The Oil Palm

The Facts About Palm Oil Biodiesel

Transport and Environment (T&E), the radical left-wing NGO, last week launched a new campaign to remove Palm Oil biodiesel from the European marketplace.  T&E launched the supposed ‘exposé’ of the amount of Palm-based biodiesel in Europe. The ‘shocking truth’ of what Transport and Environment revealed was that Palm-based biodiesel use in Europe had increased over the past five years.

The timing of their campaign was curious.  In the last few weeks, a new report by ECOFYS was launched, using questionable data and pre-set assumptions to attack palm oil’s role in the EU biofuels market. This was a transparent attempt to smear palm oil biodiesel – and the baton has now been picked up by T&E.  A quiet campaign by Green NGOs has been underway for months aimed at asking the EU to introduce discriminatory and exclusionary criteria against Palm Oil biodiesel. Now, it is going public.

However, there are some significant problems with the T&E claims.

First, they exaggerated the numbers, and did it through some deliberate omissions and selective use of data. T&E claimed that all of the growth in the EU biodiesel market between 2010 and 2014 came from Palm-based biodiesel. They did this using some interesting qualifiers. They refer only to fuels based on ‘first generation vegetable oil’. This leaves out two other important growth areas: recycled oil and animal fats. Why is this significant? Because growth in the use of recycled oil is as significant as the growth of Palm Oil feedstocks, growing to roughly the same share in 2014 – see the graph below.

T&E also claim that the growth in Palm Oil biodiesel over the period has been around 606 percent. The accuracy of these figures has been disputed by FEDIOL, the European vegetable oil association.

The US Department of Agriculture figures – generally considered the most accurate of all – indicate that growth in the period was about 300 per cent. That’s either a reasonably large error from T&E, or a deliberate distortion of the facts in order to suit their preferred narrative.

Type of oil / Year 2009 2010 2011 2012 2013 2014 2015 2016
Rapeseed oil 6,300 6,700 6,600 6,150 5,770 6,170 5,970 5,970
Recycled vegetable oils (UCO) 330 500 750 840 1,280 1,610 1,650 1,670
Palm oil 550 690 700 1,050 1,640 1,620 1,630 1,620
Soybean oil 1,000 1,085 1,000 685 850 850 855 855
Animal fats 350 300 340 360 415 440 485 485
Sunflower oil 170 140 240 260 265 280 285 290
other (pine oil) 0 0 80 140 145 180 185 190
TOTAL 8,700 9,415 9,710 9,485 10,365 11,150 11,060 11,080

Screen Shot 2016-06-16 at 09.57.57

Second, the next significant problem revolves around the ‘scandal’ of the growth in Palm Oil, as perceived by T&E.

T&E maliciously implies that the Palm biodiesel used results in the destruction of rainforests. But groups such as T&E – as well as other NGOs and competing vegetable oil producers – went out of their way in Brussels to lobby for so many restrictions on the use of Palm in European biodiesel programs that it seemed at several junctures that Palm would be excluded from European biodiesel completely.

The reason it has not been excluded? The reason is because Palm Oil has proven itself able to meet these environmental restrictions – to the extent that Palm biodiesel is still capturing a significant percentage (around half) of growth in the EU biodiesel market.

It’s important to note that the EU restrictions, lobbied for by T&E and their friends, are being challenged by both Argentina and Indonesia in the WTO.  And the Americans have made it clear to both Washington and Brussels that there will no Trans-Atlantic trade deal should Europe discriminate against US soy-based biofuels.

These restrictions – already in place – are unlikely to be the last. It is an open secret in Brussels that T&E and other Green NGOs have been lobbying the EU very hard to bring in even more restrictions on Palm Oil when the revision of the Renewable Energy Directive (RED) begins in late 2016. It is clear from the calculated media campaign last week that the only result that will satisfy the Green lobby is a full exclusion of Palm Oil from the European marketplace. This is both utterly predictable and totally dishonest.

A simple assessment would show that there are strong reasons why Palm Oil is successful in the European market. It is the most efficient oilseed crop anywhere in the world – orders of magnitude more efficient than rapeseed or sunflower.  It is vastly more cost-effective than European alternatives, leading to lower prices for European companies and consumers. And, importantly, Palm Oil has proven it can meet the environmental standards placed upon it by the EU.

Third, T&E chooses only to focus on palm oil – with no mention of the fact that more than half of biodiesel use in the EU still relies on rapeseed oil, as shown by the US Department of Agriculture figures. Instead of unjustified attacks on palm oil – responsible for only 15% of the market – NGOs should be concerning themselves with the dominant (but far less efficient) rapeseed industry.

To our friends in Europe, we are monitoring carefully and aware of your campaign.  Let’s be clear: Palm Oil benefits European consumers because it is the most cost-effective, land-efficient oil crop. Palm Oil also helps Europe’s relations with South East Asia, and the EU can ill-afford to continue discriminating against our interests.