Is the EU Planning a Disguised Ban on Palm Oil under RED?

The EU’s Trilogue negotiation process is about finding a compromise: that’s how it works. The current Trilogues over the Renewable Energy Directive (RED) are no different. The EU negotiators effectively face two opposing positions on the issue of Palm Oil. The EU Parliament wants to ban it entirely; and the Commission and Council reject that ban.

If common sense prevails, the ban will be dropped altogether. That is WTO-compliant, non-protectionist, helps the EU’s trade strategy, and gives more choice to EU renewable energy users and consumers – and most importantly assists oil palm farmers around the world.

However, common sense is rarely the forte of the EU Parliament. Are the other parts of the EU able to find a way forward?

They’ve made one attempt already in the form of a re-brand. Brussels tried to re-brand the ban on Palm Oil in the media as a “Subsidy Cap”. This was an attempt to convince producing countries that a discriminatory market barrier is not that bad. Yeah, right.

The EU’s Embassy in Indonesia tried this as well: it actually released a document claiming that no trade barriers or discriminatory legislation towards Palm Oil exist.

The EU’s Embassy in Malaysia tried as well when they stated, “The EP has not voted in favour of a ban of palm oil-based biodiesel. Instead it has voted in favour of excluding biofuels produced from palm oil from being accounted towards the EU Renewable Energy targets. This would by no means limit the amount of biofuels from palm oil that can be produced or imported and consumed in the EU.”

Small farmers know a ban when we see one. How do we know the ban on Palm Oil is a ban (and not a “subsidy cap”)? We know because the EU Parliament – which first proposed the ban – said it was a ban.

Here’s the official EU Parliament press release: “MEPs vote to ban palm oil in biofuels from 2021”

Virtually the only reason biofuels are used in the European Union in such volumes is because the law – the RED – mandates the use of renewable fuels.

Palm Oil can be and is legally used as a feedstock for biofuel under the RED because it meets the EU’s criteria.  Removing Palm Oil from the RED is an effective ban. It kills demand for Palm Oil renewables in the EU. To suggest otherwise is misleading.

This attempt to find a middle ground failed. What’s next?

The EU will likely try for a ‘Disguised Ban’ on Palm Oil: it won’t call out Palm Oil, but will introduce new, tougher criteria to lock Palm Oil out of the EU (in effect, achieving the same result as the outright ban).

Such a ‘Disguised Ban’ may introduce some form of Indirect Land Use Change (ILUC) or additional sustainability criteria.  We don’t know; however, look for something to come out soon, perhaps ahead of the next Trilogue on 17th May.

Such a disguised ban would be pleasing for many in Brussels, especially the MEPs and the Commission can say to its ASEAN partners, ‘See? We stopped the ban.’

Not so fast.

ICYMI: The Times exposes threat to UK jobs from the EU’s proposed Palm Oil ban

The Times published this morning an article by Ben Webster highlighting how U.K. defence contracts – responsible for thousands of jobs – could be at risk from the EU’s proposed ban on palm oil biofuels.

The deal, worth more than £1.5 billion, could be in trouble should the EU move forward with the proposed Palm Oil ban.

The Times revealed that emails exchanged between the UK Ministry of Defence and Malaysian officials described how an outright ban “could affect our bilateral relationships and potentially defence sales.”

Webster writes:

 “Malaysia plans to buy up to 18 Typhoon fighter jets to replace grounded Russian MiG-29s. BAE Systems hopes to secure the contract, worth more than £1.5 billion. BAE employs 5,000 people directly in the UK on the Typhoon programme and there are 9,600 other jobs in the UK supply chain.

 The European parliament voted in January to phase out palm oil in biofuel, prompting a backlash from growers in Malaysia, where the issue could influence the outcome of tomorrow’s general election.

 Mah Siew Keong, a Malaysian government minister, has threatened a tit-for-tat boycott of European goods.”

Three million Malaysians, including 650,000 small farmers, all dependent on income from oil palm plantations, are at risk of being stripped of their livelihood should the EU vote to put an operational ban in place by 2021.

Read the full article in The Times online here.

