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European Commission Classifies Most Palm Oil Fuels As Unsustainable

12 Feb 2019 4:57 pm
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MUMBAI (Commoditiescontrol) - The European Commission has classified palm oil biofuels as unsustainable, amid efforts to take aim at deforestation-linked products.

Each year, palm oil production is responsible for 45 percent of the clearance of virgin forest, and 18 percent of conversion of “high carbon stock” wetland, according to a Feb. 8 draft law from the European Commission, the EU’s executive arm.

Any biofuel source that leads to more than 10 percent of the annual clearance or conversion of tropical forests and other high-carbon stock land shouldn’t be counted toward the EU’s targets, according to the draft law.

The law stipulates that 14 percent of transportation fuel consumed in the EU must come from renewable sources by 2030.

If adopted, the law would be a blow to Indonesia and Malaysia, which export the oil and have both threatened retaliation if the EU disrupts that trade. Indonesia said in January it could challenge the EU’s draft law at the World Trade Organization.

The law could affect millions of tons of the vegetable oil.

About half the 3.9 million metric tons (4.3 million tons) of crude palm oil the EU imported in 2017—largely from Malaysia and Indonesia—were processed into biodiesel. The draft law wouldn’t stop imports of palm oil or its use in biofuel, but demand could drop if the substance does not count toward the EU’s renewables targets.

The draft law is open for comment through March 8, after which the commission will issue a final draft law, which will require the approval of the European Parliament and EU member countries before it can be adopted.

Minnesota-based Cargill Inc. is committed to biofuels feedstocks that don’t displace food crops, spokeswoman Corinne Holtshausen told Bloomberg Environment. Malaysia’s Sime Darby Plantation Berhad and Indonesia’s PT Sinar Mas Group didn’t respond to requests for comment.

Land Use Loopholes?

An EU law on renewable energy, finalized last December, requires the commission to adopt rules on how some biofuel crops contribute to indirect land-use change (ILUC), such as forest clearance to make way for plantations.

Biofuels that contribute to land razing or other dramatic environmental impacts would be phased out from the bloc’s renewable fuels targets by 2030.

A 2017 study carried out for the commission found that deforestation from palm oil production produced greenhouse gas emissions that far outpaced those attributed to other biofuel feedstocks.

The commission found the next-worst crop is soy. But growing and harvesting soy contributed to the razing of 8 percent of high-carbon stock land, below the law’s proposed 10 percent cutoff.

The draft law would also exempt palm oil produced from smallholdings of 5 hectares (12 acres) or less, or from land considered unused, abandoned, or severely degraded.

These exemptions were loopholes that could undermine the draft law, however, because it isn’t clear what counts as unused land and tropical forest also is cleared for smallholdings that sell their produce to large palm oil mills, advocacy group Transport & Environment said in a statement.

It was welcome that the European Commission “finally acknowledges that palm oil is not a sustainable biofuel,” Bas Eickhout, a Dutch Green member of the European Parliament, said in a Feb. 11 statement.

But he said exemptions “need to be revisited in order to make this proposal strong enough to protect forests, the communities that depend on them, and the animals that live there.”

He said some lawmakers and environmental groups plan to use the consultation period on the new draft to push for such exemptions.

(By Commoditiescontrol Bureau)

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