The European Union (EU) suspended the implementation of a policy that would have banned the use of crude palm oil as a basic material for biofuel in 2020 and instead set a target of 2030 for the complete ban of palm oil. Environmentalists claim the use of palm oil is one of the leading causes of deforestation.

A meeting between the European Parliament, Commission, and Council produced a compromise related to crude palm oil imports which would have particularly impacted Malaysia and Indonesia. Last January, the European Parliament voted to ban the use of crude palm oil by 2020. But the decision sparked protests from both Southeast Asian nations, which are responsible for 85 percent of the world’s palm oil supply.

The EU’s new policy will start reducing crude palm oil imports gradually in 2023 before the complete banning effective in 2030. Until then, the percentage of palm oil in EU biofuel will be kept at 2019 levels.

Reaction to the EU policy was mixed. According to the Dutch lawmaker Bas Eickhout, the meeting’s outcome was a “remarkable breakthrough.” However, Eickhout, who participated in the negotiations and is a European Green Party lawmaker, also admitted his side had hoped for a quicker implementation of the crude palm oil ban.

Under current EU law, palm oil must come from certified sustainable plantations, but environmentalists point out that the use of palm oil diesel still produces three times the carbon emissions of fossil diesel.

“Certified or not, the use of palm oil from an environmental protection standpoint is more detrimental than the use of fossil fuels,” Eickhout added.

Indonesia and Malaysia’s reaction

Indonesia and Malaysia expressed relief in response to the EU decision. The Indonesian Palm Oil Farmers Association (Apkasindo) stated that the deadline extension will give the country more time to improve palm oil’s production management.

The Malaysian Palm Oil Council (MPOC) also stated that the EU decision was “very welcome” and made at the right time. MPOC also said in anticipation of the coming EU ban it would aggressively seek markets in other countries.

Palm Oil Industry: The only deforestation culprit?

Green activists and environmental organizations accuse the palm oil industry of causing massive deforestation and rainforest destruction. However, palm oil can also be a major economic contributor to a country’s GDP, especially in developing countries.

If properly and sustainably managed, palm oil can help reduce poverty. According to a World Bank report, with an expected population rise of 11.6 percent and a five percent hike in per capita consumption, an extra 28 million tons of vegetable oils will have to be produced annually by 2020. Palm oil can meet that demand with an extra 6.3 million hectares whereas soybean oil would need 42 million hectares of land.

A European Parliament resolution in 2017  sparked an outcry from Malaysia and Indonesia because it stated that the conversion of land to palm oil plantations alone contributed to 40 percent of deforestation. But an article from The Conversation explored the data and concluded that palm oil only contributes to 2.3 percent of global deforestation.

Where did the figure 40 percent come from? It came from Indonesia, where 25 million hectares of forest disappeared, of which 7.5 million hectares were used for agricultural production. Of these 7.5 million hectares, 2.9 million was converted to palm oil plantations (from 1990 t0 2008). Thus the 40 percent figure was extracted from data pertaining only to one country and was not global.

Besides palm oil plantations, other industries also played a role in causing a rapid deforestation in Indonesia from 2000 to 2010, as the Nature study stated; tree plantations for pulp (12.8 percent), forestry concessions (12.5 percent), industrial oil palm plantations (11 percent) and mining concessions (2.1 percent).

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