Palm Oil. A Convenient Distraction for Weak Policies on Climate Change
Shell. The brand is synonymous with fossil fuels which has brought so much grief to the world as a primary cause of climate change. The company must have heard the death knell on fossil fuels as it ramps up its transition from fossil fuels to renewable energy.
Shell has been making the moves to avoid being a victim of climate change itself. According to information on its website:
Shell aims to reduce the production of traditional fuels by 55% by 2030 and provide more low-carbon fuels such as biofuels for road transport and aviation, and hydrogen.
A range of certified sustainable vegetable oils, such as rapeseed, will supplement the waste feedstocks until even more sustainable advanced feedstocks are widely available. The facility will not use virgin palm oil as feedstock.
Shell has clearly taken a page off Total Energies, a massive energy provider which preceded with a statement that Total will stop using palm oil as a feedstock at its 500,000 t/yr La Mede hydrotreated vegetable oil (HVO) unit in southern France by 2023.
Workers at the plant said that palm oil will largely be replaced by domestically-produced rapeseed oil (RSO), and that TotalEnergies is considering increased used of used cooking oil (UCO).
Germany would appear to be following that step as it repeated its stance against palm oil. Unlike Total Energies which faced a blockade by French rapeseed farmers, Germany maybe more wary of lawsuits as reported by Politico.
German activists have launched their own legal actions against German automakers for not committing to emissions targets.
In May last year, Germany’s top court ruled the country’s climate law was not doing enough to protect future generations. It set carbon emissions budgets for major economic sectors, increased the percentage by which emissions must be reduced from 1990 levels by 2030 to 65% from 55%, and stated that Germany as a country must be carbon-neutral by 2045.
Other activists have decried Germany’s continued push to expand its coal mines as the country holds the dubious distinction of being the largest miner of lignite coal, one of the dirtiest and cheapest fossil fuels which is responsible for a fifth of Germany's carbon emissions.
This refusal to tackle climate change meaningfully has been criticized by United Nations SecGen Antonio Gutierres who excoriated members for choosing a “catastrophic pathway” on climate change that is leading to a “massive loss of lives and livelihoods.”
The use of biofuels as a sustainable source of energy is a contentious one but it has to be better than lignite coal. As for Germany’s very public statement on not including palm oil in its biofuels mix, it should be seen as merely a distraction from its weak policies. With palm oil accounting for a mere 3.9% of biofuel feedstock, no one should seriously consider this action as meaningful step towards fighting climate change.
Double Standards Will Further Fail EU Climate Change Ambitions
Palm oil producing countries have called out the double standard that exists in the energy sector of developed nations.
The best way to gauge if the arguments presented by palm oil producing countries has any merit is to compare it to what German minister Svenja Schulze said about biofuels.
"For biofuels to be produced it is not acceptable to cut down woods, to dry up moorland and to destroy nature"
If peatlands are so important to fighting climate change, what of the peat areas in Germany where 95% of it has been drained for agriculture? The Oil Palm has an exhaustive list of where European peatlands are causing emissions from peat disturbances to the use of fertilizers to grow European rapeseed for biofuels.
This should be a point of concern not just for policy makers in Germany but for Shell and Total. All three entities are depending on European rapeseed as primary feedstock.
As for the second favored source of feedstocks for biofuels which is Used Cooking Oil or UCO, the current directive (RED) does not distinguish between domestically collected oils and those which are imported from third countries.
According to reports, more than half the Used Cooking Oil (UCO) used in Europe for biodiesel in 2019 was imported. The biggest share came from China with 34% and 20% from palm oil producing countries.
This should be a point of concern for Minister Schulze as China imports on average, ten times more soy than palm oil which means its source of UCO has a high chance of causing deforestation in soy production countries like Brazil.
Obvious Discrimination Against Palm Oil in Certification Exclusion
The discrimination against palm oil is obvious when soy oil with its dubious environmental impact has a bigger share of German biodiesel production. According to Biofuels Central:
Of about 3.4 million tonnes of biodiesel produced in Germany in 2020, rapeseed oil made up about 60% of raw materials, used edible oils collected from food processors and restaurants around 25%, palm oil 3.9% and the rest was mainly soyoil.
This means that soy has around 10% usage compared to 3.9% for palm oil.