Faces of Palm Oil is a joint project of the National Association of Small Holders (NASH), the Federal Land Development Authority (FELDA), the Dayak Oil Palm Planters Association (DOPPA), the Sarawak Land Consolidation and Rehabilitation Authority (SALCRA) and the Malaysian Palm Oil Council (MPOC) that seeks to advocate on behalf of Malaysian small farmers. To learn more, visit http://facesofpalmoil.org

ICYMI: The Guardian Investigation Finds the EU’s Palm Oil Ban Would be a Disaster

The Guardian published yesterday the untold story and real-life consequences that the European Union’s proposed palm oil ban will have on Malaysian farmers and communities should the palm oil ban go in to effect in 2020. The story also highlights how the proposed ban has “made the EU a dirty word in Malaysia” and damaged Europe’s image.

Speaking to several farmers in rural Malaysia, Hannah Ellis-Petersen reports on the devastating effects these farmers and their families will face should their livelihood be stripped from them.

Citing the all too real consequences the proposed palm oil ban will have on thousands of Malaysian farmers, Hannah Ellis Petersen speaks to these farmers who, for decades, have provided for their families and have lifted themselves out of poverty by tending to their oil palms.

Ellis-Petersen writes:

“Yet for Malaysia’s smallholder farmers, many of whom were rescued from poverty when the government’s land authority, Felda, gave them 10 acres of land to harvest palm oil in the 80s, the allegations of environmental destruction are baffling. They account for 40% of Malaysia’s palm oil output and yet none engage in any land-grabbing, the slash and burn or deforestation practices that were pivotal proponent for MEPs voting to ban palm oil in biofuels.

“There are also wider political ramifications of the EU ban. Banning palm oil in biofuels is likely to also weaken the EU’s influence in southeast Asia, and hand even more more power to China – the biggest palm oil customer in the world – at a time when the EU has expressed concern about increasing Chinese domination of the region.”

Dato’ Aliasak, President of the National Association of Small Holders Malaysia, is quoted saying, “Palm oil has allowed the rural poor in Malaysia to develop our own land, lift ourselves and our families out of poverty, and take control of our own economic destiny.”

Read The Guardian’s full article online here.

Faces of Palm Oil is a joint project of the National Association of Small Holders (NASH), the Federal Land Development Authority (FELDA), the Dayak Oil Palm Planters Association (DOPPA), the Sarawak Land Consolidation and Rehabilitation Authority (SALCRA) and the Malaysian Palm Oil Council (MPOC) that seeks to advocate on behalf of Malaysian small farmers. To learn more, visit http://facesofpalmoil.org

Malaysian Small Farmers Say No to EU Ban on Palm Oil

Today, the National Association of Small Holders (NASH) launched a new advertising campaign, “Europe’s Crop Apartheid”, in Politico Europe to defend Malaysia’s small farmers against the EU’s ban on Palm Oil biofuels.

The European Parliament’s ban on Palm Oil threatens 650,000 small farmers and over 3.2 million Malaysians who rely on the Palm Oil industry for their livelihoods. Some in Europe claim this is a ‘subsidy cap’, not a ban. Malaysian small farmers are not foolish. We know a ban when we see one. Approving this ban on Palm Oil biofuels will signal that Europe is retreating from its trade commitments in Asia.

Text of the advert:

Here’s the facts about the EU’s proposed Ban on Palm Oil under the Renewable Energy Directive:

  1. The European Parliament has voted to Ban Palm Oil biofuels.
  2. The EU Commission claims, “excluding biofuels produced from Palm Oil from being accounted” under RED is not a Ban. 
  1. The EU Commission wants you to think the Ban is a “Subsidy Cap” post 2021. This is patronising. Malaysia’s small farmers are not foolish: we know a Ban when we see one.
  2. The “Subsidy Cap” means exclusion for Malaysia’s Palm Oil farmers. European oilseeds will not be excluded. The very definition of discrimination.
  3. EU leaders attack American tariffs but now seek to impose discriminatory tariff-like measurers on Malaysian exports.
  4. Approving a Ban on Palm Oil biofuels will signal Europe is abandoning its WTO commitments and withdrawing from Asia.
  5. The Malaysian Government considers the Ban and any discrimination on Palm Oil biofuels as modern day Crop Apartheid imposed by Europe.

