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
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.

The Oil Palm

Malaysia’s Green Jobs Program – Palm Oil Biogas Plants

Lessons are emerging from Malaysia that the West should consider in their drive for “green jobs”, particularly from the Malaysian palm oil industry. Last year, with the release of Malaysia’s National Key Economic Areas (NKEA), the Government identified the sector as a key contributor to economic growth and wealth creation, as well as a source for reducing emissions and meeting the country’s international climate obligations.

Most recently, the New Straits Times reported on activities in Malaysia by Malaysian palm oil companies to construct biogas plants to utilize waste from the processing of oil palm fresh fruit bunches. The waste is able to be converted into energy for facilities and local communities, while also producing organic fertilizer for the plantations. And in the process, emissions from oil mills, the largest source of emissions from the production of palm oil, are reduced to almost nothing. Meanwhile, the biogas produced has allowed mills to reduce the use of fossil fuels by 25%.

Malaysia’s NKEA calls for more than 500 such plants to be constructed by 2020 – a goal that the industry is currently poised to exceed with more than 46 plants already in operation, 22 under construction and another 46 in the planning stage. These plants are expected to add RM2.9 billion to Malaysia’s gross national income and employ an additional 2,000 people. But the real value of these plants is the value they add to oil palm waste and the sustainable practices that they encourage, with over 160,000 producers standing to benefit.

The Malaysian palm oil industry is moving forward, positioning itself as a leader in sustainable, “green” industries. And Malaysian’s are prospering as a result.

The Oil Palm

Sustainability in a Global Context: Falling Global Deforestation and GHG Emissions

A recent study to assess the potential carbon emissions from palm oil in Indonesian Borneo, known as Kalimantan, has no bearing on the sustainability of Malaysian palm oil industry. Indonesia and Malaysia may share some geographical and cultural similarities. Both are located in South-East Asia, and both are major palm oil producing countries. Both face challenges to achieving national development, and both seek to improve living standards for citizens.

But Malaysia and Indonesia operate differently, with different political institutions, environmental regulations, and industry participants. As a noted orang-utan expert recently highlighted, in some areas the Indonesia-Malaysian border marks a significant environmental divide.

In Malaysia, the industry works with authorities, civil society, and smallholders to ensure environmental outputs are maintained. The Malaysian industry should not be held accountable for practices in other national jurisdictions, no matter where they are located.

At the same time Malaysia does not shy away from addressing complex environmental issues through global initiatives. Malaysian efforts have contributed to decreasing rates of global deforestation. The UN Food and Agricultural Organisation (FAO) assessed the net change in global forest area to find that deforestation over the last decade decreased by approximately 37% from the previous decade. Deforestation rates in Indonesia dropped by around one-third between 2005 and 2010.  In absolute terms, deforestation in Malaysia is about one-eighth of that in Indonesia.

At the same time, potential carbon emissions from deforestation have been downsized. Studies by Winrock International have concluded that emissions from tropical deforestation may account for as little as 7 per cent of total global anthropogenic emissions – maybe even less. This is under half the value that some NGOs attribute to deforestation.

Malaysian industry operates responsibly and sustainably. Given the falling rates of deforestation and downscaling of carbon emissions from deforestation, the industry should be recognized for its role in sustainable development. Yet some campaigners have leveled accusations against the Malaysian palm oil industry based on studies that assess industries outside of the country.

The Malaysian palm oil industry in particular has been a crucial driver of growth and development for the region. These accusations ignore the sustainable and productive land and environmental management practices that have helped alleviate poverty – and the achievements made in Malaysia to establish a global leader in sustainable agriculture production.

The Oil Palm

International Land Use Not Reflective of Malaysian Land Management Sustainability

A recent study has sought to quantify the potential emissions that would result from palm oil plantation expansion in the Indonesian region of Kalimantan. Campaigners have been quick to use the findings to condemn the industry across the board including Malaysia, despite the fact that the area of study was located in Indonesia – a separate country with its own political system, laws and regulations.

Conflating Malaysia with other countries such as Indonesia lacks scientific and legal rigor.  For environmental management to be effective, policies must address local drivers and issues specific to the local and national context. Jurisdiction is therefore much more important than these campaigners would like to believe.

