The Oil Palm

NGO Campaign Wins Award for Misrepresenting Palm Oil

The International Forest Heroes Award was awarded to the anti-palm oil campaign this week.  The decision to award this prize was based on the premise that palm oil production from South East Asia is a threat to the orang-utan and that the industry is engaged in the destruction of tropical forests.

It calls for products like Girl Scout cookies to be palm oil free. This premise is not accurate. The Malaysian palm oil industry is a global leader in sustainable production and employment, providing millions of dollars of support for conservation efforts to protect biodiversity and the orangutan, such as the Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF).

Malaysian industry is leading in the Roundtable on Sustainable Palm Oil.  Malaysia also ensures that for every one hectare of land that is converted to oil palm, four hectares are permanently preserved and at least 50 percent of the country’s forests are protected, a commitment made at the 1992 Rio Earth Summit.

The industry also provides sustainable jobs and a route out of poverty for many families.  Small farmers play an important role, owning 40 percent of the plantations, and supporting over 1 million people.  Denying market access to palm oil would devalue all of these achievements and also undermine long-term conservation efforts supported by revenue from the industry.

The Oil Palm

US medical expert discovers the miracle of palm oil

American television talk show host and respected cardiothoracic surgeon, Dr Mehmet Oz, has recently discovered the ‘miraculous’ health benefits of red palm oil.
A recent episode of his widely viewed television show, the American doctor and Professor at Columbia University described the red color of the palm oil as a “stop sign for aging”. Dr Oz said that consuming the vegetable oil can fight the aging process, aid fat loss and combat heart disease.

The health benefits of red palm oil have been known in Asia for decades, where most of the world’s palm oil is produced, and where palm oil is widely consumed as a vegetable oil staple. However, the health benefits of palm oil have only recently been discovered by American consumers.

Red palm oil is now being sold in the US as a dietary additive, and is expected to become one of the new ‘super-foods’ for 2013. Proponents such as Dr Oz believe that regular consumption of the vegetable oil can help reduce body weight, maintain healthy brain activity and fight off harmful free radicals.

These health benefits stem from beneficial nutrients naturally found in palm oil, namely carotene (a powerful antioxidant) and tocotrienol (a good source of vitamin E).

According to Dr Oz, and expert guest Bryce Wylde, tocotrienols increase blood flow to the brain and reduce the damage done by free radicals. As a result, the vegetable oil contains properties that have been associated with reducing the risk of Alzheimer’s disease and dementia. Dr. Oz and Bryce Wylde recommend the consumption of two tablespoons  of red palm oil per day, in order to realize its potential health benefits.

The Oil Palm

Europe’s Renewable Energy Directive and the Implications for Palm Oil

A recent editorial in Europe’s World entitled “Europe’s biofuels policy is protectionist and wrong-headed” by Fredrik Erixon, Director of the European Centre for International Political Economy (ECIPE), highlights very troubling developments coming out of the European Union – ones with dangerous consequences for the future use of palm oil-sourced biofuels.

Mr. Erixon’s concerns are with the European Union’s Renewable Energy Directive (RED), the EU biofuels policy that is protectionist in its heavily favouring of domestically produced biofuels within the EU. Mr. Erixon states:

“RED adds a new type of policy, technical regulation, to Europe’s toolkit of trade restrictive measures in biofuels…[it] is an ineffective tool for regulating biofuels – and it’s also a policy that will make Europe’s shift from fossil fuels to biofuels even more costly than it already is. Behind the rhetoric there hide industrial policy concerns that favour domestic biodiesel production at the expense of biodiesel produced abroad.”

Not only is RED a protectionist mechanism used to prop up Europe’s domestically sourced biofuels; it also violates World Trade Organization (WTO) commitments:

“The WTO rules are especially sensitive to discrimination, and to the principle that like products should be treated equally. Several opinions from the WTO’s panels and its appellate body have made clear that violations of these principles will not be taken lightly… In the event of a country opting for trade-restrictive measures, other countries will swiftly take it to the WTO for dispute resolutions. That means there is a clear risk of sharp trade conflicts with severe ramifications.”

