The Palm Scribe

Palm oil in Europe: rejected by the parliament, backed by businesses

The European Palm Oil Alliance (EPOA) has thrown its support behind Indonesia and other palm oil producing countries, labelling recent resolution of the European Parliament which is seeking to ban palm oil use in its renewable energy program as discriminative.

palm plantation worker
ILLUSTRATION. Plantation worker watches as a truck unloads freshly harvested oil palm fruit bunches at a collection point.

“in the name of the palm oil industry we are calling for a healthy completion. We oppose discrimination against particular vegetable oil products, such as palm oil,” EPOA Chairman Frans Claassen told Warta Ekonomi last week. The support of the organization was not aimed at promoting palm oil for economic interests but was to provide the right facts and perspectives in relations to the palm oil industry.

The European Parliament on January 17 voted to phase-out palm oil from its renewable energy program by 2021. It also wants to cap crop-based biofuels at the member states’ 2017 consumption levels and no more than 7% of all transport fuels until 2030. The move was said to be based on the belief that palm oil production was closely linked to rapid deforestation in countries producing the crop.

EPOA said it rejected the decision of the European Parliament by arguing that 70 percent of Indonesian palm oil products that enter Europe was already Certified Sustainable Palm Oil (CSPO).  “We are your friend in Europe, Real friends are those who mutually need each other,” Classen was reported as having said by another business daily Bisnis Indonesia.

A European import ban on Indonesian palm oil could impact the livelihood of almost five million palm oil farmers in Southeast Asia’s largest economy.

Although the planned ban on palm oil import by the European Union came as no surprise for many, it belied the actual facts of the past few years. The European Union is one of the largest palm oil consumer. Its import of palm oil from Indonesia has also continued to strengthen by the year.

EU Ambassador to Indonesia, Vincent Guerend said during the 7th EU-Indonesia Business Dialogue in Jakarta in November last year that imports of palm oil from Indonesia have increased by 36 percent in value and 19 percent in volume by November in 2017 compared to the same period in 2016. The market share of Indonesia had also jumped to 52.4 percent. He also added that there were currently no governmental trade measures or policies at the level of the European Union or the EU Member States that discriminated or harmed Indonesian palm oil exports.

Indonesia is the world’s top palm oil producer and along with Malaysia, the second largest producer, supplies more than 85 percent of the market for the oil. The main export markets for Indonesian palm oil are China, India, Pakistan and the Netherland.

For Indonesia, besides being a main income earner, palm oil also plays a large role in poverty eradication and in spreading welfare as well as raising millions of farmers and workers in the industry into the middle class. In the face of increasing hindrances to palm oil in its traditional markets, the government is not only pushing to encourage domestic consumption through its biodiesel mixture obligation but also is trying to further develop existing markets and new ones.

Indonesia has welcomed the establishment in December 2017 of the North America Sustainable Palm Oil Network (NASPON) that is aimed at educating, building momentum and assisting North American companies in making and delivering on commitments to source sustainable palm oil.

NASPON was formed following an annual roundtable meeting of the Roundtable on Sustainable Palm Oil (RSPO) in Bali in October and the move opens the way for Indonesian certified sustainable palm oil to expand the market in North America.

In 2015, Indonesian palm oil exports to the United States reached almost 60 million tons. By mid-last year, the figures had already reached 83 million ons.

sumber: RSPO Indonesia

Tiur Rumondang, the RSPO Indonesia Director, said that Indonesia shared a lot of the visions of NASPON in safeguarding the environment and promoting certified palm oil production. “More than 50 percent of the world’s Certified Sustainable Palm Oil is produced in Indonesia and this will help NASPON in the attainment of its aims,” Rumondang told The Palm Scribe.

Despite of the mounting attacks and black campaign against palm oil, including from Indonesia, the country appears to still has the opportunity to develop its palm oil production further as world demand for vegetable oil continued to rise and the quality and sustainability of Indonesian palm oil also continued to improve.

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