For more information on the Palm Oil ban:

Malaysian Small Farmers Release Video Enlightening Iceland’s Walker

Malaysian small farmers have prepared a video that seeks to enlighten Mr Walker about the real facts on palm oil.

Here’s the Facts:

“Palm Oil can lead to Rainforest Destruction.”

WRONG:
Livestock (beef) leads to 10 times more deforestation than Palm Oil.
Soy accounts for more than double. Rapeseed uses five times the amount of pesticides compared to Palm Oil.
Sunflower uses 4 times more land to produce the same amount of oil.

“Forests need to be cleared to make way for Palm Oil by being chopped down or simply burnt.”

WRONG: The U.K.’s forest is disappearing with only 11% left. Malaysia’s forest is increasing with over 54% of our land protected as forest.

“Animals such as the orangutan are now critically endangered and can soon become instinct.”

WRONG: The orang-utan is not dead. The IUCN estimates the population of Bornean orang-utans is 104,000. In 2010, over 59% of Borneo forests were classified by IUCN as “suitable habitat” for orang-utan.

Malaysian Small Farmers: Iceland’s Actions Colonial; Reminiscent of Britain’s Dark Past

KUALA LUMPUR, Malaysia, 11 April 2018 – Malaysia’s small farmers denounce the actions of UK supermarket Iceland, which plans to remove Palm Oil from its own-brand products.

Dato’ Haji Aliasak Bin Haji Ambia, President of National Association of Small Holders (NASH) Malaysia, made the following statement:

“Iceland through this action longs for the dark days of Britain’s Colonial past where they tell us what to do from Britain, while at the same time taking away our incomes and our ability to feed our families. This announcement is disrespectful and without any basis in fact.  Malaysian Palm Oil is sustainable, unlike the rapeseed and sunflower oil they will now be using. Iceland should be ashamed that their new policy will take food off the plates of our communities.”

This is a Colonial-Era policy, enacted by a company clearly living in the wrong century.

Rapeseed and sunflower oil are grown largely in rich countries in Europe. Palm Oil is grown in developing countries: its major producers are all in Asia, sub-Saharan Africa and Latin America.

Iceland is taking money away from the poor farmers in Africa & Asia, to give to the rich agri-corporations in Britain and Europe. There is a name for this: Colonialism.

Iceland’s flimsy claims on environment are easily disproved. The latest EU research proves that Palm Oil is not a major factor in global deforestation. In fact, livestock (beef) accounts for 10 times more deforestation than Palm Oil. Soy accounts for more than double. Rapeseed uses five times the amount of pesticides compared to Palm Oil; sunflower uses 4 times more land to produce the same amount of oil.

No sign of Iceland attacking these commodities, which are grown and produced in rich countries in the West. Double standards: one rule favouring rich countries; another rule discriminating against poorer countries. There is a name for this: Colonialism.

Iceland’s Managing Director, Richard Walker, filmed a video in Borneo, in which he claims his own moral superiority whilst ignoring the facts on the ground. This is not surprising.  His actions literally take money out of the pocket of poor communities. Lecturing people in Asia from your moral high-horse overlooking the Thames, whilst taking away their incomes and livelihoods. There is a name for this: Colonialism.

ENDS

Statement from Malaysia Minister following RED 2nd Trilogue

The EU held the 2nd ‘Trilogue’ negotiation meeting on 27th March in Brussels, to discuss the Renewable Energy Directive (RED).

Malaysian Minister of Plantation Industries and Commodities Datuk Seri Mah Siew Keong released the following statement:

The Malaysian Government’s position on the RED remains consistent. The palm oil ban proposed by the EU Parliament is an unacceptable protectionist trade barrier, and a breach of the EU’s World Trade Organisation (WTO) commitments.

The Malaysian Government will defend our 650,000 small farmers who cultivate oil palm, and will not accept any discrimination from the EU that harms our rural communities.

Malaysia stands in solidarity with our fellow palm oil producing countries, who have all been clear on the consequences should the EU impose an aggressive trade barrier against our nations. Banning palm oil will negatively impact European trade and cooperation in South East Asia. If the EU Member States stop purchasing our palm oil, we will stop buying their products.

