Has the EU Predetermined ‘High Risk’ Biofuels?
The EU’s Ambassador to Indonesia, Vincent Guérend, has raised eyebrows in the region by stating that the EU will phase out palm-oil based biofuels by 2030, according to comments reported in the Jakarta Post.
The problem with his comments is simple: the compromise text for the revised Renewable Energy Directive stated no such thing.
Just to remind, the agreed text of the European Commission, Parliament and Council stated two things.
First, that the European Commission would complete a report on ILUC (Indirect Land Use Change) and cropland expansion by February 2019, and that it would also construct a set of criteria for determining which biofuels can be certified as ‘low ILUC risk’ biofuels.
Second, it said that it would freeze ‘high risk’ biofuels at 2019 levels, and that by 2023, it would review these criteria with a view to phasing out ‘high risk’ fuels by 2030.
The compromise text should indicate that these decisions are yet to be made. The criteria, scientific report, are supposed to be based on the best available scientific information.
The reasonable question is whether the result has been predetermined; Ambassador Guérend’s words would indicate that this is the case.
Consider Guérend’s statement: “Provided the country succeeds in ensuring sustainable palm oil supply chains, we would be willing to reconsider the commodity’s eligibility in the EU market after 2030.”
It should be noted that Guérend hasn’t specified that high-risk or uncertified palm will be phased out; he has simply said that palm will be phased out.
This would mean that even under a RSPO-RED type certification – HCS prohibitions in place or not – palm would be banned from the RED.
This is undoubtedly the option that many EU policymakers are seeking, particularly in the Parliament and among member states. We would have hoped that the Commission would be the voice of reason, but Guérend appears to be indicating otherwise.
Unsurprisingly, Malaysia, Indonesia and other palm exporters – including Colombia and Thailand – have already raised the RED at WTO Technical Barriers to Trade meetings, and called for information on draft regulations; the EU has rebuffed these requests.
What will happen after February if the EU presses ahead? Palm oil exporters will undoubtedly seek to have the matter resolved via the WTO. This may put a dampener on progress in the EU-Indonesia trade negotiations. A dispute between Australia and Indonesia on antidumping actions on paper slowed progress in their bilateral negotiations, which are yet to be finalised.
CPOPC Steps Up On ILUC
Both Malaysia and Indonesia are hitting the road to lobby against the EU’s future biofuels rules. Last week, the Council of Palm Oil Producing Countries (CPOPC) issued a joint statement that was highly critical of the use indirect land use change in policy instruments. The clearest statement was as follows:
Governments in the developing world should be fearful of being drawn in to acknowledging, accepting or offering legitimacy to the ILUC scheme within the RED II.
The statement calls out the use of ILUC as a potential violation of WTO rules.
Malaysia’s Minister of Primary Industries Teresa Kok also visited both Switzerland and the European Union in order to see eye to eye on palm oil. The visit to Switzerland followed the Swiss senate narrowly blocking a motion to have palm oil left off the table in bilateral trade agreement negotiations between Switzerland and both Malaysia and Indonesia.
The two governments agreed to form a joint committee to cooperate on trade, sustainability and technology. As with most countries, for the Swiss, it’s the farm sector making the biggest noises on palm oil. The problems for Switzerland’s farmers haven’t been competition for imports into Switzerland, but the general non-competitiveness of European rapeseed oil in EU markets.
Minister Kok’s visit also took in the European Palm Oil Conference in Madrid.
Indonesian Trade Minister Lukita had virtually the same itinerary, visiting both Zurich and Madrid. The visit to the former was for the finalisation of the Indonesia-EFTA (European Free Trade Area – comprising Switzerland, Iceland, Norway and Liechtenstein) free trade agreement. Sources have indicated that this agreement is very close to completion.
The visit to Spain was also for the European Palm Oil Conference, where Minister Lukita spoke at the same session as Minister Kok. Indonesia has attempted to strengthen its existing regulatory regimes and certification schemes, though the robustness of both remains questionable.
Deforestation Data Gets Sharper
A new study by some of the world’s leading experts on deforestation has received little attention. Why? The story it tells isn’t quite what environmentalists want to hear.
Authors from the University of Arkansas’ Sustainability Consortium, along with Matt Hansen of the University of Maryland (home of Global Forest Watch) and esteemed scholars such as Nancy Harris, have remodelled Global Forest Watch (GFW) data.
Part of the problem with the GFW was that it could examine tree cover loss at a reasonably fine level – down to 30m2 – but couldn’t actually determine whether that tree cover loss was because of clearing for agriculture, pulp plantations, small-scale shifting agriculture, or part of regular forest harvesting operations, or even urbanization and oil palm replanting.
To remedy this, Hansen and co re-examined 15 years of data (2001 to 2015) and undertook ground-truthing to determine what is actually driving deforestation.
In short, this seems to have significantly improved the accuracy of the regional-level data.
So, original map-based estimates for forest loss in Southeast Asia indicate that large-scale farms and plantations in the region account for 78 per cent of forest cover loss and can be considered land-use change in a stricter sense, with shifting agriculture accounting for 9 per cent of forest loss. However, the revised results put the figures at 61 per cent for large-scale farms and plantations and 20 per cent for shifting agriculture.
There are also some other points worth noting. Tree cover loss in Southeast Asia is on par with that in Africa, but most African tree cover loss comes from shifting agriculture. The figures put large-scale farming deforestation in South America at more than double that of Southeast Asia. The distinction between shifting agriculture and large-scale agriculture isn’t arbitrary; the two are qualitatively different and this is noted by the authors, but there is crossover between the two, particularly when smallholders contribute to global commodity supply chains.
The study doesn’t disaggregate the data by country yet, and nor does it disaggregate by commodity, but imagine that to be the next step. Given that the bulk of deforestation in South American is driven by livestock and soy, and that according to an EU study just 11 per cent of deforestation in Indonesia comes from palm, we expect palm to be relatively low on the list of commodities.