EU Legislation on Deforestation Palm Oil’s Moment to Shine
The European Union is expected to pass legislation to reduce deforestation in its consumption.
As reported in Bloomberg and other mainstream media:
The European Commission, the 27-nation bloc’s executive arm, wants the regulation to cover soy, beef, palm oil, wood, cocoa and coffee, as well as some derived products such as chocolate, leather and furniture. The plan will require backing from member states and the European Parliament to enter into force.
Assuming that the regulation which targets imports specifically is approved by the European Parliament, this will be a moment for the global palm oil industry to shine.
As reported in Bloomberg and other mainstream media:
The European Commission, the 27-nation bloc’s executive arm, wants the regulation to cover soy, beef, palm oil, wood, cocoa and coffee, as well as some derived products such as chocolate, leather and furniture. The plan will require backing from member states and the European Parliament to enter into force.
Assuming that the regulation which targets imports specifically is approved by the European Parliament, this will be a moment for the global palm oil industry to shine.
However, any EU legislation that zeroes in on forests and deforestation will fail to completely address agriculture as a cause of climate change and biodiversity loss. You can read all about the proposed regulation here. It is a long read that goes into details on deforestation and the definition of forests. Based on the absolute focus on forests and their importance to climate change, one can assume that this regulation will do little in the way of reducing emissions from agricultural activities.
Fighting Climate Change and Biodiversity Loss Beyond ‘Forests’
For one thing, the elephant in the room of agricultural emissions is not being acknowledged. The climate changing gases of methane and nitrous oxide from agricultural activities is a mere side note despite the knowledge that these two gases are huge contributors to climate change.
For another thing, the leaked document on the EU Commission’s proposals to fight climate change and biodiversity loss provoked strong reactions from conservationists which lambasted the draft report for failing to include carbon and biodiversity rich areas like grasslands and wetlands. The draft excluded crops like rubber and maize which have their equal share of environmental destruction.
The WWF published a report in September which detailed just how bad this destruction is.
More than 50,000 fires and almost 4,000 km² of destroyed land so far in 2021 in the Cerrado, the biggest soy supplier to the EU.
Soy is the commodity with the largest embedded tropical deforestation imported into the EU and is predominantly used for animal feed. In 2018, 23% of EU soy imports from South America came from the Cerrado and a whopping 70% of EU-imported soy linked to deforestation and conversion was concentrated in this biome. Nevertheless, recent media reports suggest that the eagerly expected legislative proposal for a new EU law to tackle imported deforestation will only focus on forests, turning a blind eye to the ongoing EU-driven destruction of the Cerrado and other grasslands.
The EU is unwittingly contributing to the loss of rare bird species, to rivers running dry and to violence against local communities in the region by importing soy and beef that are produced at the cost of native vegetation. Europeans consume ‘hidden soy’ in cheese, milk, eggs and meat and we simply don’t know whether it comes at the expense of precious biodiversity.”
Aside from soy which is now included in the EU’s draft legislation, the exclusion of maize or corn has led to the EU’s own renewable energy sector to question the rising volumes of ethanol imports at a time when the EU is claiming to be a climate change champion.
Imports from the U.S. grew by 53%, from 286 million Ml in 2019 to 437 Ml in 2020; imports from Brazil skyrocketed from 17 Ml in 2019 to 238 Ml in 2020; and Canada registered more than a five-fold increase from 15 Ml in 2019 to 89 Ml in 2020, benefiting from the CETA eliminating tariffs on these imports.
There are other threats on the horizon. If ratified, the EU’s agreed deal with the Mercosur bloc of South American countries would open the floodgates to even more imports of ethanol from Brazil – potentially up to 70% of the EU market for industrial ethanol.
COCERAL, FEDIOL and FEFAC, which represent the EU grain and oilseed trades expressed support for the EU Commission’s ambition in taking a leading role in the fight against deforestation but expressed concern.
However, the set of requirements contained in the new legislation gives priority to the objective of ‘cleaning up’ EU supply chains from goods potentially associated with deforestation, rather than focusing on curbing the issue at origin. “We are concerned that the regulation would not have the desired impact in producer countries, where deforestation remains a serious issue.” said Philippe Mitko, President of COCERAL. “The EU risks missing out on an opportunity for a global leadership role in ending deforestation.”
With the EU’s preference to target crops rather than production systems, it looks like Brazilian ethanol with its decimation of fragile grasslands and savannahs will enjoy a free piggyback ride as the EU does not want another trade war with the US.
The influential Friends of the Earth Europe published a response that warned of the pending failure of the EU legislation:
The new rules would prohibit the import into the EU of commodities produced on land that’s been deforested or degraded after 31-12-2020 or in breach of the country’s production laws.
The ‘deforestation-free’ mark will only apply to products that were produced on forest land that hasn’t been subjected to deforestation or forest degradation, but excludes other ecosystems like savannahs, grassland, wetlands, peatlands, mangroves
This sentiment was echoed by FERN Europe which lauded the regulation but warned that it needs more work before it can be effective to fight climate change.
Palm Oil’s Time to Shine
There is no reason to doubt that the proposed regulation will be adopted by the European Parliament in one form or another. The absence of rubber or maize in the list of targeted commodities may never be rectified but in the meantime, palm oil producing countries have good reason to support the regulation.
Where the palm oil industry will shine in comparison to soy or beef or coffee is that the bulk of the EU’s palm oil imports will be able to prove that they were not produced on land that was deforested after December 2020.
As much as environmental groups may protest against what appears to a ‘loophole’, the cut off date of December 2020 is a realistic acknowledgement by the EU that it has to serve notice of its intentions to exporting countries and provide time enough for its import sources to meet the requirements.
