Asian Agri, one of Indonesia’s largest palm oil producers, is not against a plan by the European Parliament to gradually stop imports of palm oil from Indonesia for its biodiesel program. It is, however, questioning the palm oil discrimination in European Union Plan, as the plan put palm oil at a huge disadvantage against other vegetable oils.
“What Europe is actually doing, if it becomes a policy to be implemented, is discrimination against palm oil,” Asian Agri Director for Corporate Affairs, Muhammad Fadhil Hasan told journalists after a ceremony to symbolically hand over part of the premium gained from the sale of sustainable oil to representatives of some 30,000 of its plasma farmers.
“In the current decision of the parliament, the use of biodiesel from palm oil will be halted in 2021, while for other vegetable oils, such as rapeseed and sunflower, it would only be for 2030. Why is it different?” asked Hasan.
Hasan said that Asian Agri, just like the government and the other players in the palm oil industry, is not against an EU Policy to halt the use of palm oil in its renewable energy program per se. They are, however, against the different timing given for palm oil compared to the other vegetable oils. The decision still needed to be approved by the European Commission and the European Council before it becomes policy.
Hasan said that Indonesia exports some 4,3 million tons of palm oil to Europe in a year, but that only 40 percent was used in biodiesel. The rest was for food and other industries.
He said that the worry was that if the policy became implementable, it may become a precedent and other countries may follow the palm oil discrimination policy.
He believed that even though the decision becomes a policy implemented by the European Union, the regional organization would still continue to import palm oil from Indonesia, for its non-energy sectors.
“Europe, in reality, whether it wants it or not, continues to depend on palm oil…. if let us say its (palm oil’s) use for biodiesel is halted, they will still need it for food and industry,” he said.
Hassan said that alternatives such as rapeseed and sunflower oils were more expensive compared to palm oil.
“I am not convinced that Europe will halt imports of palm oil. They cannot. They need it,” he said.