The implications to Malaysia of Europe’s RED policy are grave. RED seeks to prioritize domestic biofuels over more efficient developing world biofuel sources, such as Malaysian palm oil.

Palm oil is low-cost, energy efficient, and environmentally friendly. It has a higher yield per hectare than any other readily vegetable oil source in the world, making it an effective source for biofuel in both the developing world, such as Malaysia, and the developed world, such as EU Member States.

Despite the 2.05 million tonnes of Malaysian palm oil exported to European countries in 2010, the EU’s RED policy illustrates an attempt to undermine foreign biofuel sources in favor of less efficient European, domestic biofuels. German-produced Rapeseed is a less efficient vegetable oil than palm oil, but has received massive subsidies for its production to compete with foreign-produced palm oil.

ECIPE’s earlier research further illuminates this problem.

For example, EU has increased subsidies to producers of rapeseed and sugar (already commanding inflated European prices) to meet the new demand for biofuels which has been artificially created to increase consumption of renewable energy. In 2009, the EU provided €4 billion in subsidies to the domestic biofuels sector.

And in pursuing RED, the EU is erecting trade barriers to limit imports of unsubsidized and cheaper biofuels (such as biodiesel from palm oil in Malaysia and ethanol from Brazilian-based sugar) to preserve this new market for biofuels for subsidized and more expensive biodiesel processed from European rapeseed and European sugar beet.

If Europe really wants to open up trade with Malaysia – as the EU’s pursuit of a EU-Malaysia Free Trade Agreement suggests – the EU would be well-served by ceasing the protectionist nature of the RED and reducing its trade barriers which only serve to slow economic growth in both the developed and developing worlds.

The Oil Palm

Feeding The World In The 21st Century

The oil palm is a remarkable crop, providing the most efficient oilseed that feeds millions throughout the world, while contributing to rural development and poverty alleviation. While Western consumers benefit from a low-cost, sustainable vegetable oil, smallholders in the developing world are prospering from the industry.

Right now, the world’s population is a staggering 6.8 billion people. That number is set to rise to nearly 9 billion – almost a 50% increase – by mid-century. Today, nearly a quarter of the world lives under USD $2.00 a day. Food security and combating poverty demands that the poor be given the opportunity to become food secure and prosperous.

Yet if the world is going to address the growing issue of food security, it must do more with its current resources; a good first step would be to invest in sustainable crops such as palm oil. MPOC CEO Tan Sri Datuk Dr. Yusof Basiron recently discussed the issue of food security in a Bangkok Post editorial and detailed the many benefits palm oil has created in the fight to ensure food security:

“…World demand for calorie-rich, nutritious fare is starting to jump. Feeding so many hungry mouths is a complex task. But it will never happen unless we substantially increase food yields, especially the yields of staple foods such as palm oil which is already used by over one billion consumers around the world.

The good news is that our industry has the potential to meet the rising demand. We have invested in productivity-enhancing technology to boost yields. And we have done this while protecting the global environment. Palm oil is the world’s most sustainable vegetable oil as it produces significantly more calories per acre than competing products. Thus our industry contributes safe food products to enhance global food security; protects valuable natural resources such as forests; and provides good jobs and careers for an aspirational middle class…”

If the world is going to meet these new challenges, there are some important steps that need to be taken. Land productivity needs to be improved, so that agriculture is more effective and efficient. And poverty must be reduced, so people can benefit from the fruits of innovation and engage as economic equals with the developed community.

With ballooning populations, food insecurity is increasingly becoming a hindrance to eradicating poverty and achieving prosperity in the developing world and across the globe. With more mouths to feed, it’s important that the world utilizes high productivity crops such as palm oil when planning for its future.

But there are opponents to the efforts of palm oil’s expansion, which would threaten food security. The World Bank, under pressure from environmental NGOs in the Western world, has sought to redefine its lending standards, imperiling funding necessary for development to feed the children of the future. The developing world must be supplied with adequate tools and investment necessary to support food security in both the short term and the long term. Instead of pushing for strict guidelines that risk future palm oil cultivation, the World Bank should support the sector as part of its true mission of poverty alleviation.