Malaysian industry operates under a rigorous regulatory framework, enforced by relevant authorities. Plantations are developed on lands long zoned for agricultural production, constituting carbon sinks rather than emissions and expansion frequently replacing less efficient plantation agriculture.

The study was based on the assumption that all lands in Indonesian Borneo currently leased for palm oil plantations will be converted, and lead to significant forest clearance. But such assumptions are not relevant to the Malaysian context, given its sustainable land management and allocation practices.

Currently, around 24% of Malaysian land area is being used for agricultural production. At the same time, the FAO estimates that Malaysia has protected approximately 5.16 million ha of forests, representing 28.2 per cent of its total forested land or 15.7 per cent of total land area.

Most of Malaysia – about 63% – is still covered by forest. Agricultural expansion is needed for food production and economic growth, but is carefully planned and permitted only in areas assessed as appropriate through national regulations. Malaysia’s land use and zoning system ensures that oil palm is planted on land previously allocated for agriculture, and as such, carbon emissions from deforestation are minimised.

It is well-recognised that Indonesia’s land tenure system is one of the key drivers of illegal logging and deforestation in that country.

Malaysian oil palm plantings have increased over the last decade, but much of this expansion has occurred on former rubber and cocoa plantations and other abandoned plantations.

Strict land management practices in Malaysia ensure that carbon emissions from the agricultural sector remain low – even to the extent that the Malaysian agriculture sector offsets emissions from the oil and gas sector. The policy is not only environmentally sustainable, but also a productive use of natural resources and land for economic development.

The Oil Palm

New pest detector will protect small farmers of palm oil

Researchers led by Professor Richard Cooper at the University of Bath have developed a new technique to detect a strain of a fungal disease – called Fusarium oxysporum – which is specific to oil palms and which has had a devastating effect on yields.

Using a technique known as genetic fingerprinting, these scholars have pinpointed the specific strain that causes the disease in oil palm trees. As a result, they have been able to screen seeds, destroying those infected before they are exported and used in the field.

As Professor Cooper has said, such diseases represent a major threat to the livelihoods of growers and it is fundamental that everything is done to address reductions in yields of oil palm as it continues to play an important developmental role by helping to lift “many small growers out of poverty”.

The screening process for fungal diseases still needs to be refined in order to make it accessible and easy to use outside controlled environments. One only hopes that this breakthrough happens sooner rather than later. Any contribution to enhancing durable and sustainable solutions that help address global food security must not be delayed especially as close to 1 billion individuals around the world continue to struggle to get enough to eat.

The Oil Palm

Malaysian Palm Oil Council Rebukes Proposed French Palm Oil Tax

A statement from the Malaysian Palm Oil Council Chief Executive Officer Tan Sri Dr Yusof Basiron on the proposed ‘Nutella Tax’ offered by French Senator Yves Daudigny:

“Malaysia is deeply concerned with French Senator Yves Daudigny’s proposed 300 per cent tax increase on palm oil. The proposal is based on inaccurate claims that palm oil is bad for health and nutrition, and that Malaysia does not respect the environment. Palm oil is a healthy, natural and important product which 240,000 small farmers in Malaysia are proud to produce.

“Contrary to Senator Daudigny’s comments, every nutritional and food expert concludes that palm oil is in fact free of dangerous trans fats, free of GMOs and contains valuable vitamins.  A study from Fonds Francais Alimentation et San finds that replacing palm oil is a bad option for French consumers, potentially leading to a rise in the level of trans fat consumption.

“It is important that allegations or claims made about palm oil as high in saturated fat are assessed in relation to the total fats consumption of the French population. The majority of saturated fats consumed in France comes from animal sources – from meat, milk, cheese and butter – not from palm oil. The Senator’s proposal to deny palm oil its rightful place in food manufacturing will not only be an economic and functional opportunity loss to industry, but also for the French people if they involuntarily consume worse alternatives such as hydrogenated (high trans fat) sunflower or rapeseed oil. The French consume about 101kgs of meat per person per year with an average of 15kgs of saturated fat content. Milk consumption per person is 92.2 liters containing 4kgs of milk fats which belong to the saturated fats category. Cheese has 30% animal fat content and the French are well known to consume 24kgs of cheese per capita, which provides 8kgs of saturated animal fats. Butter consumption is 7.3kgs per capita which is 100% saturated animal fats. If we were to add this up, the total animal saturated fats from milk, meat, cheese, and butter per person per year is 34.4kgs. In comparison palm oil consumption per capita in France is only 2kgs.

