19% greenhouse gas emission savings for palm oil deemed too low

25/05/2010 (Business Times), Kota Kinabalu - Malaysia is unhappy with the EU Renewable Energy Directive (EU RED) which assigned a much lower value of 19% greenhouse gas (GHG) emission savings to palm oil, as this can disqualify the commodity as a biodiesel source for use in Europe, said Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor.

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.

Based on the lifecycle carbon analysis (LCA) by experts over the past two years, the GHG savings from the LCA of palm oil is actually over 50% – much higher than the EU’s estimate, Lee told reporters on the sideline at the ongoing International Palm Oil Sustainability Conference (IPOSC) organised by MPOC yesterday.

Lee said: “Having such ammunition in our hands will allow MPOC to continue negotiations with the EU. The Malaysian Palm Oil Board is also ready to publish its own LCA data.”

Malaysia would be looking at laying the foundation for palm oil to qualify as an advanced biofuel source in the United States under its Renewable Fuels Standards 2 or RFS2, he added.

Last month, oil palm major producers Malaysia and Indonesia indicated that both countries would bring up the EU RED discriminatory treatment matter to the World Trade Organisation (WTO) to ensure that the EU rules does not reduce exports of palm oil.

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

According to Lee, the palm oil industry continued to be blamed for loss of wildlife habitat and biodiversity by many Western environmental NGOs.

“While often there is little and no avenue to verify the sources and statistics of these reports, it managed to leave a lasting adverse impression on major consumers,” he said, adding that it was no surprise that major food producers had been pressured to drop palm oil from their product formulations.

Even the openness of the local palm oil industry to subject itself to the Roundtable on Sustainable Palm Oil (RSPO) certification has been criticised by certain quarters, added Lee.

Earlier, MPOC chief executive officer Tan Sri Yusof Basiron said Malaysia should come up with its own palm oil certification to ensure sustainability of its exports to other parts of the world.

He said there were too many certifications imposed on palm oil by major consuming nations like Germany and the Unted States.

“Apart from the RSPO certification sought by our plantation companies for exports mainly to the EU markets, Malaysia must prepare itself to the demands from other major consuming nations as well,” he added.

Meanwhile, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said after the official launch of IPOSC that the Government wanted to increase smallholders’ palm oil yield.

“Most of them are producing about 2.5 tonnes to 3 tonnes per ha per year, which is below the current industry national average of 4 tonnes per ha per year,” he said.

He expects smallholders to attain similiar yields as their estate counterparts via good agricultural practices, higher yield clones and better management as well as automation.