Agriculture development in emerging markets is critical to countering the effects of hunger and poverty. Palm oil is an important part of the solution, increasing land efficiency while promoting new means of sustainable development. The West needs to embrace these new solutions, and not bow to pressure from misguided environmental forces.

The Oil Palm

The Oil Palm – Taking Malaysia’s Palm Oil Industry to New Levels

Today, The Oil Palm site was announced to counter online propaganda of NGOs against the palm oil industry and highlight the industry’s contributions to global economic development and food security.  Palm oil cultivation is helping developing countries develop, providing an inexpensive and healthy source of food and is helping to increase living standards.  And as one of the most energy efficient sources of renewable energy, palm oil based-biofuels are bringing new, clean sources of sustainable power to communities across the world. Palm oil is integral to lifting the developing world onto its own growth trajectory – one rooted in sustainable development.

There is much misinformation and many false accusations propagated against the palm oil industry. It’s time to set the record straight.  Countries across the globe – from Southeast Asia and Africa to the United States and Europe – rely on the use of palm oil to create, buy, and sell consumer goods.  From vegetable oils to high-yield energy efficiency pellets, palm oil continues to be embraced by both producers and consumers because of its high quality and low costs.

With much hysteria by Western environmentalists eager to paint palm oil as destructive, an honest assessment deserves attention.  Some important facts about palm oil:

  • JOBS — Palm oil creates jobs in some of the most poverty-stricken, undeveloped areas of the world.  More than 3.5 million people in Southeast Asia are employed through the cultivation of palm oil.
  • SMALL FARMERS — Many palm oil growers are small farmers, directly helping contribute to upward mobility and the raising of living standards in the developing world; in Malaysia, 40% of palm oil plantations are owned by such small holders.
  • EFFICIENCY — Palm oil is the most efficient oil-bearing crop in the world, surpassing other biofuels such as soybean and rapeseed in per-hectare energy efficiency.  Furthermore, palm oil emissions have been estimated to be about half that of rapeseed, and less than two-thirds that of soybeans.
  • FOREST PROTECTION — Many Southeast Asian palm oil producing nations such as including Malaysia have met or surpassed voluntary forest protection targets.  Malaysia has exceeded its 1992 Rio Earth Summit pledge, setting aside half its land as primary forest and 23% for agricultural use.
  • REDUCING EMISSIONS — Palm oil, like regular forests, have a natural capacity to sequester emissions through its perennial leaves and closed canopy.  Palm oil plantations also have an incredible lifespan – about 25-30 years – making it a sustainable crop with a built-in carbon-cutting mechanism.

In short, palm oil is helping boost economic growth, alleviate poverty in the developing world and increase efficient land use.  Palm oil plays a critical role in developing the economies and livelihoods of both the developing and developed world.  It’s simple economics: when we help the developing world and increase our energy efficiency, we help ourselves too.  Palm oil is important for developing our future and sustaining our world.

The Oil Palm is dedicated to setting the record straight.  But we need your help.  Please sign up today and be one of the first to tell your friends about the incredible uses and contributions of palm oil.  And check back for future updates – our future is counting on you!

The Oil Palm

Malaysia Chronicle: Cooking Sumptuous Feast with Palm Oil

NGAI Wai Heng, a Cantonese, learnt to prepare sumptuous Hakka meals when she married Yee Yon Fah, the eldest son of a Hakka family.

Ngai, still living with her 90-year-old mother-in-law Thye Mooi Ying, explained that it is normal for the wife to follow and adopt the culture of the husband’s family.

The traditional Hakka reunion dishes that Ngai showcased when met in the presence of her still-discerning mother-in-law were ju geok chu (vinegar pork trotters), son pan ji (yam abacus seeds) and kao ngiuk (sliced pork belly pot roast).

Both the meat dishes that Ngai prepared are meant to symbolise abundance and prosperity.

“There is a saying, ‘yao yu, yao yuk’, which means that there must be fish and meat on the table. That is what abundance is about,” she told Business Times in Petaling Jaya recently.

“There are many popular Hakka dishes served during reunion dinners and the selection is very much each family’s taste,” said Ngai’s husband Yee.

