The following are articles by my colleague Rupa Damodaran and state newswire Berita Nasional Malaysia (Bernama).
THE move by Indonesia and Malaysia, the top two palm oil producers, to take up the industry trade dispute against the European Union (EU) will clear the name of the commodity, says Malaysian Palm Oil Council (MPOC) chief executive officer Tan Sri Yusof Basiron.
There are currently too many exaggerated figures being used to "bash" palm oil from making its mark in the European market, he said. "We have done a study and there is a case against the EU for the way it has formulated the Renewable Energy Directive and that is already against the WTO guidelines," he said in an interview recently.
There was also a recent report stating that the EU, through its environmental ministries and commissions, is funding up to 70 per cent of the operating budgets of environmental NGOs. Such funding implicates the EU for creating barriers to trade for agricultural products from developing countries.
Plantation Industries and Commodities Minister Tan Sri Bernard Dompok is expected to meet his counterpart in Indonesia later this month on the possibility of drafting a substantive complaint against some of the most developed countries in the EU. "The strategy of these big economies has stacked a lot of issues against small countries like Malaysia, making us hapless."
Many of these issues were used by the environment NGOs to dispute the sustainable agricultural practices of oil palm growers in Malaysia to take the "heat" off the European oils like rapeseed which enjoys subsidies.
Yusof, who has been pursuing the Malaysian fight against the European environment NGOs for their allegations, admitted that it could probably take years before the results are seen. "In the meantime, we will take all avenues to correct the inaccuracies about the commodity."
One important fact which Malaysia and Indonesia want to stress is palm oil's ability to supply a vital food component to billions of people around the world while providing millions of jobs and income to small farmers and plantation workers.
Deforestation is also another area which Malaysia has found some allegations unfair and unfounded. "Why should we be dictated when other oils are not working sustainably and, instead, continue to be given preferential treatment while in countries like Canada there is still deforestation going on."
Malaysia still maintains 56 per cent of its total land area under forest, thereby keeping its pledge made at the 1992 Rio Summit to keep at least half of its land as forests.
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EU envoy: Malaysian CPO exports not affected
THE sustainability criteria in the European Union (EU) Renewable Energy Directive (RED), due to come into force on December 5, will not affect Malaysia's palm oil exports to the region.
EU ambassador and head of delegation to Malaysia Vincent Piket said there will be no change for crude palm oil (CPO) imports. "The EU will not block any Malaysian CPO exports. Exports into the EU can continue just as they are today, with no new tariffs, quotas, restrictions or conditions," he said in Kuala Lumpur yesterday.
"The EU RED and its sustainability criteria do not concern Malaysia's CPO exports to the EU market for consumer products, like food, cosmetics, detergents and so forth. In other words, 90 per cent of Malaysia's palm oil exports to the EU are in no way affected by the new EU rules," he said.
Certain quarters have voiced their concern about the EU new directive and its effect on palm oil exporting countries like Malaysia and Indonesia. Piket said the EU RED is an essential element of the climate and energy package to meet the group's climate change and energy policy objectives.
He said the directive contains a 10 per cent binding target for renewable energy in transport, including biofuels, by 2020. This will provide an opportunity, also for developing countries, to supply biofuels to the EU market.
"With this directive, the EU is creating a new market and we want to make sure that we do it right. It is crucial that the measures to fight climate change and implement the renewable energy policy, including biofuels, do not have negative side-effects on the environment," he said.
Piket said it is for this reason that the directive contains sustainability criteria for biofuels. The sustainability criteria are related to two issues - the lifecycle greenhouse gas emissions of biofuels and the land used to produce the biofuels. "They aimed to achieve significant greenhouse gas savings compared to fossil fuels and prevent negative side-effects on biodiversity," he said.
Piket said the sustainability criteria used by the EU RED were science-based, verifiable and in accordance with the World Trade Organisation principles. "The criteria will be the same across the EU. They will apply to both EU production and imported biofuels," he said.
The EU RED foresees incentives for sustainably produced biofuels, though biofuels which do not meet the criteria can still be imported and marketed in the EU, Piket said. "They will not, however, receive tax exemptions, subsidies or other incentives from EU member states, nor will they count towards the objective of 10 per cent of renewable energy in transport."
According to Piket, it is important for Malaysia to note that there are incentives for sustainably produced biofuels. The EU RED, he said, is exclusively about trade in biofuels. "The EU countries will be offering incentives to promote the use of sustainably produced fuels, including biodiesel," the envoy said. - Bernama
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