Sanity should prevail over proposed EU palm oil ban

The world does not need a trade war over palm oil


The European Union (EU) may use the Roundtable on Sustainable Palm Oil’s (RSPO) new principles and criteria (P&C) before it decides whether to ban Europe-bound palm oil or other vegetable oil exports.

 M R Chandran Industry consultant M R Chandran (picture) said the P&C, which are expected to be issued at the end of next year, would allay any fear that the EU would carve out its own standards.

He said presently there are already six accreditation sets, including the RSPO and the Malaysian Sustainable Palm Oil (MSPO).

“The EU has not singled out any certification. It only states that the product has to be ‘certified sustainable palm oil’. So, it is up to them to decide on which standard to accept.

“I believe the EU will wait for the RSPO to unveil the new P&C in November 2018. They will want to see what the strength of the new benchmark is, and if it is acceptable to the EU. So, why should they bother to create their own new standards,” Chandran told The Malaysian Reserve.

He said the EU generally accepts all market-driven standards such as the Fair Trade and the Forest Stewardship Council certifications. With RSPO being the most credible scheme for edible oils and biofuels, it is likely that the EU will take that certification into consideration.

“The RSPO alliances have engaged the EU parliamentarians and the European Commission on the matter. I hope sanity prevails at the end of the day because there have been threats by the Malaysian and Indonesian governments that they would retaliate.

“You don’t want to get into a trade war when there are so many uncertainties in the world,” Chandran said.

The European Parliament in April passed a non-binding resolution to phase out the use of edible oils in biofuels by 2020.

The resolution endorsed a single certification scheme to ensure that palm oil and palm products entering Europe are produced in an environmentally sustainable way.

However, the criteria of the unified scheme have not been clearly defined.

Meanwhile, the MSPO — which is about 80% similar to the RSPO — is also due for a revision next year, and amendments would be made to address its shortcomings, Chandran added.

The MSPO was first introduced in 2013 on a voluntary basis to uplift the sustainability standards of the local palm oil industry.

But as palm oil comes increasingly under fire in the EU, the government decided to make the MSPO mandatory for all industry players by 2019.

Putrajaya has since held discussions with EU representatives on ways to raise the standards of the MSPO and push for its acceptance in the region.

As of August 2017, the total planted area that has been certified under the MSPO certification scheme is 245,381ha — 4.3% of the total 5.74 million ha of planted area in Malaysia.

The certified areas include 237,509ha under plantation companies, 3,868ha under organised smallholders and 4,004ha under independent smallholders. Twenty-two mills have also been MSPO-certified.

Malaysia is the world’s second-largest producer of palm oil, and accounts for 29% of global palm oil production and 37% of world exports.

The EU is the country’s largest export destination for palm oil this year, beating India and China.