Palm oil: Malaysia can argue for exclusion from European ban

Yeah-Kim-Leng-palm-oil-eu-1PETALING JAYA: The European Union (EU) may have unfairly grouped Malaysia with countries that clear forests for oil palm cultivation, according to an economist.

Noting that there’s no massive clearing of Malaysian forests to make way for the crop, Yeah Kim Leng of Sunway University Business School said Putrajaya could make a strong argument for the country’s exclusion from a proposed EU ban of palm oil imports for use in the production of biodiesel.

“The ban is to stop tropical deforestation,” he said, “but unlike in some countries, we do not clear our forests to plant oil palms. We convert pieces of land previously used for other crops like rubber.”

Speaking to FMT, he acknowledged that there had been instances of forest clearing in Sabah and Sarawak for oil palm plantations but noted that the two states had regulations for the clearing of land and had large forest reserves that would be untouched.

He said the EU might be targeting countries without large forest reserves and Malaysia “could have been lumped together with those countries.”

He said Malaysia, with its high compliance standard, had been unfairly targeted. “There could be a case against unfair trade practices in the EU.”

The European Union Environment Committee voted to ban the use of palm oil in biodiesel last October. This was endorsed by the EU’s Industrial, Research and Energy Committee a month later. The European Parliament is expected to vote on the matter soon.

Malaysian leaders have said the country will retaliate by banning imports of European products.

Much of the oil palm sold to Europe is turned into biofuel.

Last week, Euractiv media reported that the campaign to ban palm oil in transport fuels had been given a helping hand by European ethanol producers, who have called on EU policymakers to differentiate biofuels according to their greenhouse gas emissions and sustainability credentials.

The European ethanol industry association, ePURE, claims that ethanol emits 64% less greenhouse gases than fossil fuels and is sourced almost 100% in Europe.

Ethanol is produced by distillation from crops such as wheat, corn, sugar cane and sugar beet. It has been shown that it can also be produced from agricultural residues and woody raw materials.

News reports recently quoted Felda chairman Shahrir Abdul Samad as saying the Malaysian government was “fully committed” to maintaining more than 50% of the country’s forest reserves.

Also, in an effort to meet the United Nation’s sustainable development goals, Malaysia has made it mandatory for oil palm smallholders nationwide to be certified under the Malaysian Sustainable Palm Oil (MSPO) by 2020.

Yeah said an EU ban would cripple thousands of smallholders.

He said he would advise them to consider growing rubber and other crops if no new markets were found for palm oil.

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