France moves to delay end of tax break on palm oil

Bernama

KUALA LUMPUR: The move by France to delay until 2026 the end of palm oil’s tax advantages instead of next year is a piece of good news for palm oil-producing countries like Malaysia, Primary Industries Minister Teresa Kok Suh Sim said.

“It allows more room for us as a palm oil-producing country to prepare ourselves for the removal of the incentives on the biofuel and more room for us to prepare for the future,” she told Bernama here, yesterday.

Reuters cited a Parliament document as saying that France’s National Assembly adopted an amendment delaying until 2026 the end of palm oil’s tax advantages, which aims to provide sufficient transition period for French companies to prepare for the end of palm oil in biofuels.

The legislation was due to remove palm oil from a list of permitted biofuels from January 2020.

The report stated that the move could benefit French oil company Total, which has invested 300 million euros (RM1.37 billion) to convert its La Mede site from a crude oil refinery into a biofuel plant, starting output in July. The company uses palm oil as part of the feed-stock to produce biofuel, it said.

Although this is preliminary, Malaysia looks at the move positively, Malaysian Palm Oil Council (MPOC) chief executive officer Datuk Dr Kalyana Sundram said.

“We look at it positively. Otherwise, by January 2020 there could be no palm oil allowed in French biofuel system,” he said, adding that the move by France is also the outcome of bilateral negotiations undertaken by the Malaysian government, particularly the Ministry of Primary Industries.

Last month, the ministry secretary-general Datuk Dr Tan Yew Chong led the ministry, Malaysian Palm Oil Board (MPOB) and MPOC delegation for a bilateral meeting in Paris where Malaysia’s sustainability initiatives and efforts, especially in the palm oil industry were highlighted.

Harvested oil palm bunches. Photo: Bernama

“It was a very fruitful discussion and I believe it has contributed to the decision (taken by France),” he said.

Tan said the ministry would continuously engage with France with regards to the issue of palm oil.

It has been a good week for palm oil as yesterday Malaysia struck key palm oil partnership deals with two major supply chain managers in the United Arab Emirates (UAE) and China to facilitate greater palm oil penetration in China, India and the Indian sub-continent.

The deals were sealed through the Bohai Commodity Exchange (BOCE) Malaysia/Asean platform, which inked two memoranda of understanding (MoUs) with Dubai-based Hakan Agro DMCC and China’s BOCE Global here, today.

Speaking to reporters after the MOUs signing ceremony, Kok said Hakan Agro, with extensive business exposure in the Indian sub-continent, the Middle East and the UAE, would facilitate exports of more than one million metric tonnes of Malaysian palm oil in their core markets in the Indian sub-continent in 2020.

BOCE Global, meanwhile, aims to import about 1.5 million metric tonnes into China by 2020, she said.

“They aim to target primarily the inner regions of China, which are less exposed to palm oil (and) yet offer a significant growth potential due to the large population in the inner regions and which are also registering significant economic growth,” Kok added. _ Bernama

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