“Malaysian palm oil has a proven track record on efficient land use and conservation. Malaysia has over 50 per cent of its land committed to forest cover, and has designated just over 24 per cent of total land area for agricultural purposes. In contrast, forest area in France covers just 28 percent of total land area – but agricultural land covers over 50 per cent of total land area. Palm oil yields 4.13 tonnes of vegetable oil per hectare, or 10, 7 and 5 times the yields of soybean, sunflower and rapeseed, respectively, and occupies less than 5 per cent of land under oilseed cultivation.

“The action taken by French Senator Daudigny, to propose onerous new burdens on palm oil producers, is irresponsible, badly-informed and ignores the primary source of saturated fats in the French diet. Not only will the legislative proposal hurt local business communities in France, which have opted to use palm oil for its superior economic and functional attributes, but the attack comes after the start of talks by Malaysian palm oil representatives with French leaders, industry and civil society to work together to correct misperceptions about palm oil. Over 240,000 small farmers across Malaysia depend on palm oil for their livelihood. In addition to this, many thousands of other jobs in Malaysia depend upon related industries. Senator Daudigny’s actions jeopardize the livelihood of these farmers.

“We call upon the French government to reject the proposal by Senator Daudigny. Senator Daudigny’s proposed tax is part of an aggressive and unprovoked attack against palm oil. Instead, Senator Daudigny should focus his efforts on all saturated fats.

“This campaign has already been the focus of a complaint by small farmers in Africa and Malaysia. These actions will significantly undermine the competitiveness of the French food industry – domestically and globally.

Malaysian Palm Oil Council (MPOC)

The Malaysian Palm Oil Council (MPOC) aims to promote the market expansion of Malaysian palm oil and its products by enhancing the image of palm oil and creating better acceptance of palm oil. The MPOC helps to improve the understanding of the strengths and benefits of palm oil in terms of nutrition, socioeconomic development and sustainability, as well as its ubiquitous and necessary presence in our daily lives.

The Oil Palm

India’s growing demand for palm oil offers wide-ranging development opportunities

Global demand for vegetable oils is expected to more than double to 230 million tonnes by 2021, driven largely by developing world demand. In India – the world’s largest palm oil importer  cooking oil imports are forecasted to surge 44 percent over the next eight years.  Indian consumption of cooking oils is projected to jump to 23 million metric tons by 2020 from 16 million. The bulk of increased demand is expected to come from imported oils, especially palm oil imports.

This will have significant implications for the Malaysian industry. Malaysian exports of low cost and healthy vegetable oil can assist India meet some of its nutritional requirements. Fats are a vital component of a healthy diet. According to D. Bhalla, a joint secretary in the India’s Food Ministry, per capita consumption of edible oils in India is approximately half that of the global average.

India currently suffers from some severe nutritional deficiencies. An increase in the consumption of some healthy vegetable oils may improve this in some instances. For example, palm oil has been proposed as effective supplement to combat vitamin A deficiencies in India that can lead to blindness.

NGOs like Greenpeace have recently focussed attentions on India, campaigning to restrict the entry of palm oil by promoting outlandish claims against the industry and advocating for trade restrictions against palm oil imports.

Western NGOs are effectively arguing that India’s nutritional deficiencies should come second to sensationalist environmental claims. The message from the NGOs is simple: inexpensive nutritional food supplies are bad for the planet  and India’s poor should carry the burden.

India’s consumers should ignore these campaigns. India is still home to around 25 per cent of the world’s hungry poor according to the FAO. Roughly 43 per cent of children under the age of five years are malnourished. This is what India should be paying attention to not Western activists.

The Oil Palm

US Government environment agency visit Malaysia

The US Government’s Environmental Protection Agency (EPA) recently concluded a visit to Malaysia as part of their assessment of greenhouse gas (ghg) savings from palm oil based biofuels. The final assessment will inform the decision of whether palm oil derived biofuels meet sustainability requirements under the US renewable fuel standard.

The field visit to Malaysia comes after complaints that the EPA initial assessment could not be scientifically substantiated.