This preferential treatment for all other vegetable oil feedstocks that is not palm oil is unmistakable in the RED ll Transposition by Member States and Voluntary Schemes which talks about acceptable certification by Voluntary Schemes but includes a definite shut out of palm oil from qualifying. Even if it is certified.
This has competing vegetable oil producing countries licking their chops at the prospect of filling the EU’s needs.
Soybeans from Canada for example, do not have a national certification but are able to sell to the EU without restriction as long as the company has some sort of certification.
This is most likely certification under the International Sustainability and Carbon Certification (ISCC) scheme which the Canadian canola industry relies on to qualify its production under RED.
Australian canola exports to Germany which are presumably certified by ISCC as well have soared this year to make up for poor harvests in Germany.
So how is canola from Australia or Canada any different from palm oil from Southeast Asian countries when they are all certified under the ISCC?
What else can palm oil producing countries do?
Therefore happy to meet #ASEAN Economic Ministers today. We committed to deepen our cooperation & work to reform @wto, in support of rules-based multilateralism
The slick politician that he is, is hoping to fix EU-ASEAN relationships which have soured due to the EU’s singling out of palm oil as bad for biofuels.
His reference to a weak WTO that needs reform is a direct poke at the complaints filed by Indonesia and Malaysia against the EU’s discriminatory policy against palm oil. There is nothing wrong with the WTO. It has worked well judicially to resolve international matters unless of course, one party finds that it disagrees with their opinions.
The most important point for palm oil producing countries to watch, is a potential second hammer that the EU could use against palm oil producing countries. A leaked EU report prepared by the EU Commission on a proposed anti deforestation law has omitted fragile grasslands and wetlands like those upon which European rapeseed or Latin American soy is grown.
The biggest concern for palm oil producing countries is how the plans would create a new classification for countries that export to the EU. It is unthinkable that Brazil could qualify as low risk in light of the recent data on land use change in that country while palm oil producing countries with their actions to stem deforestation could be classified as high risk.
Published October 2021. CSPO Watch
Shell has been making the moves to avoid being a victim of climate change itself. According to information on its website:
Shell aims to reduce the production of traditional fuels by 55% by 2030 and provide more low-carbon fuels such as biofuels for road transport and aviation, and hydrogen.
A range of certified sustainable vegetable oils, such as rapeseed, will supplement the waste feedstocks until even more sustainable advanced feedstocks are widely available. The facility will not use virgin palm oil as feedstock.
Shell has clearly taken a page off Total Energies, a massive energy provider which preceded with a statement that Total will stop using palm oil as a feedstock at its 500,000 t/yr La Mede hydrotreated vegetable oil (HVO) unit in southern France by 2023.
Workers at the plant said that palm oil will largely be replaced by domestically-produced rapeseed oil (RSO), and that TotalEnergies is considering increased used of used cooking oil (UCO).
Germany would appear to be following that step as it repeated its stance against palm oil. Unlike Total Energies which faced a blockade by French rapeseed farmers, Germany maybe more wary of lawsuits as reported by Politico.
German activists have launched their own legal actions against German automakers for not committing to emissions targets.
In May last year, Germany’s top court ruled the country’s climate law was not doing enough to protect future generations. It set carbon emissions budgets for major economic sectors, increased the percentage by which emissions must be reduced from 1990 levels by 2030 to 65% from 55%, and stated that Germany as a country must be carbon-neutral by 2045.
Other activists have decried Germany’s continued push to expand its coal mines as the country holds the dubious distinction of being the largest miner of lignite coal, one of the dirtiest and cheapest fossil fuels which is responsible for a fifth of Germany's carbon emissions.
This refusal to tackle climate change meaningfully has been criticized by United Nations SecGen Antonio Gutierres who excoriated members for choosing a “catastrophic pathway” on climate change that is leading to a “massive loss of lives and livelihoods.”
The use of biofuels as a sustainable source of energy is a contentious one but it has to be better than lignite coal. As for Germany’s very public statement on not including palm oil in its biofuels mix, it should be seen as merely a distraction from its weak policies. With palm oil accounting for a mere 3.9% of biofuel feedstock, no one should seriously consider this action as meaningful step towards fighting climate change.
