not concern the palm oil imports for foods and food products. In other words, 90% of Malaysia’s palm oil exports to the EU (about RM5.4bil in 2008) are in no way affected by the new EU rules. Dr Yusof’s article does not make this explicit.

·The EU’s sustainability criteria do not close the market for palm oil or any other biofuel. That would be against WTO rules. Regardless of whether palm oil from Malaysia or anywhere else is produced sustainably, it will continue to have unimpeded access to the EU market.

·The EU presently has a very low import duty or no duty at all for imported palm oil used for producing biofuels. This low to zero duty is a unilateral EU decision aimed to promote biofuels. This is regardless of whether the imported biofuels are produced sustainably or not.

The EU’s policy for promoting sustainable biofuels is about promoting renewable fuels, including biofuels, without endangering an affordable food supply in the world, especially in the developing countries. We should not burn what the poorest on earth need to eat.

Secondly, it is about reducing green house gas emissions. It is no use promoting a biofuel if it causes greenhouse gas emissions that are only marginally lower than fossil fuel. That is why the EU decided that, if a biofuel is to receive an EU subsidy, it should reduce greenhouse gas emissions by at least 35% compared to a fossil fuel.

Biofuels made with Malaysian palm oil will be eligible for EU subsidies if they meet the new sustainability criteria. Malaysian palm oil is treated equally as any other raw material from any other country, including the EU’s own member states. There is no discrimination. If there were to be, Malaysia or anyone else could take the EU to the WTO tribunals.

The EU is for an ambitious global approach in bringing down climate change. At the same time, we are a fair and realistic player. We recognise that emerging economies like Malaysia cannot be asked to take on the same level of commitments as developed economies. But also in the emerging countries, industry needs to have incentives to make biofuel production sustainable, besides competitive.

The EU has set a binding target of 10% renewable energy in transport by 2020. There is therefore no doubt that demand for – sustainable – biofuels will rise rapidly over the coming years. This creates an opportunity for producing countries such as Malaysia. Malaysia and the EU should talk about promoting a knowledge- and technology-intensive palm oil industry that produces for the EU and world market in a sustainable way. We should discuss an ambitious new global agreement on climate change.

From my perspective, therefore, Malaysian palm oil is not in a Catch-22 situation. Rather, Malaysian palm oil can score a hat-trick: as a creator of sustainable growth and employment in Malaysia, as competitive fuel source for the world economy, and as a potent contributor to a better climate.

Vincent Piket


Head of the EC Delegation to