The European Union Renewable Energy Directive (EU RED) and its sustainability criteria will not affect Malaysia’s palm oil exports to the EU market for consumer products like food, cosmetics and detergents, according to ambassador and head of the EU delegation to Malaysia Vincent Piket.

While he understood the growing concerns among local palm oil producers on the impact of the EU RED coming into force on Dec 5, Piket said the EU would not block Malaysian palm oil exports there and there would be no new tariffs, quotas and restrictions.

Speaking on the last day of the Oils and Fats International Congress 2010 yesterday, he said: “The EU RED is exclusively for trade in biofuels mainly pertaining to the sustainable criteria feedstock meant for our energy and transportation sector.”

The sustainability criteria are related to two issues – the life cycle greenhouse gas (GHG) emissions of biofuels and the land used to produce the biofuels.

“Since 90% of Malaysia’s palm oil exported to the EU are for making consumer products with little usage in biofuels, I believe local palm oil are not badly affected by the new EU rules,” added Piket.

Having said that, Piket said the EU would not penalise biofuels which did not meet the criteria which could still be imported and marketed in the EU.

However, biofuels without the sustainability criteria would not receive tax exemptions, subsidies or other incentives from the EU 28-member states, he added.

The directive sets up the key elements of the EU’s renewable energy policy, notably:

• Mandatory national targets for each member state with the aim of achieving a 20% share of renewable energy in Europe’s final energy consumption by 2020;
• A specific binding target of 10% renewable energy in transport for 2020; and
• A sustainability scheme for biofuels (in transport) and bioliquids (for electricity and heating/cooling).
  On palm-based biodiesel, Piket said the general default value for palm oil defined in the EU directive was 19% (savings of green-house gas emissions as compared with fossil fuels) which was below the 35% threshold for eligibility set in the EU RED.

However, this does not mean that biodiesel from palm oil cannot fulfil the criteria,” he added.

“All local suppliers need to do is to show the data supporting that their biofuels have a greater GHG savings than the threshold value and they will be eligible,” said Piket.

He also noted that the EU recognised Malaysia’s plantation sector sustainability efforts as well as appreciated the sustainability certification of palm oil in the framework of the Roundtable on Sustainable Palm Oil.

Source: The Star