Will the EU call the palm oil nations’ bluff?

Photo: Kemal Jufri / Greenpeace

The vote enraged palm oil exporting nations. Led by Indonesia and Malaysia – which jointly control 85% of the world’s palm oil production – they have launched a well-funded and aggressive campaign denouncing Europe’s ‘crop apartheid’ and threatening ‘retaliatiation’.

Phasing out support for palm oil biodiesel will not fix Europe’s failed biofuels policy, but it is the right thing to do and it is worth fighting for. Here’s why:

The 2009 RED forced EU countries to ramp up biofuel volumes to hit their renewable transport energy targets. Since palm oil is cheap and the EU never adopted decent sustainability standards, palm oil exports into the EU got a major boost. Since 2009 virtually all of the growth in biodiesel has come from palm oil, which now accounts for roughly a third of EU biodiesel. That makes drivers the top consumers of palm oil in Europe.

The environmental impacts are devastating. Enormous swaths of tropical rainforest in Malaysia, Indonesia and beyond have been cut down to make way for palm oil plantations. Ancient forests and wetlands are gone, the habitats of species on the brink of extinction have been destroyed and their numbers decimated and the people from and living in the forests displaced or disowned and sometimes murdered – see our tribute to Hernan Bedoya, a Columbian community leader. Meanwhile the original reasoning for promoting crop biofuels has fallen to pieces: from a climate point of view, crop biodiesel is 80% worse and palm oil biodiesel three times worse than fossil oil.

So while Parliament would have done better to completely phase out crop biofuels, or alternatively introduce full land-use change (ILUC) accounting, it is eminently sensible to end support for the worst of all biofuels: palm oil biodiesel. Also, the Parliament’s proposal is not without precedent. In 2012 the US EPA issued a notice announcing palm oil would not qualify towards the the American RED (the RFS) because of its high greenhouse gas emissions. Norway made similar moves.

The palm oil nations have launched an all-out assault on Parliament’s position. They claim that it wants to ban palm oil entirely – but this is misleading. Palm oil could still be sold into the EU but palm based biofuels would no longer count towards the EU’s renewable energy targets. Given that the RED is a key pillar of the EU’s climate policy, disqualifying fuels that are worse than oil is essential. An objective methodology that disqualifies biofuels with very high deforestation risk, such as palm and soy, is a legitimate policy and would also enable a lower cap for crop biofuels.

Palm producers also claim their crops are certified as sustainable. But a recent report for our Dutch member Milieudefensie shows the main palm oil certification schemes (RSPO/ISPO) are completely inadequate. More progress can and should be made towards more sustainable forms of palm oil cultivation for food. But certification doesn’t work for palm oil biofuels. The biofuels market is artificially created by mandates that boost demand for food crops and create pressure on agricultural land. This forces farmers to seek new farming land which causes deforestation and peat drainage. This indirect land-use change (ILUC) is not captured by certification schemes (which, by definition, are static), as the EU Court of Auditors pointed out.

Palm producers also argue that a ban would hurt small farmers and undermine ‘sustainable development’. But the reality is much more complex. There are multiple reports of small farmers being driven off their land to make way for big plantations. Those who resist suffer repression and sometimes risk their lives. More fundamentally, growing palm oil to burn it in cars, trucks or planes is never going to be a sustainable business model. The quicker Malaysia and Indonesia realise this, the better. If the world were to follow Europe’s current thirst for palm oil biodiesel, an area equal to the remaining rainforests and peatlands of Borneo, Sumatra and peninsular Malaysia would be needed to quench it.

So none of this is very convincing, which is why the palm oil lobby is now exerting maximum diplomatic pressure on the Commission, European Parliament and national governments. They are threatening WTO complaints, trade retaliation (the EU and Indonesia are negotiating a free trade deal) and impacts on military cooperation.

Europe’s leaders should take all of this for what it is: a well-orchestrated and skillfully executed bluff. The EU is the world’s largest single market, the world’s third biggest economy and, with most Europeans firmly opposed to being forced to burn food, especially palm oil, in their tanks, the EU’s democratically elected politicians are well-equipped to withstand a bit of diplomatic pressure. Citizens across Europe will be watching closely whether the EU calls the palm oil nations’ bluff.