Palm oil no longer considered ‘biofuel’ in France

Total's biorefinery in La Mède, France.

In a rare revolt against the government, the French National Assembly has passed a bill explicitly saying palm oil “is not a biofuel” and won’t be eligible for tax breaks as of 1 January 2020. In Europe, a decision is expected in the coming weeks. EURACTIV France reports.

The fight against imported deforestation is slowly progressing. As part of the French finance bill for 2019, French MPs have just voted to end tax advantages benefitting agrofuels derived from palm oil.

Currently, palm oil imported into France to produce agrofuels benefits from a reduction in the general tax on polluting activities (TGAP). This provision, which was intended to promote the development of biofuels, will no longer benefit palm oil as of 1 January 2020.

This is because agrofuels based on palm oil “are not biofuels,” according to the French MPs who wrote the amendment.

EU strikes deal on 32% renewable energy target and palm oil ban after all-night session

Talks on renewable energy policy in Europe reached un unexpected breakthrough early this morning after negotiators from the European Parliament and  EU member states were able to reach a compromise on a 32% headline objective and a complete phase out of palm oil use in transport by 2030.

“Expanding palm oil plantations contributes to deforestation in Southern countries,” French MPs underlined in their amendment.

“Moreover, if the effect of indirect land-use change (ILUC) was included in the greenhouse gas balance, palm oil would be the most damaging biofuel for the climate,” they added.

However, it is not entirely certain that this tax advantage will be eliminated once and for all. Indeed, French MPs voted for the exclusion of palm oil as part of the 2019 finance bill. And the ban will only start applying as of 1 January 2020.

“This means that the provision will be discussed again during the finance bill for 2020,” explained Clément Sénéchal, climate and forest campaign officer at Greenpeace France.

And palm oil will likely be supported again on that occasion by the government and the French Senate, which rejected the amendment that was voted on by the National Assembly.

According to Greenpeace, the French government’s move was aimed to favour Total, which currently processes 300,000 tonnes of imported palm oil every year in its La Mède refinery in Southern France.

Without favourable tax arrangements, Total’s refinery could face losses of “€100 million a year” according to Christine Lavarde, a French MP from the conservative Les Républicains (LR) party.

“Despite the government’s last-ditch efforts to protect Total’s interests, French MPs have chosen the environmental cause. The net is closing on Total’s biorefinery in La Mède,” Sénéchal said.

European progress

At European level, the fight against imported deforestation related to palm oil is also making progress. On 17 December, the European Commission published a roadmap on deforestation and forest degradation. The text is open to a public consultation for four weeks.

At the end of this procedure, Brussels is expected to table a communication on the matter in the second quarter of 2019.

In its roadmap, the European Commission named soy, palm oil, beef, coffee and cocoa production as being responsible for 80% of deforestation in tropical countries. The roadmap also noted Europe’s responsibility, noting that the EU imports 25% of global palm oil production.

However, the roadmap does not consider introducing legislation at European level to curb imported products derived from deforestation.

Not enough done at EU level against imported deforestation

European imports of soy, cocoa and palm oil fuel deforestation in developing countries. The fight against the resulting collateral damage in Europe is complicated by agricultural interests.

At the moment, only voluntary initiatives are on the table. On the list of envisaged initiatives, the European Commission mentioned building “effective partnerships with producer countries” and promoting “sustainable and transparent supply chains.”

Environmental campaigners say this is not enough. “Future European action in deforestation should not be limited to promoting sustainable supply chains,” said Nicole Polsterer, from FERN, a forest NGO. “In order to achieve its objective of halting deforestation by 2020, the Commission has to present a new law to ensure that the EU’s supply chains are free of products derived from deforestation,” she said.

Agrofuels vs biofuels

Besides the deforestation roadmap, the European Commission is also expected to decide  in the coming weeks on a definition of risks related to indirect land-use change (ILUC), which happens when farmers drop food cultivation in favour of fuel crops.

The criteria should help progressively eliminate agrofuels that contribute to deforestation, in line with the provisions of the EU Renewable Energy Directive (RED II), which was revised in 2018.

Palm oil to be phased out in EU by 2030

The use of palm oil as fuel should disappear in Europe by 2030 under a reform of the bloc’s renewable energy laws agreed this morning after all-night negotiations.

The EU decision on ILUC criteria is also eagerly awaited by the National Assembly.

French MPs said the amendment on palm oil sends “a strong message to Europe” about their determination to fight agrofuels that contribute the most to deforestation.

Palm oil ban on the ropes as Commission weighs options

Under the EU’s new renewable energy rules, the European Commission has to define criteria that are meant to curb the use of the most climate-damaging biofuels. A new study warns that if handled incorrectly, the use of fuels like palm oil will increase instead of being phased out.

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