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Monday, 07 May, 2018

EU locked in a trilogue on new biofuels directive

Palm oil is an extremely efficient crop, producing up to 10 times more oil than other oil crops per unit of cultivated land. FILE PIC

The use of palm oil in food and biofuels has come under renewed scrutiny in recent weeks. The European Union through its Commission and Parliament are currently locked in a trilogue on a proposed new biofuels directive, which if some Members of the European Parliament have their way would ban the use of palm oil in biofuels.

In April, one of Britain’s smallest supermarket chain announced that it would stop using palm oil as an ingredient in all its own label food by the end of this year.

Indonesia and Malaysia account for 86 per cent of global palm oil production, while India, China and the EU account for 38 per cent of consumption. Because the palm oil industry is a major revenue earner and employer, Jakarta and Putrajaya are watching the EU biofuels directive developments and antics of some companies with some frustration.

The issue of the use of palm oil in foodstuffs is not as simple as it is sometimes suggested. While critics against the use of palm oil in food say that they are against it because of its perceived destruction of rainforests to make way for plantations, it is implicit in the discourse that some of this opposition is highly political.

There have been cases of illegal clearing of forests, which has resulted in illegal palm plantations, which probably will continue given the logistics of policing vast swathes of land and due to policy deficits. But, there is no doubt that sustainable palm oil production and certification dominates the industry, albeit remains a work in progress and deserves the support from governments, multilaterals, food manufacturers and processors, retailers, NGOs and consumers, instead of the opprobrium and cynicism it has routinely tended to draw.

In the past, palm oil bashing used to be from the soya bean lobby and association in the United States, which made spreading rumours of the dangers of palm oil to one’s health a national pastime. In reality it was a malicious attempt at a new form of trade protectionism aided and abetted by the powerful soya lobby, farmers and politicians dependent on constituency votes and political donations.

I remember covering the palm oil industry in the 80s and 90s. The mantra was that palm oil was high in cholesterol and therefore bad for your heart. To its credit the Malaysian-funded UK-based Palm Oil Research Council played a vital role in refuting such rumours and pushing the nourishment virtues of palm oil and its versatility as a food additive.

Such opposition to palm oil is history, but it has been replaced by a new intolerance masquerading as environmental protection, which sees the issue as a zero sum phenomenon, instead of facilitating a discourse under the sustainable development agenda, which leverages technology, advances in agri-science and agribusiness, rural communities and job creation.

Here, the stance of the British supermarket chain is revealing. The decision to remove palm oil from its own label is because of the perceived rainforest destruction and not on health grounds.

The good news is that other than one in Austria, no other supermarket including the big four in the UK have plans to follow Britain’s small supermarket’s lead.

The irony of palm oil’s efficiency as a crop (and therefore its associated environmental impact) could not be lost by the fact that palm oil is the world’s most widely traded and versatile vegetable oil. According to one of the big four British supermarket spokesperson, “palm oil is an extremely efficient crop, producing up to ten times more oil than other oil crops per unit of cultivated land”.

The spokesman however acknowledges that as the world population increases, global demand for vegetable oils, including palm oil is also expected to grow, placing considerable pressure on the world’s forests and other native habitats. But, it is convinced that “palm oil has the greatest potential to meet the growing global demand for vegetable oils with the least amount of land than any other oil crop.”

The main substitutes for palm oil in food is rapeseed oil, sunflower oil and butter – all of which come with their own environmental baggage.

There is some consensus that the palm oil industry needs to addres sustainable production so that it can ensure any future expansion protects forests, peat lands and other native habitats, and should engage all stakeholders from large plantation companies to small-scale family farmers, governments, local communities and NGOs.

This, says one British top four supermarket spokesman, can be achieved through sustainability certification, although the challenge is that certification standards need to be continuously strengthened. Additionally, smallholders, who represent 40 per cent of global production, must be supported to transition to sustainable production, and producers and supply chain customers need effective forest governance. The onus is on both producing and consuming nations to be enablers.

The writer is an independent London-based economist and writer.

Source : New Straits Times

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