KUCHING: European Union (EU) threat to palm oil export is discriminatory but has other implications, as noted by the Sarawak Oil Palm Plantation Owners Association (SOPPOA). Over the las t few weeks, Malaysian Minister for Plantation Industries and Commodities has detailed the discriminatory threat from European Union (EU) to ban use of palm oil as biofuel by 2021.
Datuk Seri Mah Siew Keong stated that the whole issue of palm oil as biofuel has nothing to do with sustainability issues nor deforestation; it’s all about protectionism for European farmers (Borneo Post 19th January 2018). In other words, the EU proposed ban on palm oil as biofuel is all about discriminating against palm oil which has no scientific basis nor practical considerations, as rightly pointed out by Dr. James Fry, LMC International, Oxford, UK in his presentation at the “Palm Oil Economic Review and Outlook seminar” in Kuala Lumpur on 18 January 2018.
Dr. James stated that as the world’s largest biofuel market, the EU is under pressure to cut its mandate on vegetable oils which is losing public support while EU Parliament wants to totally stop palm oil from being part of the biofuel formula.
The EU regulations for biofuels clearly state that these must meet the sustainability credentials and palm oil meets 99 per cent of this regulation and is ISCC (International Sustainability and Carbon Certification) certified which means palm oil meet the criteria required. In fact, as Dr. James pointed out, CPO (Crude Palm Oil) with methane gas capture is considered to have the best GHG (Green House Gas) reductions of all vegetable oils for biofuel stocks.
There is therefore no scientific basis for EU proposed call for ban on palm oil as biofuel; its outright discriminatory policy with no rationale either scientifically or practicality. Practicality stems from the current use of CPO in biofuel which is about 3.5 million ton annually.
To substitute CPO, another vegetable oil will have to be sourced and locally in EU market that would be rapeseed. But that itself is another dilemma – the food market in EU by law requires oils from GM crops to be labelled and rapeseed cannot meet such requirements.
The only other possible source of vegetable oil is soya bean but its production when compared to palm oil is about one-eight (1/8).
What this means is that it will take eight times more land to plant soya bean to get the same amount of oil from palm trees. Also soya bean meal is the end product after oil has been extracted which will yield four (4) ton for every one ton of palm oil.
It is highly unlikely that farmers will increase planting soya bean at current prices; unless pries rise four-fold, it will not be competitive to increase production of soya bean due to cost of production. Therefore, the ban on palm oil as proposed by EU is something that needs more rationale thinking and also to note the cost factors. Any policy born out of discrimination is bound to meet resistance and will fail eventually as the practical and cost factors of market will eventually catch up with such a move.