In his family, Yee said the son pan ji is a requisite Hakka dish eaten during major festivals, especially during Chinese New Year, because of its auspicious connotation that means wealth.

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The Oil Palm

Beware cascading effects of EU energy directive

MAJOR palm oil producing countries such as Malaysia and Indonesia must be watchful for the “cascading” effects of the proposed European Union’s (EU) Renewable Energy Directive (RED) next year, warned a visiting European economist.

The EU may be the first to start on a technical regulation and methodology like its RED to address climate change, but the move, if left unchecked, could lead to similar actions by other countries.

Fredrik Erixon, who is with Brussels-based European Centre for International Political Economy (ECIPE) – a trade policy think-tank, said the RED faces the risk of running afoul of Europe’s obligations in the agreements of the World Trade Organisation (WTO).

“If the EU goes ahead and is not legally challenged by the WTO, then there would be others like the US which would also proceed with similar legislation for biofuel producers … because no one has the guts to take action,” he told Business Times in an interview in Kuala Lumpur.

European leaders are committed to a binding EU-wide target to source 20 per cent of their energy needs from renewables including biomass, hydro, wind and solar power by 2020.

Europe’s tariffs on biofuels vary. Ethanol is protected with tariff equivalents of between 39 per cent and 63 per cent. Biodiesel is less protected by tariffs as vegetable oils for biodiesel production have tariffs at 3.2 per cent.

Although the policy is targeted to reduce the use of fossil fuels and reduce emissions of greenhouse gases, it will affect the production costs as well as the trading system, he said.

“The RED effectively cuts off market access for foreign competitors of European rapeseed oil like palm oil for biofuel use in Europe,” Erixon said.

It directs the EU to adopt technical regulations and so-called process and production method standards and producers which do not meet those standards will not qualify for the excise-tax exemption or the national targets that EU member states should comply with.

Erixon said the RED is inconsistent with several articles of the General Agreement on Tariffs and Trade (GATT), the predecessor of the WTO, including that any advantage given to one product must also be given to like products.

A sustainability criteria used in the RED’s technical regulation says that the greenhouse gas saving from a new entity of biofuels entering into the EU market should be at least 35 per cent to qualify for the target and tax preference.

According to the EU’s calculation, the use of palm oil-based biodiesel from Malaysia failed the requirement as it achieved only 19 per cent, preventing it from qualifying for the incentives.

Malaysian stakeholders in the palm oil industry have urged the EU not to discriminate against palm oil.

Both Malaysia and Indonesia have expressed their intention to initiate action against the EU when it implements the directive next year.

Erixon said most countries are hesitant to bring about a dispute against the EU, which is a sizeably large market with 27-member states.

“It’s a valid point that you will upset a major client but one needs to demystify and depoliticise what a dispute in the WTO is. It can be done on the basis of legal obligations and in a fair and open manner with no retaliation of trade wars.”

In almost 600 of the disputes brought up in the WTO, he said, almost all of them were solved in a good manner and policies adjusted.

Although the EU is currently undertaking bilateral free trade agreements with several Southeast Asian economies like Malaysia, he said, they would not be a right platform as the issue could upset the entire negotiation.

Aggrieved parties can constantly bring up their grouses about the RED to the Technical Barriers to Trade meetings in the WTO before moving to the next course of action.

The Oil Palm

Malaysia’s Contribution to Low-Cost, Sustainable Energy in Hawaii

In February, the Hawaiian Electric Company (HECO) announced that it had successfully tested burning palm oil biodiesel at its Kahe Power Plant. This has been an effort nearly three years in the making, with close collaboration with Malaysian palm oil producer, Sime Darby. Unfortunately, the exercise has not been without its detractors, particularly among international environmental pressure groups that see any and all use of palm oil as an environmental existential threat.

But the success of the test at the Kahe Power Plant illustrates the importance of palm oil in its numerous applications, and its role as a low cost vegetable oil.

Palm oil was selected for use at HECO’s power plant for two reasons  it is price competitive relative to other vegetable oils, and is inherently sustainable. Nevertheless, environmental opposition has persisted, as illustrated by the defamatory claims by Rainforest Rescue, a German non-governmental organization (NGO) which is single minded in its opposition to agriculture development an d palm oil specifically.

