The
European Union’s revision of the Renewable Energy Directive is reaching
a critical point in the negotiations. Yesterday the EU’s “Ad
Hoc Working Group on ILUC” met to finalize details on the position of
the 28 EU Member States. Following that, Ministers from each of those 28
countries are expected to formalize their position on RED and ILUC, on
December 13th. Depending on the outcome of those meetings, it could see a
step forward for the EU towards the use of efficient, advanced biofuels
– including those from Malaysian Palm Oil – or it could signal a
regression by the EU towards protectionism, isolationism, and poor use
of energy sources.
The original Renewable Energy Directive (RED) was passed in 2009 by
the EU, and has been heavily criticized for discriminating against
non-EU biofuel feedstocks, in order to prop up the uncompetitive
European industries, notably the rapeseed industry which is a powerful
lobby in France and Germany, among other countries. The EU provided a
‘default value’ for each feedstock – this was meant to represent the
emission-saving value of each feedstock (and therefore calculate its
environmental value). However, a study from scientists at the University of Jena have
since proved that the EU massively underestimated the emission savings
value of palm oil – therefore putting it at a deliberate disadvantage.
The EU’s value for palm oil was set at 19 per cent, but the independent
analysis from these German scientists calculates palm oil to save between 38.5-41 per cent. Independent estimates published in the scientific journal Nature similarly
calculate that the EU has over-stated the emissions-saving value of
rapeseed, therefore giving it an unjustified privileged position in the
marketplace. Rapeseed was given a value by the EU of 38 per cent –
conveniently above the EU’s minimum threshold of 35 per cent. However, Nature reported the new calculations showed rapeseed biodiesel achieving only a 29.7 per cent savings value.
These studies, and the clear protectionist nature of the RED, have
led to substantial protests from non-EU Governments. Argentina has
already announced the intention to take the EU to the World Trade
Organisation (WTO) in protest, and Indonesia and other countries have
signaled they could follow suit. The EU should not be allowed to get
away with rigging the numbers in a way that harms small farmers,
innovators, and producers within the Malaysian Palm Oil industry.
The new revision of RED, which has been discussed throughout 2012 in
Brussels, has proved very difficult and controversial for the EU. The
Parliament’s lead MEP, launched a crusade against palm oil, making wild
accusations and introducing major discrimination that would harm
Malaysian small farmers, workers and companies. ILUC has been derided
by scientists and economists around the world, as anti-scientific,
discriminatory, and impossible to calculate. Introducing ILUC factors
would lead the EU renewable energy policy into further protectionism and
hurt the EU’s ability to reduce greenhouse gas emissions through
efficient biofuels, such as those produced from Malaysian Palm Oil.
A major concern for Malaysian Palm Oil, in addition to ILUC, lies in direct discrimination that has been introduced by the European Parliament. Malaysian Palm Oil products (POME and empty FFB) have been removed from an EU definition of ‘advanced biofuels’. The EU’s policy statements throughout the revision of RED make it clear that ‘advanced biofuels’ are the future of European renewable energy. The share of ‘first-generation’ biofuels has been capped at 6 per cent, and will likely decline, but ‘advanced biofuels’ are given special treatment and incentives. The share of the market is predicted to rise, and the European market will become dominated by advanced biofuels in future. Mrs Lepage stated that “support should be focused on advanced biofuels”. The European Parliament has attempted to shut off this major market, and deny entry to palm oil products, by taking POME and FFB off the list of ‘advanced biofuels’. This will clearly be harmful to producers, most specifically small farmers, across Malaysia. This must also be considered a new threat from the EU against palm oil.
A major concern for Malaysian Palm Oil, in addition to ILUC, lies in direct discrimination that has been introduced by the European Parliament. Malaysian Palm Oil products (POME and empty FFB) have been removed from an EU definition of ‘advanced biofuels’. The EU’s policy statements throughout the revision of RED make it clear that ‘advanced biofuels’ are the future of European renewable energy. The share of ‘first-generation’ biofuels has been capped at 6 per cent, and will likely decline, but ‘advanced biofuels’ are given special treatment and incentives. The share of the market is predicted to rise, and the European market will become dominated by advanced biofuels in future. Mrs Lepage stated that “support should be focused on advanced biofuels”. The European Parliament has attempted to shut off this major market, and deny entry to palm oil products, by taking POME and FFB off the list of ‘advanced biofuels’. This will clearly be harmful to producers, most specifically small farmers, across Malaysia. This must also be considered a new threat from the EU against palm oil.
EU Ministers must reject such
protectionism in their meeting of December 13th. The Council needs to
reset EU renewable energy policy, in order to avoid further conflict
with its trading partners around the world. The USA, Canada, Argentina,
Brazil, Indonesia and Malaysia are just some of the countries that are
loudly expressing concerns. The EU is currently discussing trade deals
with many of those countries, and those deals would be harmed by
continuing EU protectionism over renewable energy. The ILUC Working
Group, and the Ministers, need to see sense: let’s choose free &
fair trade over protectionism; and let’s choose facts and science over
dogma.
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