Malaysia has raised the issue at the WTO Technical Barriers to Trade (TBT) Committee and the Council of Trade in Goods (CTG) on 20th-23rd March, along with Thailand, Indonesia, Colombia, Costa Rica and Guatemala. The RED proposed ban on palm oil is discriminatory and a clear breach of the EU’s WTO commitments.

Malaysia urges the European Commission, European Governments, and the Council of the EU, to reject the proposed palm oil ban.

Malaysia thanks our many friends and partners in Europe who support Malaysian farmers and oppose the discriminatory ban on palm oil. The Governments of France, Spain and Italy have shown welcome support that will strengthen Malaysia’s relationship with those nations.

Malaysia condemns the misinformation about palm oil that has been spread in recent days in European newspapers by radical NGO activists, allied with protectionist EU industry lobbyists. Such deliberate falsehoods and misrepresentations are offensive, and have no place in informed political debate.

The Malaysian Government expects equal treatment for palm oil exports to Europe. The proposed ban would allow all other oilseed crops to continue operating under the RED, whereas palm oil will be excluded. This is a clear case of discrimination against palm oil producing countries. Any proposed language that does not treat palm oil equally with other oilseed crops will be considered equivalent to a ban, and will be fully opposed by the Malaysian Government.

Malaysian palm oil meets the strictest standards of sustainability required. Malaysian palm oil biofuels are certified as sustainable under the RED by leading European sustainability schemes, regulated by the EU Commission.

Critical Week Ahead for Palm Oil in Brussels

Round 2 for EU Trilogue Negotiation on Palm Oil Ban; Fake NGO Attacks Underway

On Tuesday 27th March, EU negotiators will sit down for Round 2 of the Trilogue negotiations on the Renewable Energy Directive (RED).

On one side of the table will be the Members of the European Parliament, who are committed to banning Palm Oil biofuels under the RED.

The EU Commission will also be present at the negotiations: the Commission has stated its position that a ban on Palm Oil would be discriminatory and against WTO rules. This is accurate, and helpful for Malaysian Palm Oil.

On the other side of the table, sits the Council – representing the 28 EU governments. Some of whom are supporting Malaysia, and opposing the ban on Palm Oil – notably Italy, Spain, and France who have all stated publicly their opposition to the ban.

Malaysia takes these positions as a matter of trust, and a promise to the people of Malaysia.

Some major EU countries, most notably Germany & the UK, have not declared any support for Malaysia. This is despite clear evidence of the negative impact on their economies if the EU triggers a trade war through an aggressive Palm Oil ban.

The divisions are clear in Brussels, between those who look to impose a discriminatory ban on Malaysian small farmers, and those who support Malaysia’s development.

However, radical European NGOs are on the attack in an attempt to flip the balance. Friends of the Earth, and Rainforest Foundation Norway, have spent millions of Euros in just one week to pressure the French Government to change their position.

Advertising was placed in all major French newspapers – a massive campaign expenditure aimed at undermining one of Malaysia’s key supporters in Europe. So who funded this huge outlay? It was co-funded by a French food manufacturer (protectionist) and the Norwegian oil-and-gas wealth fund (environmental hypocrites).

The French Government has taken the correct, and principled, position so far. They should stand firm in the face of protectionist and sensationalist bullying from the radical NGOs.

The positions of Palm Oil producing countries are clear. Malaysia, Indonesia and Thailand are not bluffing. The French Government, and all other EU leaders, need to consider the wider trade & cooperation agenda, and the EU’s broader national interests in Asia.

Minister Datuk Seri Mah Siew Keong reconfirmed the Malaysian Government’s position last week:

“We are taking a lot of efforts to fight the challenge. If the EU takes unfair actions against our palm oil, it will jeopardise the livelihood of our 650,000 oil palm smallholders. We do not want any conflict but if the EU presses us, I think nobody will benefit. There are bound to be retaliatory actions”.

Malaysians are not the aggressor here. The EU Parliament is. Any trade consequences would be because of the EU’s aggression.  This is no different from President Trump’s unprovoked trade sanctions attack against America’s European allies.

