Why Does Norway Want to Ban Malaysian Palm Biofuels?

Not for the reasons you’d think…

Norwegian MPs have recently passed a resolution calling for Palm Oil biofuels to be banned from any and all public procurement in the country. When The Oil Palm learned of this resolution, we immediately assumed the motivation was environmental. After all, Norway has a long history of implementing environmental rules that disadvantage developing countries (despite the fact that Norway’s entire national wealth is built on fossil fuels).

However, on closer examination all is not as it seems. The usual environmental explanation may, in this instance, only be window-dressing. What lies behind it looks very much like a protectionist attempt to restrict Palm Oil imports, to prevent competition with domestic bioenergy production. Norway’s bioenergy demand is rising, and banning better-value Palm Oil imports will clear the path for domestic production to take the prize.

How does Norway plan to ban Palm Oil? The Parliament’s Resolution states –

“Parliament asks the government to as soon as possible … clarify whether there is room for Norway to enforce the EU’s sustainability requirements for all biofuels sold in Norway, or changes that can be made from Norwegian side with the aim of making the EU’s sustainability requirements applicable to all biofuels sold in Norway as quickly as possible”

This, so far, is a perfectly reasonable approach: under Norway’s EEA Agreement with the European Union, EU rules in multiple policy areas are applied within Norway. Parliament seems to be requesting that this be enforced when it comes to biofuels. So far, so reasonable.

However, the Resolution goes on to state:

“Parliament asks the government investigate whether [it can implement] … an industry agreement or similar that all sales of biofuels should be Palm Oil-free.

 And, further:

“Parliament asks the government through regulatory law on public procurement to set high standards for biofuels which … will be [higher] than the minimum requirements of the EU’s sustainability requirements and no use of Palm Oil.”

These requests are problematic – because prima facie this approach seems to contravene Norway’s EEA agreement with the EU.

The EU Commission accepts Palm Oil biofuels as a sustainable renewable energy source. This is because Palm Oil biofuels are certified by independent bodies, including the German-based International Sustainability & Carbon Certification (ISCC). For Norway to reject the EU’s rigorous and fully implemented rules on these certification systems may well be in breach of its commitment to implement EU decisions.

Why, then, is Norway focusing on Palm Oil biofuels?

There may be a domestic policy motive. Norway is planning to boost its biofuels blend levels to 20 per cent – a lucrative potential market for Norwegian biomass and ethanol producers. Biodiesel use of Palm Oil in Norway is relatively small – historically, imports of ethanol from the U.S. have been more significant. Burning wood as fuel – both domestic and imported – is also more significant than Palm Oil. However, Palm Oil’s dominance in the EU market has not gone unnoticed in Oslo – a better-priced, more-efficient alternative that could undermine Norway’s inefficient local producers.

The Resolution claims that Palm Oil is environmentally destructive, and causes deforestation, and therefore should be banned. These arguments fall flat on their face. Here are the facts:

  • Oil palm uses less fertilizer and fewer pesticides that any other oilseed crop. It is also up to ten times more productive per hectare. This means that less land is used for growing oil palm to produce biodiesel, which means more land can be preserved for nature.
  • If Norway replaces Palm Oil with other biofuel crops, it will be directly responsible for more land being used for biofuels – and that means globally less land being preserved for nature. Surely this would not be a desirable outcome for Norway’s environmental policy?
  • Studies by European experts have shown that Palm Oil biofuels are significantly more efficient and productive than other oils, and that previous EU attempts to downplay the benefits of Palm Oil have nothing to do with science – and everything to do with protecting the failing European rapeseed sector.
  • EU politicians have openly admitted that anti-Palm Oil claims are based on emotion, rather than science. The danger for Norway is that it may be falling into the same trap of prioritizing emotions over hard scientific evidence.

The Resolution also makes blanket accusations:

“The Committee points out that palm oil is a vegetable oil extracted from the oil palm tree is responsible for annual cutting and burning of vast areas of rainforest to plant oil palms.”

Again, false.

The UNFAO measures forest area in countries around the globe. Malaysia currently has over 56 per cent of land as forest area: the UN’s most recent report found that forest cover in Malaysia is increasing, not decreasing.

The Resolution should not only be looked at in the context of Palm Oil and biofuels: but also in the wider context of Norway’s membership of the European Free Trade Association (EFTA). EFTA is currently negotiating an FTA with Malaysia – a process that would surely be incompatible with Norway banning Malaysia’s largest export. It is a major gamble for Norwegian politicians to potentially risk an FTA, given that Norway is an export-dependent economy.

Norway would normally pride itself on its internationalism – the country is famous internationally for pressing other countries to live up to their environmental responsibilities. Criticising Palm Oil producers may be seen by some as part of this environmental agenda.

But is Norway living up to its own high standards, at home?

It was reported recently that Norway is preparing to dump toxic waste into pristine natural environments in its fjords, with catastrophic effects predicted for animal and plant life, and the ecosystem of the ocean itself. This does not look good, when at the same time the Norwegian Parliament is criticising Palm Oil for supposed environmental defects.

There is more to this story. Norway’s wealth as a country is built entirely from fossil fuels. In other words, “drill baby drill.” This has made the people, and the companies, of Norway extremely rich. The Parliament’s resolution is in peril of looking like a country that wants to pull up the ladder to stop poor farmers in the developing world – including in Malaysia – from also improving their incomes in the way that Norway has done in the past.  That’s very nice of Norway to do.

Norway is not the only actor here: others must also be questioned. Where is the outrage and scandal of the Green NGOs about Norway’s dumping of toxic waste? Where is the censoring from the EU Commission or Parliament? MEPs recently passed a highly aggressive (and factually inaccurate) report attacking Palm Oil – but there is silence over Norway’s dumping of toxic waste into pristine natural environments. NGOs routinely attack oil palm planters – including criticising small farmers looking to escape poverty – but they give a free pass to super-wealthy Norwegian corporates that dump toxic waste. This surely qualifies as double-standards, and most certainly smacks of Green Colonialism, and should be called out by all those who value honesty and integrity in our public debate.

The science in the Resolution, related to Palm Oil’s environmental impact, is inaccurate. The motivation is cynical. And Norway’s exporting of carbon emissions and dumping of toxic waste leaves questions about its moral and civic leadership.

The Norwegian Government should see sense, and reject the Parliament’s flawed recommendations.

#Policy News