11/05/2010 (The Star Online) - PALM oil has had its fair share of smear campaigns and boycott from both the Western environmental NGOs and major consumer goods manufacturers.

The toughest challenge to date is mostly environmental related. The most pressing one is the adoption of the renewable energy directive (EU RED) by the European Union parliament on biofuel content which imposed strict regulations on carbon emission introduced back in 2008.

The EU RED has also put many palm oil-based biodiesel producers in a limbo as the directive distorts the commodity price and its trade. Many trade observers see the directive as a tactical unfair business ploy and a non-tariff trade move by the EU to single out palm oil for not able to reduce greenhouse gas (GHG) emissions and preserving the biodiversity.

According to the EU scientific and technical research, palm oil biodiesel - which has only about 19% GHG - failed to meet with the EU RED requirement. The directive states that biofuel must result in GHG savings of at least 35% versus fossil fuel in 2009 and also increase over time to 50% by 2017.

This claim, however, is contrary to many research views, indicating that palm oil biodiesel actually has an estimated GHG savings of 55%!

While many palm oil biodiesel producers were doubling their efforts to convince the EU on the sustainability of palm oil, there have been a continuous slew of anti-palm oil campaigns launched by Western environmental NGOs.

Amid the attacks and boycotts, however, there have been many positive independent researches and reports on palm oil from Europe starting to re-surface lately.

Many are questioning the EU RED's actual motive and its unfair treatment to single out palm oil which needs to be certified as sustainable, whereas rapeseed, soybean or olive oil produced in the developed countries were given preferential treatment despite not being sustainably produced.

The most glaring recent finding revealed that the EU, via its environmental ministries and commissions, had actively funded up to 70% of the operating budgets of environmental NGOs - many were mostly the same groups viciously campaigning against palm oil imports into the EU.

Among the major receipients include Greenpeace and Friends of The Earth.

Another latest report is by independent research institute GlobEcon which claimed that the EU RED discriminated against non-EU producers of biofuels such as palm oil.

The report stated that EU RED was an example of import protectionism via environmental standards rather than an effective measure to actually save the environment and contribute to GHG emissions savings. It went on to say that many of the claims on foreign biofuels, specifically palm oil, that they were a threat to the environment were seriously flawed and some unfounded.

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

Backed by the latest encouraging developments, it came as no surprise when major producers Malaysia and Indonesia came forward to say that both countries would bring up the EU RED discriminatory treatment matter to the World Trade Organisation (WTO) level.

Last Friday in Yogyakarta, Indonesia, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok and Indonesia Agriculture Minister Suswono indicated that both countries might be seeking legal opinion from WTO to ensure that the EU biodiesel rules did not reduce exports of palm oil.

The palm oil fraternity no longer wants to take things lying down and plans to seek justice to ensure that the EU sustainability scheme does not discriminate against third world producers.

It maintains that the criteria used by the EU RED must be science-based, verifiable and in accordance with WTO principles.