After Tuesday, the EU will take a one-month hiatus before the next Trilogue negotiation on RED. There is one significant risk for Palm Oil producers that needs to be addressed during that time – we will be looking at this in detail in a forthcoming blog. That is the risk of the EU instituting a ‘disguised ban’. This would be where the wording of the current ‘ban’ is removed, and new hidden criteria are introduced to exclude Palm Oil via a different – more subtle – route.

The EU may think such sleight-of-hand won’t be noticed. They are wrong.

Memo to Europe: We’re Not Bluffing

Ahead of the Second Trilogue for the Renewable Energy Directive (RED) on March 27th, a delusional narrative has taken hold in certain European capitals that the threat of trade retaliation from Palm Oil producing countries, specifically Malaysia and Indonesia, is a bluff. It’s the equivalent of saying Donald Trump is bluffing when it comes to his action on steel tariffs.

The case of the steel tariffs imposed by the U.S. Administration provides an important lesson for Europe.  Take German industry: all four major industry groups, the BDI, DIHK, BDA, and ZDH released a joint statement, to the effect that “German industry is extremely concerned about the decision of the U.S. government to impose far-reaching punitive tariffs … To prevent a spiral of protectionism, Germany and the European Union must continue to stand up the global world trade system”.

They are not dismissive of the moves by the Americans: it is being handled with the utmost seriousness. Commissioner Malmstrom has addressed the U.S. actions publicly on multiple occasions.

Why then is Brussels, and capitals like Berlin, dismissive of the threats of two of S.E. Asia largest economies, and their vow to enact retaliatory trade sanctions against European products if Europe moves ahead with the ban on Palm Oil? Why is this considered a “bluff”?

In case the European group think believes these threats are a bluff, and unserious, here’s a quick reminder of the most recent comments from leaders in these two countries:

  • “If they stop buying our palm oil, we will stop buying their products”- Mah Siew Keong, Minister of Plantation Industries & Commodities, Malaysia 
  • “When we look at the defence relationship with Europe, we cannot detach that from economic considerations as well […] We have to stand firm when it comes to the interests of our country and our people.” – Hishamuddin Hussein, Defence Minister, Malaysia
  • “Indonesia would consider taking retaliatory measures” – Pramono Anung, Cabinet Secretary, Indonesia

The evidence is crystal clear: the palm oil producing countries are not bluffing.

Perhaps one factor is the fact that Green NGOs, led by Transport & Environment (T&E) are pushing the line that this is a bluff. T&E is also in lockstep with the Green European Parliamentarians, by attempting to state that the proposed ban on palm oil ‘isn’t actually a ban’.

For those of us living outside Brussels: if palm oil is banned from being counted in the EU’s renewable energy programs (which is what is proposed), then it is a ban, pure and simple.

T&E and Green MEPs are also calling palm oil ‘unsustainable’ for the purposes of the EU renewables program. This is Orwellian doublespeak. The European Commission has gone to great lengths to ensure that all palm biodiesel being used in the RED is certified to European standards, and by European scientific certification schemes.

If anyone in Brussels needs evidence that this isn’t a bluff, they should visit the trade ministries of Kuala Lumpur and Jakarta. Better still, they should talk to some actual oil palm growers. The anger towards the European Union right now is real and palpable. This anger will increase exponentially if the ban is confirmed: and it will manifest itself in trade retaliation against European products.

Indonesia is already devising ways to make life difficult for European exporters. They’re well practiced at this. A few years ago, they made it nearly impossible for US exporters to deliver agricultural produce to Jakarta’s main port, meaning that most imports were spoiled. This was in response to numerous trade actions by the US government. The US discovered that Indonesia wasn’t bluffing; it was serious and prepared to act.

If the palm oil ban is enacted under the RED, the EU will learn the same lesson.

The fact that the EU has not yet grasped the seriousness of the issue is a major cause for concern.

The EU’s response to President Trump’s tariffs has been based on two principles: a) the threat to EU exports is real; and b) and global free trade must be defended against protectionism. The EU needs to adopt these two principles in the palm oil debate, too. The threat is real. The palm oil ban has to go.