A decision by a key European Parliament committee last week to beef up sustainability criteria for agrofuels and tilt the Union's biofuel policy towards non food-based biofuels due to concerns over rising commodity prices has irritated top biofuel-exporting nations Indonesia, Malaysia and Brazil.
The main bone of contention in the report adopted by the Parliament's Industry and Energy Committee on 11 September is that it would require 40% of the EU's 10% biofuel goal to be met from "non-food and feed-competing" second-generation biofuels or from green electricity and hydrogen, while also demanding that agrofuels offer at least 45% carbon emission savings compared to fossil fuels – a figure that would rise to 60% in 2015.
Agrofuel market to decline?
Such a move would clearly put a dent in the growth of the agrofuel market coveted by producers in Brazil, Malaysia and Indonesia, as well as European farming nations.
Brazil, notably, is already heavily committed to agrofuel production as the world's largest exporter of ethanol made from sugar cane. The country is angry that the EU has been swayed by claims that agrofuels are to blame for recent rises in food prices and for plunging millions into poverty and starvation.
According to former Agriculture Minister Roberto Rodrigues, the fact that sugar cane plantations are eating up farmland while at the same time, Brazil produced more crops and beef than ever before last year, is proof that "there is not the least competition between sugar cane and food in Brazil".
Brazilian President Luiz Inácio Lula da Silva plans to defend biofuels at a UN General Assembly taking place next week, where he will tell other world leaders that ignoring biofuel's potential to boost development and create jobs would be the "real crime against humanity".
Malaysia and Indonesia, which together represent 85% of global palm oil production, are also eager to defend an industry that employs around five million people in their countries and have joined forces in a bid to convince the EU to reverse the decision.
Malaysian Plantation Industries Minister Datuk Peter Chin and Indonesian Agriculture Minister Anton Apriyantono have just returned from a week-long trip to Brussels and various EU countries, where they engaged with government officials and MEPs in a bid to convince them of the virtues of palm oil.
For them, as for much of the European biofuel industry, the key issue will be the final life-cycle CO2 reduction requirement decided by the EU. Indeed, typically, biodiesel made from European-grown rapeseed results in a greenhouse gas saving of 44% while the typical figure for ethanol made from EU sugar beet is 48%. According to EU figures, palm oil biodiesel produced in countries like Malaysia and Indonesia typically offers much lower savings, ranging from 32-38%.
Speaking at a World Sustainable Palm Oil Conference on 16 September, Chin insisted that their palm oil was already subjected to international sustainability criteria and the EU should not impose another level of certification. He further lashed out at the data methodology the EU used to calculate CO2 savings, saying they "result in an unfair disadvantage for palm oil-based biodiesel, understating typical CO2 emission savings by at least 20%". The Malaysian Palm Oil Council (MPOC) further stressed: "Certified sustainable palm oil is available in Malaysia. We trust that the EU will allow us to bring it to the European market."
According to Chin, the EU's move is illogical. He says the bloc would be unable to get its supply of biofuel once the three major raw materials for biofuels – palm oil, rape seed and soya – were excluded.
Indonesia's Apriyantono said the planned EU directive was purely aimed at reducing the continent's dependency on palm oil, which it cannot produce itself. "We are being attacked with environmental issues, while the real reason is trade competition, specifically with rapeseed," he said.
But European NGOs say palm oil producers in Indonesia and Malaysia are damaging the environment by planting crops in natural forests and in the middle of protected animal habitats, and accuse the industry of illegally logging rainforests and violating the rights of local communities.
And while Apriyantono does not deny that forests are being cleared for oil palm plantations, he highlights the relative size of the damage compared to the benefits of employing millions of people. "It's only a small proportion," he said, according to the Jakarta Post, saying that of the 133 million hectares of forests cleared in his country, oil palm plantations accounted for just 6.3 million hectares. "We should choose between human interests or those of the monkeys."
- 8 Oct. 2008: First reading vote on the EU's biofuel policy due in Parliament's plenary.
- 8 Dec. 2008: Council expected to reach a political agreement.