The Indonesian Palm Oil Association GAPKI will have reason to celebrate as the association had long argued that legality of operations and co-operation between countries must be the focus of the EU regulation.
The Malaysian palm oil industry may have more reasons to celebrate as the country’s investment into a national certification scheme the MSPO makes its case even as the EU regulation shuts down voluntary certification schemes.
The casual observer of the anti palm oil campaigns and the EU’s position on palm oil may find it ironic that decades of anti palm oil campaigns has led to this moment where palm oil as a commodity, is most prepared to meet all of the EU’s requirements on land use management and transparency.
Published November 2021. CSPO Watch
Fighting Climate Change and Biodiversity Loss Beyond ‘Forests’
For one thing, the elephant in the room of agricultural emissions is not being acknowledged. The climate changing gases of methane and nitrous oxide from agricultural activities is a mere side note despite the knowledge that these two gases are huge contributors to climate change.
For another thing, the leaked document on the EU Commission’s proposals to fight climate change and biodiversity loss provoked strong reactions from conservationists which lambasted the draft report for failing to include carbon and biodiversity rich areas like grasslands and wetlands. The draft excluded crops like rubber and maize which have their equal share of environmental destruction.
The WWF published a report in September which detailed just how bad this destruction is.
More than 50,000 fires and almost 4,000 km² of destroyed land so far in 2021 in the Cerrado, the biggest soy supplier to the EU.
Soy is the commodity with the largest embedded tropical deforestation imported into the EU and is predominantly used for animal feed. In 2018, 23% of EU soy imports from South America came from the Cerrado and a whopping 70% of EU-imported soy linked to deforestation and conversion was concentrated in this biome. Nevertheless, recent media reports suggest that the eagerly expected legislative proposal for a new EU law to tackle imported deforestation will only focus on forests, turning a blind eye to the ongoing EU-driven destruction of the Cerrado and other grasslands.
The EU is unwittingly contributing to the loss of rare bird species, to rivers running dry and to violence against local communities in the region by importing soy and beef that are produced at the cost of native vegetation. Europeans consume ‘hidden soy’ in cheese, milk, eggs and meat and we simply don’t know whether it comes at the expense of precious biodiversity.”
Aside from soy which is now included in the EU’s draft legislation, the exclusion of maize or corn has led to the EU’s own renewable energy sector to question the rising volumes of ethanol imports at a time when the EU is claiming to be a climate change champion.
Imports from the U.S. grew by 53%, from 286 million Ml in 2019 to 437 Ml in 2020; imports from Brazil skyrocketed from 17 Ml in 2019 to 238 Ml in 2020; and Canada registered more than a five-fold increase from 15 Ml in 2019 to 89 Ml in 2020, benefiting from the CETA eliminating tariffs on these imports.
There are other threats on the horizon. If ratified, the EU’s agreed deal with the Mercosur bloc of South American countries would open the floodgates to even more imports of ethanol from Brazil – potentially up to 70% of the EU market for industrial ethanol.
COCERAL, FEDIOL and FEFAC, which represent the EU grain and oilseed trades expressed support for the EU Commission’s ambition in taking a leading role in the fight against deforestation but expressed concern.
However, the set of requirements contained in the new legislation gives priority to the objective of ‘cleaning up’ EU supply chains from goods potentially associated with deforestation, rather than focusing on curbing the issue at origin. “We are concerned that the regulation would not have the desired impact in producer countries, where deforestation remains a serious issue.” said Philippe Mitko, President of COCERAL. “The EU risks missing out on an opportunity for a global leadership role in ending deforestation.”
With the EU’s preference to target crops rather than production systems, it looks like Brazilian ethanol with its decimation of fragile grasslands and savannahs will enjoy a free piggyback ride as the EU does not want another trade war with the US.
The influential Friends of the Earth Europe published a response that warned of the pending failure of the EU legislation:
The new rules would prohibit the import into the EU of commodities produced on land that’s been deforested or degraded after 31-12-2020 or in breach of the country’s production laws.
The ‘deforestation-free’ mark will only apply to products that were produced on forest land that hasn’t been subjected to deforestation or forest degradation, but excludes other ecosystems like savannahs, grassland, wetlands, peatlands, mangroves
This sentiment was echoed by FERN Europe which lauded the regulation but warned that it needs more work before it can be effective to fight climate change.
Palm Oil’s Time to Shine
There is no reason to doubt that the proposed regulation will be adopted by the European Parliament in one form or another. The absence of rubber or maize in the list of targeted commodities may never be rectified but in the meantime, palm oil producing countries have good reason to support the regulation.
Where the palm oil industry will shine in comparison to soy or beef or coffee is that the bulk of the EU’s palm oil imports will be able to prove that they were not produced on land that was deforested after December 2020.
As much as environmental groups may protest against what appears to a ‘loophole’, the cut off date of December 2020 is a realistic acknowledgement by the EU that it has to serve notice of its intentions to exporting countries and provide time enough for its import sources to meet the requirements.
The Indonesian Palm Oil Association GAPKI will have reason to celebrate as the association had long argued that legality of operations and co-operation between countries must be the focus of the EU regulation.
The Malaysian palm oil industry may have more reasons to celebrate as the country’s investment into a national certification scheme the MSPO makes its case even as the EU regulation shuts down voluntary certification schemes.
The casual observer of the anti palm oil campaigns and the EU’s position on palm oil may find it ironic that decades of anti palm oil campaigns has led to this moment where palm oil as a commodity, is most prepared to meet all of the EU’s requirements on land use management and transparency.
Published November 2021. CSPO Watch