Biodiesel produced from Malaysian palm oil is both a sustainable and cost effective renewable energy source. Malaysian palm oil plantations represent a net CO2 sink. Biofuels produced from Malaysian palm oil constitute a sustainable energy source with significant ghg emissions savings.

The Malaysian industry has grown substantially over the last 20 years. Much of this expansion has occurred on land zoned for agriculture, degraded lands, or previous rubber and cocoa plantations.

As a result, ghg emissions from forests cleared for palm oil plantations is relatively small. Especially compared to Malaysia’s vast forest resources: around 60 per cent of Malaysia is still covered by permanent forests, and almost 20 per cent is covered by plantation tree crops. In total, approximately 80 per cent of the country is under tree cover.

At the same time, Malaysia is a developing country pursuing higher living standards. The palm oil industry contributes significantly to achieving this goal, particularly by driving rural development amongst small scale farmers. There are around 700 000 palm oil smallholders in Malaysia.

The market for biodiesels is important driver behind the success of the Malaysian palm oil sector. Malaysian biodiesel output is expected to double in 2013. However these market forecasts, and their associated economic benefits to national development, could be threatened if key export markets do not accurately recognise Malaysian palm oil derived biofuels as a sustainable source of renewable energy.

The Oil Palm

New Report Fails Palm Oil Producers and Food Security

Misleads European Community too with false information about the palm oil industry

Activists and industry competitors have gone to great lengths to mischaracterize the palm oil industry. A critical source of healthy calories for the world and a potential source for sustainable low-carbon energy, critics have consistently placed self-interest above the needs of developing world communities and global food security.

Unfortunately, a recent report released by the Stockholm Environment Institute (SEI) illustrates yet another attempt at denigrating a global industry, while mischaracterizing EU policy that has harmed communities throughout the world.

The report, released at European Development Days, accuses the EU’s Renewable Energy Directive for driving expansion of palm oil plantations. However, analysis released by the International Food Policy Research Institute (IFPRI) found that expansion is being driven by increasing demand for food, not European energy demand.

Meanwhile, the report’s assertion that palm oil is a main source for biodiesel ignores the fact that 6 million hectares of rapeseed in Europe is devoted to biodiesel, 1 million more hectares than Malaysia’s entire palm oil sector.

Rather than promoting policy prescriptions that benefit local communities in Malaysia and throughout the developing world, the SEI authors are advocating for policies that would restrict food production and poverty reduction. In Malaysia, innovation is driving the development of biomass based energy sources, a carbon neutral solution that would ensure that more palm oil is directed to food uses.

While expressing concern for the needs of developing world producers, the SEI report risks undermining the very industry that offers a solution to food and poverty challenges throughout the developing world. In Africa and Latin America, communities are looking to Malaysia to emulate our development model – while decrying European trade policies that limit market access and distort agriculture trade. Unfortunately, this fact is ignored in SEI’s report – as by many supporters of European protectionism.

The Oil Palm

MPOC Letter to the Editor of New Zealand Herald – Boycotting Palm Oil Harms Producers and Consumers

The Editor
The New Zealand Herald
Dear Sir,
The Malaysian Palm Oil Council applauds teenager Ben Dowdle for promoting a cause he believes in (‘How to Avoid Palm Oil’). However, the Herald’s coverage provided a biased view of palm oil that warrants a counterpoint.
The article implies that palm oil production is bad for the environment; and that banning palm oil would be positive.
But consider the benefits of palm oil. Palm oil is a vital vegetable oil for consumers. In the US where all vegetable oils are labeled (no discrimination), palm oil imports have risen significantly. Products containing palm oil are promoted for their cholesterol lowering properties. In Malaysia, the industry supports environmental conservation, and preservation of 56% of Malaysia’s forest, (New Zealand protects 31.2%) and offers sustainable palm oil to buyers.
Many Malaysians do not have the luxury of campaigning in the media – their daily concern is how to feed their family. Palm oil provides incomes for 500,000 family farmers in Malaysia and has helped millions out of poverty. Boycotting palm oil will hurt these people. It will not end poverty or deforestation; it will exacerbate it.
Master Dowdle is aged 17: he cannot be expected to be aware of these complexities, but the Herald should have a more informed view of the world.
Yours sincerely,
Dr Yusof Basiron
Chief Executive Officer
Malaysian Palm Oil Council