Ministry confident in M’sian palm oil’s potential despite challenges from EU’s biodiesel policy

Datuk Zuraida Kamaruddin

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KUCHING, July 5: The Ministry of Plantation Industries and Commodities (MPIC) is confident in the country’s palm oil potential despite challenges from the European Union’s (EU) biodiesel policy.

Its minister, Datuk Zuraida Kamaruddin, said in a media statement today that there are several advantages to using palm oil to produce biofuel.

“Unlike fossil fuels, the combustion of palm oil biofuel does not increase the level of carbon dioxide in the atmosphere as the oil is merely returning carbon dioxide obtained from the atmosphere through photosynthesis. As such, biofuel is regarded as carbon neutral.

“Since carbon dioxide is a greenhouse gas responsible for global warming, the world benefits by burning biofuel instead of fossil fuel,” she said.

She also said that palm trees that produce oil absorb more carbon dioxide during photosynthesis to form biomass for the other parts of the plant as the tree continues to absorb carbon dioxide throughout its 25 to 30-year lifespan.

“Even as the world has gradually recognised the role of biofuel, the EU never ceases to amaze with its discriminatory protectionism policy with regard to palm oil.

“Interestingly, palm oil opponents have also criticised the EU for treating another vegetable oil — namely, soybean oil — as low risk. They argue that soy cultivation can be as harmful to the environment and climate change, perhaps even more so than palm oil.

She explained that as palm oil production is alleged to lead to deforestation and biodiversity losses, replacing it with other types of vegetable oils could be even more detrimental to the environment, according to a report by the International Union for Conservation of Nature (IUCN).

“The key factor is the high yield of oil palms with other oil crops requiring up to nine times as much land to produce the same volume of vegetable oil,” she said.

As it is, she said, the MPIC must come to terms with a potentially steady decline of palm-based biofuels imports from the EU with exports this year.

“Biodiesel exports from Malaysia are pegged to decline to 250,000 tonnes from 300,000 tonnes a year ago, while production is pegged to rise to 1.2 million tonnes from one million tonnes in 2021 based on data from Palm Oil Analytics.

“To re-cap, Malaysia has initiated legal action against the EU and two of its members — France and Lithuania – on January 15, 2021 under the World Trade Organisation’s (WTO) Dispute Settlement Mechanism after the EU implemented the European Union Renewable Energy Directive II without considering Malaysia’s commitment and views.

“Such a classification exercise will affect palm oil being a potential biofuel source since its usage will be gradually reduced beginning in 2023 before being ‘eliminated totally’ as an EU biofuel source in 2030.

“On my part, I will ensure that MPIC and related agencies step up efforts to engage with stakeholders overseas. I myself have led numerous trade missions to counter anti-palm oil allegations and narratives,” she said.

Given time, she said, Malaysian palm oil will gain increased acceptance and may even be the dominant edible oil in non-traditional markets like Europe.

In March 2019, the European Commission approved measures to reduce palm oil-based biofuel by 2030.

This means EU member states will still be able to import and use palm oil-based biodiesel, but it will no longer be considered a renewable fuel or be eligible for the attendant subsidies. — DayakDaily