In response to opposition from environmentalists, an editorial was published in Hawaii Reporter highlighting the importance of maintaining an overall perspective on sustainability. The editorial addressed the concerns of sustainability in the context of three pillars: People, Planet and Profits (the three Ps). Sustainability, as the definition implies, requires that all three pillars be addressed with equal weight, so environmental sustainability does not override economic and social sustainability, or vice versa.

This reflects the Malaysian Palm Oil Council’s position, a position that has been much assailed within the environmental salons of the West. However, as independent research and industry experience illustrates, palm oil is crucial to ensuring sustainable development throughout not only the developing world, but the developed as well.

When considering these three pillars, environmentalists illustrate a clear and present danger to global sustainability. The policy of no land conversion that has been a championing cause of environmentalists and is becoming enshrined in World Bank policy is a current example of putting Planet above People and Profit.

Sustainable development is a driving principle behind palm oil development. Development of the industry has assured prosperity for millions, and ensures food security for millions more. Meanwhile, expansion of the industry ensures that global demand for vegetable oils is satisfied by the most efficient oilseed available.

Opposition to the industry is misguided, and can only ensure that less sustainable vegetable oil sources replace demand for palm oil. Environmentalists should consider this fact when opposing the sourcing of palm oil. Doing so will mean not only failing to account for People and Profit, but will fail the Planet as well.

The Oil Palm

EU lawmakers to look into palm oil discrimination claims

European Union (EU) lawmakers are increasingly convinced that Malaysia is on the same path as the EU on the sustainability of palm oil production, but would need more scientific data to support Malaysia’s case.

Dan Jorgensen, who is the vice-chair of the environment, public health and food safety committee in the European Parliament, has promised to bring Malaysia’s case on its discrimination versus other oils in the Renewable Energy Directive (RED).

“We don’t want any discrimination at all of the palm oil sector, and we promised the industry here to help have discussions with the EU on this,” he said.

Jorgensen, who was in Malaysia last week with two other Members of the European Parliament (MEPs) Martin J. Callanan and Ole K. Christensen, were impressed with the work undertaken by the government and the palm oil industry and the sustainability efforts.

“People there don’t know how efficient an oil it (palm oil) is. I wasn’t aware myself how much oil you can get per hectare compared with other oils – in that way it is discriminated against,” he added.

Oil palms on the average produce 2.5 times more oil per ha than rapeseed.

According to the RED which will come into force in December this year, biofuels must have greenhouse gas savings of at least 35 per cent and according to EU’s calculation, the use of palm oil-based biodiesel failed the requirement as it achieved only 19 per cent.

“We promise to look into the discrimination (claim) and, if there is, we’ll do anything in our powers to change it. The numbers would need to be accurate and based on scientific data,” said Jorgensen.

A social democrat MEP who hails from Denmark, Jorgensen said the EU is committed to the sustainability criteria as it helps mitigate problems of greenhouse gases, climate change, global warming and also biodiversity.

“We’re happy to hear that the industry acknowledges and respects it. They have been discussing how it can become more competitive on the sustainability criteria.”

Jorgensen also suggested that the palm oil industry considers making entrapment of methane gas mandatory to increase the energy efficiency of Malaysia.
Palm oil mills are currently encouraged to trap methane gas from palm oil mill effluent.

“We are convinced that the industry has been doing a lot and we expect it will proceed to become more sustainable because palm oil is important for biofuel as well as oil for food,” he said.

The parliamentarians recognised that palm oil has been the largest contributor of wealth in the country and lends bigger potential compared to the other edible oils.

Christensen also lauded the Malaysian government and the industry for their achievements in bringing the people out of the poverty bracket and also providing employment, especially in the Felda smallholder schemes.

“Palm oil is not a bad thing as is being perceived by many people in Europe. We are gratified that Malaysia has strict laws in place to make sure no more rainforests are destroyed and expansion is on agriculture land,” said Callanan.