Double Standards Will Further Fail EU Climate Change Ambitions
Palm oil producing countries have called out the double standard that exists in the energy sector of developed nations.
The best way to gauge if the arguments presented by palm oil producing countries has any merit is to compare it to what German minister Svenja Schulze said about biofuels.
"For biofuels to be produced it is not acceptable to cut down woods, to dry up moorland and to destroy nature"
If peatlands are so important to fighting climate change, what of the peat areas in Germany where 95% of it has been drained for agriculture? The Oil Palm has an exhaustive list of where European peatlands are causing emissions from peat disturbances to the use of fertilizers to grow European rapeseed for biofuels.
This should be a point of concern not just for policy makers in Germany but for Shell and Total. All three entities are depending on European rapeseed as primary feedstock.
As for the second favored source of feedstocks for biofuels which is Used Cooking Oil or UCO, the current directive (RED) does not distinguish between domestically collected oils and those which are imported from third countries.
According to reports, more than half the Used Cooking Oil (UCO) used in Europe for biodiesel in 2019 was imported. The biggest share came from China with 34% and 20% from palm oil producing countries.
This should be a point of concern for Minister Schulze as China imports on average, ten times more soy than palm oil which means its source of UCO has a high chance of causing deforestation in soy production countries like Brazil.
Obvious Discrimination Against Palm Oil in Certification Exclusion
The discrimination against palm oil is obvious when soy oil with its dubious environmental impact has a bigger share of German biodiesel production. According to Biofuels Central:
Of about 3.4 million tonnes of biodiesel produced in Germany in 2020, rapeseed oil made up about 60% of raw materials, used edible oils collected from food processors and restaurants around 25%, palm oil 3.9% and the rest was mainly soyoil.
This means that soy has around 10% usage compared to 3.9% for palm oil.
This preferential treatment for all other vegetable oil feedstocks that is not palm oil is unmistakable in the RED ll Transposition by Member States and Voluntary Schemes which talks about acceptable certification by Voluntary Schemes but includes a definite shut out of palm oil from qualifying. Even if it is certified.
This has competing vegetable oil producing countries licking their chops at the prospect of filling the EU’s needs.
Soybeans from Canada for example, do not have a national certification but are able to sell to the EU without restriction as long as the company has some sort of certification.
This is most likely certification under the International Sustainability and Carbon Certification (ISCC) scheme which the Canadian canola industry relies on to qualify its production under RED.
Australian canola exports to Germany which are presumably certified by ISCC as well have soared this year to make up for poor harvests in Germany.
So how is canola from Australia or Canada any different from palm oil from Southeast Asian countries when they are all certified under the ISCC?
What else can palm oil producing countries do?
- Palm oil producing countries must step up their public campaigns to show off their conservation efforts vs other veg oil producing countries. The EU is choosing sides according to what is more popular but rather than targeting the environmental damage caused by other crops, the palm oil industry should focus on a heavy dose of what they are doing to meet conservation concerns.
- Palm oil producing countries must ignore ignore the slick sales pitch of EU public officials like Valdis Dombrovski, the Executive Vice-President for the EU Commission who tweeted:
Therefore happy to meet #ASEAN Economic Ministers today. We committed to deepen our cooperation & work to reform @wto, in support of rules-based multilateralism
The slick politician that he is, is hoping to fix EU-ASEAN relationships which have soured due to the EU’s singling out of palm oil as bad for biofuels.
His reference to a weak WTO that needs reform is a direct poke at the complaints filed by Indonesia and Malaysia against the EU’s discriminatory policy against palm oil. There is nothing wrong with the WTO. It has worked well judicially to resolve international matters unless of course, one party finds that it disagrees with their opinions.
The most important point for palm oil producing countries to watch, is a potential second hammer that the EU could use against palm oil producing countries. A leaked EU report prepared by the EU Commission on a proposed anti deforestation law has omitted fragile grasslands and wetlands like those upon which European rapeseed or Latin American soy is grown.
The biggest concern for palm oil producing countries is how the plans would create a new classification for countries that export to the EU. It is unthinkable that Brazil could qualify as low risk in light of the recent data on land use change in that country while palm oil producing countries with their actions to stem deforestation could be classified as high risk.
Published October 2021. CSPO Watch
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