RED Trilogue #4: Deadlock in Brussels

The fourth Trilogue on the Renewable Energy Directive (RED) took place in Brussels on 31st May; and as far as Palm Oil is concerned the situation is ‘as you were’.

Palm Oil was discussed only briefly during the Trilogue meeting, and that discussion was short and to the point. The EU Parliament continues to insist on a ban on Palm Oil biofuels. The EU Commission continues to oppose the ban.

To summarise more accurately, the positions of the three institutions are as follows:

  • The EU Parliament is still intent on imposing discriminatory protectionist trade barriers on Palm Oil that clearly break WTO rules – and will make Europe look and act like President Trump, who is declaring a global trade war on everyone.
  • The EU Commission remains committed to defending WTO rules, and Europe’s position in the world – and therefore opposes the Palm Oil ban.
  • The Council of the EU (made up of the 28 EU governments) remains divided.

Why is the Council divided? Strong and well-funded lobbying by rapeseed interests in Central and Eastern Europe means that many of those governments are now supportive of the Palm Oil ban.

The larger countries in the Council – including Spain, Italy, Netherlands, and France – remain opposed to the ban. Again, the WTO issue is to the fore, as well as the fact that a trade dispute would be highly damaging because these countries export a lot to ASEAN.

Others – including Germany and the U.K. remain uncommitted unsure of whether to grab the mantle of global trade leadership for Europe or surrender to a domestic minority and discriminate against South East Asian trading partners. Therefore, the Council does not have a unified position.

 

What happens now?

 

A period of reflection takes place in all three EU Institutions..

 

In the EU Parliament, the MEPs will discuss whether or not they should drop the ban, and instead agree to a compromise.

In the Council, a meeting of EU Energy Ministers is scheduled for 11 June. A new compromise proposal on Palm Oil is likely to be presented by the Bulgarian Presidency of the Council of the EU, and perhaps agreed by the Member State Ministers.

It is worth recalling that the EU Parliament has rejected all previous compromise proposals put forward by the Council. Will they ever be prepared to back down from their absolutist position?

 

From the perspective of producing countries there is only one test for any proposed compromise. Equal treatment.

Any final RED must commit to equal treatment between Palm Oil and EU-produced oilseeds. This ‘Equal Treatment’ principle is essential in order to satisfy WTO rules, and in order to prevent a damaging trade dispute with South East Asia and an erosion of European leadership in the region. It really is that simple.

The Member States supporting WTO and good trade links, as well as equitable treatment, should stand firm. France, Spain, Sweden, Italy, Netherlands and others have proven themselves to be committed to global rules and long-term mutually-beneficial trade. They have rejected the siren voices of protectionism who call for Palm Oil to be banned.

France and Total, in particular, has been targeted by bullying campaigns and guerrilla-like tactics from NGOs and trade unions – despite it being clear that French strategic interests at home and abroad, especially job creation, favour good relations with Palm Oil producing countries in Asia and Africa.

The support from France and others has attracted significant praise and gratitude across Palm Oil producing countries and regions.

To summarise, the RED battle continues: neither side has prevailed, and no final decision has been made. Triumphalism or defeatism on either side would clearly be premature.

As 13th June, and Trilogue #5 approach, thoughts in much of Europe – and the world – are turning away from politics, towards the football World Cup. It’s clear there is still everything to play for in the RED negotiations.