Sunday, 13 September 2009

Palm Oil Producers Want Indonesia's Support on Tough EU Biofuel Regulation

September 13, 2009

Dian Ariffahmi

The country’s crude palm oil producers have called on the government to defend their interests against the European Union over a draft directive on renewable energy and fuel quality that they said would be detrimental to them.

The draft EU directive states that CPO is not a proper biofuel as the palm-oil boom has been one of the leading factors leading to deforestation.

“It is just another ruse to hamper Indonesian products from entering the 27 EU countries,” the general secretary of the Indonesian Palm Oil Association (Gapki), Joko Supriyono, said in Jakarta on Friday, suggesting that the bloc was out to protect its producers of seed-based vegetable oils, such as those produced from rapeseed and sunflower seeds.

Under the draft EU directive, the European countries will set a soft target of 5.75 percent biodiesel use in the energy mix in 2010, rising to 10 percent in 2020.

Once the measure is fully adopted in 2011, strict requirements will be imposed on countries planning to export CPO for processing into biofuel.

The guidelines include a prohibition on the development of oil-palm plantations on forestlands, grasslands with a high level of biological diversity and wetlands, which absorb excess carbon for emissions.

Although palm oil is not the only source of biofuel, CPO yields much higher quality fuel than that produced from other vegetable oils, according to the Indonesian Palm Oil Board (DMSI),

The requirements will be hard to meet for Indonesian producers as the bulk of the country’s oil-palm plantations stand on cleared forestland.

“This directive is a nightmare for the farmers, and bad news for the industry. They are trying to protect their market rather than to save the planet,” she Rosdiana Soeharto, a CPO analyst who once headed the DMSI.

Indonesia, the biggest palm-oil producer in the world, pumped out 18.4 million tons in 2008, with exports of 14 million tons.