The Oil Palm The Oil Palm

Europe’s Latest Push to Target Palm Oil Gathers Pace

Despite 2019 being an election year, the EU has continued to be in active in pushing regulations targeted at palm oil. The Renewable Energy Directive (RED) Delegated Act banning palm oil biofuels was finalised in May – it will take effect in 2021. The EU has also spent 2019 continuing its progress on the Action Plan on Deforestation, launching a Feedback and Public Consultation on how to proceed with a new Deforestation Regulation.

The summary of the findings of this consultation have now been published: and the indications are clear that palm oil will be the main target for the Deforestation Regulation.

The summary provides highlights of the 995 responses from the Public Consultation, which took place from 14thJanuary 2019 until 25thFebruary 2019.

The key question asked which forest risk commodities should be addressed by an EU initiative on deforestation. The summary indicates that “80% of all respondents selected palm oil [as a commodity that should be regulated by the EU], followed by meat (54%), soy (52%), bio-diesel (45%) and wood (34%)”

But who were the respondents who overwhelmingly voted to target palm oil? It doesn’t come as a surprise. A significant percentage of the 995 submissions came from EU Commission-funded Green NGOs who have long been anti-palm oil campaigners.

These ‘consultation’ results give the EU a perfect excuse to craft a Deforestation Regulation targeted at palm oil. Importantly, this is not only about biofuels (like the RED). This Regulation would target all palm oil imports, including for food production.

Why, then, is the EU pushing this?

First, it appeases the Green lobby. The Commission will claim that the majority of the ‘public responses’ are in favour of action against palm oil – though in reality it was not the public, but rather EU funded anti-palm oil NGOs who drove this result.

The science is ignored, even though many studies including the EU’s own research, have shown that livestock/beef, maize and soy are the biggest drivers of deforestation.

Second, this will appease the European Parliament. In 2018 and 2019, MEPs Heidi Hautala (Green) and Katerina Konecna (Communist) – both of whom were re-elected in May 2019 – led the charge with Reports pushing anti-palm oil regulation, and further putting pressure on the Commission to act. The Greens gained seats in the May 2019 elections, and others (especially the Liberals) have moved towards Green positions. So – the Commission is ready to move on key Green MEP priorities, such as restricting palm oil.

Third, by focusing on palm oil, the EU avoids attacking Brazilian/US Beef and Soy, who are the real drivers of deforestation. This will ensure the EU avoids a trade war with its ‘historical allies’, and continue to appease President Trump in an attempt to avoid imposing tariffs on cars, Airbus and other EU goods.

Finally, this move paves the way for the EU Member States to help their domestic oilseeds industry which is less efficient and less competitive than palm oil. It will only be imported oils and products that are targeted – again, despite the evidence that shows that Malaysia’s forest protection track record is substantially better than any country in Europe.

In listening to the voices at the fringes of the palm oil debate, though, the Commission will risk hollowing out the mainstream, and alienating allies in Asia and other parts of the developing world.

Trade agreements will suffer; that impacts jobs, growth, and exports. Alliances and strategic partnerships in southeast Asia especially, will not grow – meaning the EU falls further behind in its political influence and trade weight in that region. The possibility of retaliatory action against EU exports to ASEAN would exacerbate these issues – Malaysia and Indonesia have both made clear publicly that they will not accept discriminatory regulation of their main export.

Malaysian Palm Oil Council (MPOC) CEO Datuk Dr Kalyana Sundram confirmed that the Malaysian Government and its negotiating parties “are leaving our options open at this point. We would prefer to go down on a negotiated route and come to terms and conditions that all parties agree to before we take any action.Trade is a two-way negotiation…we are looking at the best possible ways that are based on scientifically proven facts and figures. The producing nations have indicated that they would be taking likewise trade-related activities against EU imports”.

Yes, some Greens and other fringe voices have made electoral gains in Europe – and they have more clout as a result. Some of these are loudly anti-palm oil voices (including Bas Eickhout MEP, for example). But the Commission is on very uncertain ground – scientifically, diplomatically, and economically – if it begins to craft a palm oil policy based on those fringe voices, instead of the sensible and moderate majority who understand the EU’s true strategic interests.