The Oil Palm The Oil Palm

This Week EU Experts Visit Malaysia: What’s at Stake?

Today, an EU Expert Group will arrive in Malaysia to begin a ‘fact-finding’ mission about Palm Oil. The European delegation will be led by Paula Abreu Marques, Head of Unit for Renewable Energy in the EU Commission’s Energy Directorate, and is expected to include EU technocrats dealing with environment, energy, and agriculture. The delegation is planning to visit oil palm plantations, and to conduct meetings with Malaysian leaders of government, businesses, and NGOs. The stated intention is to gather information to help inform the EU’s forthcoming decision on which biofuels are ‘risky’.

There is one question, above all, that matters: is this visit just for show or is it a serious fact-finding mission? Concerns amongst Palm Oil producing countries run deep. The EU Parliament has stated many times, publicly, its desire to ban Palm Oil biofuels from Europe. Its members have stated publicly that they see this ILUC/HCS/Deforestation Criteria process – the process including this week’s visit – as the path to achieving their objective of banning Palm Oil biofuels.

According to Reuters: “Green lawmaker Bas Eickhout, one of the negotiators in tough talks that ran until the early morning, said the use of palm oil would be capped at 2019 levels until 2023 and reduced to zero by 2030 [as a result of the ILUC/HCS/Deforestation criteria process]. That is quite a victory …’ said Eickhout”.

Furthermore, the EU Ambassador to Indonesia and Brunei Darussalam Mr. Vincent Guérend said recently “Provided the country succeeds in ensuring sustainable palm oil supply chains, we would be willing to reconsider the commodity’s eligibility in the EU market after 2030.”

In other words, has the political decision already been taken in Brussels to classify Palm Oil as ‘risky’?  If so, the Expert Group, and the fact-finding visit, would then appear to be part of such a ‘just for show’ process. The ultimate regulatory vehicle for this process appears to be new ‘Deforestation Criteria’ in which Brussels would count both ILUC and HCS factors as well as specific new elements that would discriminate against Palm Oil – but would not harm rapeseed or sunflower that hail from Europe. The justification – that deforestation in Europe happened so long ago that we shouldn’t count it, but Africa and Asia should be punished for any agricultural development – will be highly unpopular across the developing world.

The EU is aware of the skepticism in producing countries. The EU Ambassador to Malaysia, Maria Castillo Fernandez, released a highly defensive statement that revealed the EU’s true intentions.

Ambassador Castillo Fernandez claimed that in relation to EU biofuels policy “Everything is still open” and that in terms of a ban or restriction “… it can be any crop. But it’s better for the [EU officials] who are going to work on this to come and see for themselves”. Ambassador Castillo Fernandez failed to mention that no other crop has been singled out by the EU for discriminatory treatment time and time again. No other crop was the subject of an attempted blanket ban this year. And no EU Expert Panel is currently visiting France, or Belgium, or Italy, to inspect rapeseed and sunflower crops. Is everything really still “open”? Is it really “any crop”, or is the EU focused on only Palm Oil?

Looking ahead to February 2019, it is important to place this week’s visit in context. Some of the delegation no doubt have a genuine interest in the science and study of biofuels, and will use the meetings and site visits to learn more about Palm Oil. However, the reality is that the individuals travelling to Malaysia this week are not the final decision-makers. The decision will be made by the EU’s political institutions.

In the past 18 months alone, the EU Parliament has 9 times voted to ban or restrict Palm Oil exports to Europe. It was only a major campaign led by Malaysia that prevented the EU Parliament from banning Palm Oil biofuels altogether in July 2018. It’s worth noting that a protest in front of Ambassador Castillo Fernandez’s embassy in Kuala Lumpur – by thousands of Malaysian small farmers – was the catalyst for defeating the proposed EU ban.

How could the EU convince Malaysians that the ILUC/HCS/Deforestation Criteria process is genuine – and not part of a pre-ordained effort to ban Palm Oil?

The obvious answer is a public statement committing to no EU restrictions against Palm Oil. This is not an outlandish idea. In fact, this was the approach taken by the French Government in recent years. Then-Prime Minister, Jean-Marc Ayrault announced in 2013 that France would not discriminate against Palm Oil imports; Deputy Defence Minister Florence Parly confirmed this in 2018.

Such a public statement would also be the right economic approach to its trading relationship with partners in south-east Asia. A report commissioned by MPOC from the esteemed Danish consultancy Copenhagen Economics showed that the EU exported over 39 billion EUR of goods and services in 2017, to three leading Palm Oil producing countries (Indonesia, Malaysia & Thailand). The report demonstrates that major aerospace, automobile, electronics, pharmaceutical and food industries across Europe depend upon exports to this Palm Oil producing region.

Will there be a public statement this week, to reassure Palm Oil producing countries? Let’s see. If the EU is serious about not harming Palm Oil biofuel exports then it needs to say so clearly, and publicly. This week is the perfect opportunity.