POSITIVE DEVELOPMENTS FOR PALM OIL DESPITE ANTI-PALM OIL LOBBY

A NEWS ANALYSIS BY YONG SOO HEONG

KUALA LUMPUR, May 5 (Bernama) –- Malaysia’s palm oil industry is worth about
RM50 billion (US$1=RM3.2) annually and chances are that revenue may even touch
RM60 billion this year, if current prices remain steady until the end of the
year.

That crude palm oil is being sold at RM2,550 a tonne is certainly good news
for planters, smallholders and all those associated with the industry.

But then there are detractors. It has been reported that the European Union
(EU), through its environmental ministries and commissions, has been involved in
funding up to 70 per cent of the operating budgets of environmental NGOs in
efforts to paint a not-so-rosy picture about palm oil.

And these NGOs have been viciously campaigning against palm oil imports into
the EU, especially for biofuels, says Dr Yusof Basiron, CEO of the
Malaysian Palm Oil Council, who regards this as a "senseless and immoral attack
on exported commodities such as palm oil produced by developing countries."

Writing in his blog, he said, such funding implicates the EU for creating
barriers to trade for agricultural products from developing countries.


"Unlike the EU, developing countries do not have access to financial
resources to fight such government funded vicious campaigns. The eventual
outcome will be untold miseries where poor farmers in developing countries lose
their source of income as their export commodities are unable to enter the EU
market," he said.

This is something which palm oil-producing countries will have to seriously
address if the livelihood of their planters and farmers is to be safeguarded.
Almost half a million people are employed by the palm oil industry in Malaysia.

Interestingly, a campaign by Friends of the Earth to pressure the European
Commission (EC) to rule “a tree plantation is not a forest” that restricts the
recognition of palm oil as a renewable biofuel in the EU may have failed.

According to a newsletter produced by "Palm Oil – Green Development
Campaign", this means that the EC may classify oil palm plantations as forests,
which would therefore meet the sustainability criteria of the EU’s Renewable
Energy Directive (RED).

Under RED, land which used to contain primary forest prior to 2008 but no
longer does, cannot be used for biofuel feedstock to meet the EU’s 10 per cent
target under RED.

It has been reported that the draft guidelines define a "forested area" as
"areas where trees have reached, or can reach, at least heights of five metres,
making up a crown cover of more than 30 per cent". They would normally include
forest, forest plantations and other tree plantations such as palm oil.

"The EC’s position would therefore recognise that the important property of
tropical forests for climate change policy is the high sequestering capacity of
tropical foliage, tall wooded plants and multi-decade crop rotation.

Short rotation coppice [the practice of repeatedly cutting young tree stems
down] may qualify if it fulfils the height and canopy cover criteria," the
newsletter stated.

It would seem that the EC has recognised the environmental benefits of palm
oil as highly energy efficient, high yield and economically beneficial biofuel
as the oil palm trees sequester or remove more carbon dioxide than other biofuel
crops.

Another development that has put palm oil in positive light is research from
Wageningen University in the Netherlands which shows that “palm oil is the most
efficient energy crop.”

The university’s finding is a rejection of environmental NGOs and the
anti-palm oil lobbyists who consistently claim that palm oil is unsustainable.

Its research found that palm oil, sugar cane and sweet sorghum are currently
the most sustainable energy crops. These commodities also produce "far smaller
quantities of greenhouse gases than fossil fuels".

The university’s analysis considered nine different energy crops against
nine different sustainability criteria with palm oil coming out on top while
biofuel from maize from the United States and wheat from Europe scored far
lower.

The report’s author, Sander de Vries, concluded that sustainable sugar
canes and oil palms get the most energy per hectare and cause the least
environmental damage.

De Vries also highlighted a major advantage of the oil palm crop was that,
unlike other energy crops, it produces enough residue to power the oil
extraction processes.

Another positive development for palm oil took place in the European
Parliament
recently when Dr Gernot Pehnelt, founder and director of GlobEcon, an
independent research and consulting institute based in Germany, released a new
study that revealed the prejudiced nature of the EU's Renewable Energy
Directive towards foreign biofuels.

The report, entitled “European Policies Towards Palm Oil: Sorting Out Some
Facts,” demonstrated that the assumptions contained in the directive about the
ecological impact of foreign biofuels reflected political and not scientific or
economic reality.

Dr Pehnelt came to the defence of the rich biodiversity in oil palm
plantations, their excellent crown cover that oil palms provide and the yield
per hectare advantages of this low-energy and low-fertilizer crop.

"Sadly, many of the claims that foreign biofuels, specifically palm oil, are
a threat to the environment are seriously flawed, some even completely
unfounded,” he said, adding that the side effects of the flawed policies could
give rise to political friction and trade disputes to severe economic handicaps
for developing countries.

"This new study makes a strong case that RED discriminates against non-EU
producers of biofuels, such as Asian palm oil.

"Perhaps most importantly, palm oil acts as a substantial driver of economic
growth in the developing world, drastically reducing hunger and poverty in
regions that actively cultivate this valuable crop.

"It’s time for Europe to not only recognise the energy and environment
benefits of palm oil, but also the suffering in low-income, tropical countries
that palm oil critics continue to perpetuate," said Dr Pehnelt, who has been
invited by MPOC to speak on “European policies towards palm oil – setting the
record straight” at the International Palm Oil Sustainability Conference in Kota
Kinabalu from May 23 to 25.

The MPOC says that the conference will feature the latest developments,
breakthroughs and technologies related to the sustainable development of the
palm oil industry, with a focus on major issues such as Life Cycle Assessment
(LCA), carbon footprint, sustainable production, certification and branding,
biodiversity conservation and the corporate social responsibility of the palm
oil industry.

Over the years, palm oil has emerged to have a huge multiplier effect to the
Malaysian economy, with almost half a million people employed in the industry.

Additional workforce is also required to run downstream processing
industries as palm oil is a multi-commodity industry.

It is not just palm oil, but also palm kernel oil and palm kernel cake,
which have different market and applications. Oil palm biomass and methane can
also be used to produce electricity.

Currently, there are 600 million oil palms in Malaysia that could be also
harvested and converted into fibre products, including medium density fibre
boards as well as pulp and paper. Oil palms are also harvested to make
furniture.

"Put all this together, palm oil is a very important and vibrant industry,
which makes a lot of money for the country,” said MPOC's Dr Yusof.

Malaysia has been working very hard to make its palm oil industry
environmentally-friendly and socially responsible. Oil palm is only planted on
land designated for agricultural production.

Today, Malaysia still maintains 56 per cent of its total land area under
forest, thereby keeping its pledge made at the 1992 Rio Summit to keep at least
50 per cent of its land area under forest intact. It is certainly food for
thought for the detractors.

-- BERNAMA




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