Palm Oil Curbs: EU looks to eliminate commodity from biofuel mixes

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Europe

It's a crop that supports millions of people in Malaysia and Indonesia, but palm oil is also tarred by allegations of unsustainability and that it contributes to deforestation. Citing environmental concerns, the European Parliament has voted to curb its use in biofuel mix by 2021. However, the governments of its big producers are vowing to fight the ban. Rian Maelzer reports from Malaysia.

Smallholder farmers grew around 40 percent of the 20 million tonnes of palm oil Malaysia produced last year. Growing palm oil has helped lift many of the country's 650,000 smallholders and their families out of poverty.

MUHD SAFIE ABU BAKAR PALM OIL SMALLHOLDER "Life used to be very hard. We lived in a small wooden house. I saved, saved, saved and increased my land from 4 to 12 hectares. With the money from palm oil, I've been able to build a good quality house, buy a pick-up truck and car, and send my kids to college."

Some Malaysian small holders recently took to the streets to voice their opposition to the EU move to ban palm oil from its biofuel mix. The worry is that it will cause a drop in demand and prices, with the EU the second biggest buyer of palm oil behind India and just ahead of China.

MAH SIEW KEONG MALAYSIAN MINISTER OF PLANTATION INDUSTRIES "To me, it is not about the environment. It is trade protectionist. So that's why I say it is also a black day for free trade. By 2021, only palm oil cannot be used in biodiesel; rapeseed oil and other oils can still be used till 2030. That is discriminatory."

The ban still has to clear a couple of legislative hurdles, and Malaysia and Indonesia, who produce 90 percent of the world's palm oil, will be lobbying hard to block the move.

RIAN MAELZER SELANGOR, MALAYSIA "Most large companies have obtained certification from the Roundtable for Sustainable Palm Oil. And both Indonesia and Malaysia also have national certification programmes to try to ensure that all growers including smallholders produce sustainably.

MAH SIEW KEONG MALAYSIAN MINISTER OF PLANTATION INDUSTRIES "It involves lots of costs and procedures. It's expensive, but we are determined to show that we are serious about sustainable palm oil."

Malaysia and Indonesia will not only argue that the ban is unjustified on environmental and trade grounds. They will also highlight to European lawmakers how crucial palm oil is to the quality of life of millions of their people. Rian Maelzer, CGTN, Selangor, Malaysia.