Indonesia and Malaysia explain to EU on palm-oil for biodiesel

Brussel, Belgium | September 13, 2008 by D-8 Secretariat

Malaysia and Indonesia want the European Union (EU) to consider their views pertaining to its directives on renewable energy and fuel quality, especially on the use of palm oil for the production of biofuel.

"Malaysia and Indonesia jointly account for 85 percent of global palm oil production. Therefore we hope the EU acknowledges and give us a chance to be heard," said Minister of Plantation Industries and Commodities, Datuk Peter Chin Fah Kui.

Chin said this to Malaysian and Indonesian journalists at joint press conference between both countries at the EU Parliament House here Thursday.

In the talk, Indonesia and Malaysia seek to reach a common perception and understanding regarding the palm oil with EU. Due to environmental reasons, EU views biodiesel from palm oil as low quality. The both countries wanted EU to apply fair standard to palm biofuel, similar to those of other bio-sources.

Earlier, Malaysia and Indonesia had a joint Roundtable Discussions with members of the European Parliament.

The discussion was chaired by Miroslav Ouzky, a member of EU Parliament.

Chin led the Malaysian delegation and Indonesia by Dr Anton Apriyantono, Minister of Agriculture.

In a joint communique issued after the roundtable, Malaysia and Indonesia expressed concern on the proposed emission savings for palm-based biodiesel in the EU directives on renewal energy which were below the specified threshold value of 35 percent.

"This will exclude palm oil and impose onerous requirements to provide actual data for each and every consignment of palm oil or biodiesel exported to the EU.

"The value set by the EU was based on secondary data, which may not be representative of the current scenario," Chin said.

On the implementation date of January 2008, he said both countries agreed that the EU directives, being a piece of legislation, should be effective prospectively and not retrospectively as this would be unfair to economic operators.

Chin said both countries propopsed a grace period of three years after the the directives came into force.

On the imposition of off-limit areas such as high carbon stock, high biodiversity and continuously deforested areas, both countries wished to reiterate the principle that this could not overule the national policies and regulations on their utilisation as this was regarded as sovereign rights.

He said the definitions of 'forest' and 'deforestation' were not clear and appeared to prevent the replanting of tree crops, such as rubber to palm oil which both countries believed were not the intention of the directives.

Chin said there was no clear definitions of 'high biodiversity grass land' and 'continuously forested area'.

"The methods of defining higher biodiversity and high carbon stock are not available in the directives.

"The directives were more focussed on the environmental (planet) aspect rather than taking into account the other two factors i.e. people and profit as provided for under the Roundtable on Sustainable Palm Oil," he said.

On the issue of food versus fuel, Chin said, both countries reitereated their agreement that no more than six million tonnes of crude palm oil would be allocated for fuel purposes.

"However, it is the prerogative of importing countries to balance the usage of palm oil between food and fuel," he said.

Last year Malaysia produced 15.82 million tonnes of crude palm oil, while Indonesia's output was 16.9 million tonnes.

Anton reminded that Indonesia is not a country under Annex 1 Kyoto Protocol that is bound to reduce emission greenhose gasses (GHG). And for Indonesia, palm oil is a very vital industry that provides live to millions of smallholders and support the poverty alleviation programs.

Chin and Anton were satisfied at the outcome of the Roundtable Discussions.

This roundtable represents the first time ministers from two major palm oil producing countries have come together to address market access issues.

After the roundtable in Brussel, Secretary General of D-8, Dipo Alam, had a discussion with Indonesian Agricultural minister, Dr. Anton, on his transit-way home in Istanbul. Alam said that he is also satisfied after listening to Anton's explanation, because renewable energy is among a program that has been campaigned by D-8 in Bali Summit, May 2006. "Up to now, we are still promoting cooperation among our memberstates to develop this renewable energy," said Alam.

Alam said that Malaysian and Indonesian explanation to EU is a good example of act taken together by memberstates of D-8, in order to face problems in trade and economical cooperation. In that short meeting with Indonesian agricultural minister, Alam also explained a number of D-8 programs such as Food Security Programs, and asked Indonesian government full support to participate actively in the program.

D-8 is scheduled to hold the 1st D-8 Ministerial Meeting on Food Security Program very soon, to set up real action plan to realise the program.

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