The Council of Palm Oil Producing Countries Urges the EU to Adopt a Biofuels Policy That Will Provide Realistic Solutions Towards the Decarbonization of Energy

The Council of Palm Oil Producing Countries (CPOPC) urges the European Union (EU) to revise its approach on vegetable oils in biofuels under the framework of the Renewable Energy Directive II (RED II) in light of the upcoming revision of the Directive expected on 14 July 2021 as well as the Commission’s approaching deadline for adopting rules on certifying low indirect land-use change (ILUC)-risk biofuels and updating the list of high ILUC-risk feedstocks.

The use of ILUC as a policy tool has been fraught with methodological problems and biases from the beginning. Therefore, a new approach, which treats all sustainable vegetable oils equally, based on verified production practices and not on the type of commodity, is urgently needed. After all, commodities in themselves are not responsible for deforestation – it is the practices that matter.

Palm oil has been singled out as damaging to the environment based on a comparison study that used 2008-2016 as a gauge for ILUC. This timeline discriminates against countries that were late in development whose growth during that period affected Land Use Change.

The CPOPC argues that a proper timeline for the sustainable development of palm oil producing countries including Indonesia and Malaysia should start from post-colonial times. A new expansive study on Land Use Change by Nature tracked Land Use Change from 1960-2019 and identified 43 million Km2 from the Global North to the South. Estimates on palm oil cultivation globally puts it at a mere 250,000 Km2.

Further evidence of the EU’s bias against palm oil lies in its analysis of Annual Net Increase of Harvested Area 2008-2016 which highlighted palm oil as the highest at 4%. This puts palm oil at the highest risk of ILUC if one only looks at the percentage.

It must be noted that the same analysis showed considerably larger land footprints of other vegetable oils. Palm oil started at a base point of 15.369 kha while rapeseed and soy started at 30.093 kha and 96.380 kha respectively. The EU analysis granted rapeseed an annual net increase of 1%.

This is a clear distortion of facts. Had palm oil producing countries developed at the same pace as rapeseed producing countries, palm oil would have shown a 2% increase instead of 4%. The most apparent distortion of facts is in granting soybean 3% based on a start point and annual increase of harvested areas that is more than four times larger than palm oil.

Seen in this perspective, the CPOPC argues that the energy yield per hectare of land used for biofuels must be included for fair analysis. Scientific research has shown that palm oil has an energy efficiency of four times that of rapeseed or soy. Once this knowledge is applied to the EU analysis on land use of vegetable oils, it would place palm oil as the most efficient crop for renewable energy. In addition to land use, recent studies on the environmental impacts of tilling and heavy agri-chemical use for soy and rapeseed demand that the EU include the environmental impacts these vegetable oils have as their contribution to climate change is more quantifiable than the ILUC supposition.

Confidence in Palm Oil Producing Countries

Major palm oil producing countries of Indonesia and Malaysia, both of which have interests in the EU’s biofuels program have shown commitments and concrete actions to the sustainability of their palm oil production. That Indonesia enforces a moratorium in opening new land for oil palm and Malaysia has also committed to cap the total size of oil palm cultivated area at 6.5 million hectares are just two examples of progress recorded by both countries. Significant decrease of wildfires and deforestation in Indonesia has to be acknowledged.

CPOPC gives credit to better land use management by the respective countries for this phenomenon as both countries strive towards sustainable management of all their natural resources and positive impacts of palm oil in uplifting millions of farmers out of poverty.

The implementation of national certification schemes for palm oil including the Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO) have been instrumental in establishing the sustainability of their palm oil production.

Clarity in Certification

The CPOPC acknowledges the EU’s concerns on the efficiency of voluntary certification schemes and looks forward to proving the efficiency of mandatory national schemes in removing deforestation from EU imports.

The CPOPC further acknowledges the EU’s new proposal that “the share of high indirect land-use change-risk biofuels, bioliquids or biomass fuels produced from food and feed crops for which a significant expansion of the production area into land with high-carbon stock is observed shall not exceed the level of consumption of such fuels in that Member State in 2019, unless they are certified to be low indirect land-use change-risk biofuels, bioliquids or biomass fuels pursuant to this paragraph.”

The global ambition to decarbonize is one of supreme urgency. The recent decision by G7 countries to back off ambitions for EVs is a clear signal that biofuels are a needed tool in fighting climate change without disrupting global economies.

Palm oil producing countries look forward to the ongoing EU-ASEAN Joint Working Group (JWG) on sustainable vegetable oils where a holistic and non-discriminatory approach towards vegetable oils can be developed to meet the Sustainable Development Goals (SDGs).

The national certification schemes which are mandatory for all palm oil production in Indonesia and Malaysia are without peer in the global trade for commodities. The CPOPC believes that the ISPO and MSPO schemes provide the right path towards the SDGs for both parties at the EU-ASEAN JWG.