10/05/2010 (Business Times, Malaysia) - A NEW European research report has claimed that the European Union's (EU) Renewable Energy Directive (RED) discriminates against non-EU producers of biofuels such as palm oil.

Dr Gernot Pehnelt, director of the independent research institute GlobEcon, did the study with Christoph Vietze. The study has been released to the European Parliament.

He said RED is an example of import protectionism via environmental standards rather than an effective measure to actually save the environment and contribute to greenhouse gas (GHG) emissions savings.

"The EU has embedded protectionist measures at the behest of anti-development environmentalists and the uncompetitive European biofuels industry," he said.
 
Environmental standards have been designed and interpreted in favour of certain oil crops grown in the EU.

According to RED, biofuels must result in GHG savings of at least 35 per cent compared to fossil fuels in 2009 and rising over time to 50 per cent by 2017.

Most analysis carried out by researchers estimated GHG savings of 55 per cent for palm oil-based biodiesel, but the EU's calculation, done by its scientific and technical research arm the Joint Research Centre, showed the use of palm oil- based biodiesel failed the 35 per cent requirement, as it achieved only 19 per cent.

The RED also requires for sustainable biofuels to be produced with "no damage to sensitive or important ecosystems".

Pehnelt said many of the claims that foreign biofuels, specifically palm oil, are a threat to the environment are seriously flawed and some unfounded.

"Perhaps most importantly, palm oil acts as a substantial driver of economic growth in the developing world, drastically reducing hunger and poverty in regions that actively cultivate this valuable crop," he said.

Palm oil is a staple part of the national diet in many developing countries, already an important pillar of rural development in some tropical countries and a major generator of jobs.

It accounts for about one-third of the global production of edible vegetable oils and offers further opportunities, especially in areas like Africa where the industry has not been developed yet.

"Restricting palm oil production worldwide and limiting access to European markets would limit an important opportunity for developing countries to raise living standards and reduce poverty," he added.

The EU, he concluded, should reshape its policies towards palm oil, conduct objective and non-discriminatory calculations regarding the GHG savings and support palm oil imports from developing countries rather than restricting them.