To burn or not to burn – Juncker’s palm oil conundrum

William Todts — February 01, 2019

Should Europeans be forced to burn palm and soy in their cars in the name of EU climate policy? This is the simple question the European Commission needs to answer today.

If you’d ask ordinary citizens, environmentalists, farmers, business leaders or scientists the answer would invariably be a resounding “of course we shouldn’t”. However, it increasingly looks as if the EU executive is about to give the green light for another decade of uncontrolled palm oil burning by Europe’s diesel fleet. Not because it’s good for the climate or because Europeans want it – 70% are against – but because the Commission is afraid about upsetting its trade partners.

The palm oil diesel saga started in 2009 when the EU adopted a green energy law to mandate the use of biofuels. Despite warnings from environmentalists the law did not distinguish between good and bad biofuels, leading to a huge surge in palm oil biodiesel, the cheapest but also the environmentally worst form of biodiesel. The word huge here is not an exaggeration: more than half of all the palm oil imported into Europe is now burned in our cars and trucks.

Europe’s biggest palm oil problem is not Nutella, Oreo cookies or lipstick. It’s diesel.

We are literally burning some of the most pristine and valuable rainforests in the world in our tanks. So when the EU’s green energy law was updated in 2018, the European Parliament wisely and quasi-unanimously decided to eliminate palm oil from the EU green energy law. There was a lot of support from national governments for this but the Commission prevented a deal, committing instead to propose, by February 2019, a delegated act to phase out the use of biofuel causing deforestation (so-called ‘high ILUC risk’ biofuels). This, it said, would be more objective, more robust and more scientific.

So whilst the palm oil issue isn’t of Juncker’s making, it is now his responsibility. And much like the Gordian knot, there are essentially two ways he can deal with the issue: either he gets tangled up in the knot and gets nowhere; or he makes a clear-cut choice. As president Juncker will know, Alexander did not become the Great by rearranging the Gordian knot a little bit – he cut right through it. To help the Commission make the right choice, 15 of Europe’s largest environment organisations, T&E included, launched the campaign #NotInMyTank to end palm and soy in diesel. An unprecedented 600,000 Europeans have joined our call so far.

So why is the Commission wavering? The answer is trade. Cecilia Malmström, the EU trade chief, is negotiating trade deals with producers of biofuel feedstocks: Indonesia (palm oil), Mercosur (South America, soy) and the US (soy). She does not want the “ILUC issue” to trouble her trade talks. Malmström, a Swede, talks a good game about climate ambition, but her actions are old-fashioned trade policy at its worst, pushing aside environmental concerns as soon as they stand in the way of a “good deal”.

It appears “the friends of palm oil” in the Commission are too clever to try and argue palm oil is not “high ILUC”. Instead they’re focusing on two things.

First they try to keep soy out of the “high ILUC” category. Soy is actually a principal cause of deforestation. The trade department is negotiating with Trump about the German car tariffs and the EU committing to buying more American soy is apparently part of the deal they want to strike.

Second, the Commission is defining a so-called “low ILUC” category for so called “green” or “good” palm oil. Recent studies show low ILUC palm oil is at best hard to enforce, and at worst a greenwashing exercise. According to persistent rumours “green” certificates would be given to palm oil produced on so-called unused land or resulting from increased yields (whatever that means). Whilst these two concepts are unenforceable the other rumoured option is outright scandalous. Apparently there’s now a push for all palm oil produced on small lots of land to be considered “low ILUC”. This not only makes a mockery of the low ILUC concept (lots of small plots are as bad as one large plantation from an ILUC perspective), it would also exempt large parts of the global palm oil market from the phase out. For example, more than half of the business of one of the world’s biggest, and most controversial palm oil companies, Malaysia based Felda/FGV, is based on controlling plots that belong to smallholders – the model is actually very disadvantageous for the smallholders.

Probably some in the Commission think keeping soy out of the “high ILUC” category and turning the “low ILUC” clause into a giant greenwashing mechanism is the way to “solve” the palm oil puzzle in a way that satisfies Malaysia, Indonesia and Trump without causing a public outcry. They are mistaken. The time has come for Juncker and his Commission to make a choice and decide whether they want to force Europeans to burn palm and soy in their cars in the name of EU climate policy. Yes or no? Any delegated act that does not put an end to this will be rejected by the public, and should be rejected by the European Parliament.