Callanan also does not expect Malaysia to be affected by the RED in the short term as the use of palm oil for biofuel is still very small.

Malaysia’s ambassador to the EU, Hussein Haniff, who also attended the meeting in Kuala Lumpur, said more outreach programmes were necessary to enable the EU lawmakers to be convinced that Malaysia is not clearing rainforests to grow oil palm.

There is also the tendency to lump both Malaysia and Indonesia, the top two producers of palm oil, together.

“We want an equal playing field and they are willing to take up on the verification of scientific data. From what we know, they have outdated data.

“In the process of review, if they find the default value is not 19 per cent, then it will be good for us to be on par with the other oils,” said Hussein.

The Oil Palm

EU MP’s Impressed With Palm Oil Industry’s Contribution To Malaysia’s Wealth And Economic Growth

KUALA LUMPUR, May 30 (Bernama) — European Union (EU) Members of Parliament (MPs) are impressed with the palm oil industry’s contribution towards creating wealth and economic growth for Malaysia.

Danish MP Dan Jorgensen, who is Vice-Chairman of the Environment Committee and Member of the Group of Progressive Alliance of Socialists and Democrats in the European Parliament said: “We think palm oil has contributed towards creating wealth and the growth of the country.

“As a whole, I think, it has helped take people out of poverty, which is a very positive thing.

“The challenge now is the sustainability of the commodity. Even though progress has been made, there is still the possibility of becoming better in this area,” he said after a Stakeholder Roundtable Discussion on Issues Related to Biodiversity and the Sustainability of Malaysian Palm Oil here last Friday.

Jorgensen was on a week-long visit to Malaysia together with two other EU MPs, Martin J. Callanan (Committee on the Environment, Public Health and Food Safety) and Ole K Christensen (Member of the ACP-EU Committee).

Also present at the roundtable was Malaysia’s Ambassador to the EU Datuk Hussein Haniff and Malaysian Palm Oil Council (MPOC) Chief Executive Officer Tan Sri Dr Yusof Basiron.

Jorgensen said the next decade would continue to see an increase in the focus on sustainability, as a competition criteria on the global stage, whether for fuel food or any other commodity.

“We also think that from the sustainability point of view, palm oil has great potential compared to other oils,” he added.

Many have voiced concerned concern over the new sustainability criteria in the European Union (EU) Renewable Energy Directive (RED), due to come into force from Dec 5 this year and its impact on palm oil exporting countries like Malaysia.

On that matter, Jorgensen expressed the willingness of MPs to assist Malaysia in ensuring there is no discrimination against the country’s palm oil export to the region.

“Firstly, we do not want any discrimination at all of the palm oil sector. We have promised our friends in the industry here to help them in discussions that we have in the EU on different criteria.

“If there has been any discrimination, we will do everthing possible to change it.

“Secondly, we are at the same time, very committed to the sustainability criteria,” he explained.

The sustainability criteria is related to two issues, the lifecycle greenhouse gas emissions of biofuels and the land used to produce the biofuels.

During their stay in Malaysia, the MPs had the opportunity to visit the Felda Trolak land scheme.

According to Jorgensen, the Malaysian palm oil industry can help itself by making the issues surrounding it irrelevant, by starting to trap the methane in the mills.

“It is already being done in some mills. If it was done in general and there was legislation for this, it would help. But this is just a recommendation,” he said.

Christensen also noted that in many parts of western Europe, there was the perception that palm oil is a bad thing because rainforests’ are being destroyed in order to make way for plantations.

“That’s what many people believe. So, we are very gratified to get assurances here, that Malaysia has very strict laws in place to ensure no more forests are destroyed,” he said.

He also said that it was a challenge to get this point of view across to a lot of western audiences.

When asked whether if the RED would affect Malaysian palm oil exports to the EU, Callanan said in the short term, the new directive would not.

He said this was because the amount of Malaysian palm oil used for biofuel is very small.

Callanan said only 18 per cent of Malaysia’s palm oil exports actually go to the EU.

“Obviously, we understand your concerns that the EU legislation might spread to other countries that Malaysia exports to.But only two per cent of palm oil is used for biofuels,” he added.