Saturday, 25 July 2009

EU pledges incentives for CPO producers

Adianto P. Simamora , The Jakarta Post , Jakarta | Sat, 07/25/2009

The European Union has pledged to offer incentives to Indonesia’s palm oil companies that use ecofriendly ways to produce palm oil, which would slash emissions and help deal with climate change.

EU Ambassador and Head of Delegation to Indonesia and Brunei Darussalam Julian Wilson insisted Friday emissions cut targets would not harm those Indonesia’s exporters not producing palm oil through environmentally friendly methods.

“We won’t harm the [palm oil] industry in Indonesia,” Wilson said. “All palm oil exporters will continue to enjoy exactly the same access at the same tariff rate as before, regardless of how they produce and process the palm oil.”

The EU office invited the Indonesian government, palm oil producers and environmental activists to discuss the newly launched

EU Renewable Energy Directive (RED), which has a mandatory target of the use of 10 percent renewable energy, such as biofuel, in each member state.

Incentives, such as investment aid, tax exemption or refunds, would be an additional benefit to palm oil companies, who could slash emissions by a minimum of 35 percent, calculated from the total emissions, from cultivation, land use, processing and palm oil distribution, to carbon capture.

EU Natural Resources and Environment program manager Thibaut Portevin said the palm oil from land containing high biodiversity value would not be eligible for the incentives.

“Nor would conversion of land with high carbon stocks,” he said, adding that each producer should be able to demonstrate actual emissions cuts before claiming incentives.

Indonesia produced about 17.4 million tons of palm oil from its 6.8 million hectares of plantations in 2007, making it the world’s largest palm oil producer. The sector, which contributed US$8 billion to the country’s total exports last year, employs up to three million people.

However, Indonesia has received persistent protests from activists and international buyers over its massive plantation expansion, which they say has destroyed many areas of forest habitat, including that of the orangutan, and are also accused of using fire to clear land, which exacerbates climate change.

Forest campaigner for Greenpeace Southeast Asia Bustar Maitar said EU policy had yet to answer the real problem of deforestation in Indonesia.

“For Greenpeace, such EU policy is not strong enough to stop deforestation, because the unchanged demand for palm oil from member states encourages massive plantation expansion in Indonesia,” he told The Jakarta Post. He said European countries should focus on using the “energy revolution”, such as wind power, to help combat climate change and stop deforestation in forest countries.

Indonesia holds the global carbon emissions record for deforestation and is third behind the US and China for total man-made emissions.