Frederic Laplanche acknowledged the association between palm oil and deforestation which he said had damaged the crop’s image, but added that things are changing.
“I can see that the Malaysian government is tackling the environmental issue and the trust deficit among the European consumers positively,” he said, citing Putrajaya’s Love MY Palm Oil campaign and its development of a policy to promote environmental protection.
Noting the policy’s aim to maintain over 50% of bio-diverse tropical rainforest and to cap Malaysia’s total area for palm oil at 6.5 million hectares from 5.8 million in 2018, he said “this is something that we can fully support”.
Laplanche also noted other developments including Sabah’s move to embrace Roundtable on Sustainable Palm Oil certification and the drive for Malaysian Sustainable Palm Oil certification at the federal level.
“Besides the primary industries ministry, the energy, science, technology, environment and climate change ministry has also listed down strong policies on renewable energy and solar development.
“The water, land and natural resources ministry has also developed policies to curb deforestation and encourage reforestation in degraded areas. All these put together make strong and credible policies for the environment,” he said.
Laplanche also said there is no ban on palm oil going into the EU. He said France and the EU as a whole are gradually withdrawing incentives for palm oil to be added into diesel mix.
“The reason (for withdrawing the incentives) is because the calculation that was made showed that there is a problem of balance and carbon impact.
“Although there is no ban, these measures will probably result in a reduction in the use of palm oil as a biofuel in Europe, depending on the prices of fossil fuel.
“Indeed, by withdrawing fiscal incentives, the economic case for adding palm oil into diesel could disappear because palm oil is more expensive than traditional fossil fuel at current market prices.
“But it is important to understand that it is not a ban. We are only talking about withdrawing an incentive, and only for palm oil as a biofuel. There is absolutely no change in policy regarding palm oil used for food products and basic material for the oleochemical industry at the French or EU level,” he said.
He said the EU had been among the first to introduce the incentive for biofuel and is among the last regions in the world to continue giving incentives for palm oil and biofuel.
“Most of the other countries have either never given incentives for palm oil to enter their markets as biofuel or had withdrawn them for a long time. So I would not like people to think that the EU is an enemy of palm oil, and of Malaysia. It’s not the case.”
He said the EU had consistently provided a large market for Malaysian palm oil, becoming the second largest customer for palm oil in the world, just behind India.
He also assured that the EU would not change import tariffs for palm oil, adding that these are in fact among the lowest in the world.
Paris recently published new statistics for France-Malaysia bilateral trade which showed an increase of 11.4% for Malaysian export to France last year across all products, reaching more than RM11 billion.
With a more modest 3.4% growth in French exports to Malaysia, the country registered almost RM2 billion trade surplus with France, an increase of 73% compared with 2017.
Asked if the EU would remain the world’s second largest buyer of palm oil, Laplanche said this would depend on the population and development in other countries.
“We have 500 million people, while China has about 1.4 billion population and India 1.3 billion population. But let me assure you that Europe will continue to be an important client of palm oil, including France,” he said.
In 2018, India was the largest palm oil buyer at 15%, followed by the EU (12%), China (11%), Pakistan (7%), the Philippines (4%), Turkey (4%) and the US (3%).