What’s happening almost one year on from the EU proposed ban on Palm in Biodiesel.

Last night I was reading an article in an English language Malaysian newspaper about a letter that one of their parliamentarians was about to send to the EU protesting at their proposed Palm Oil ban and stating very clearly that ‘there would be consequences’.  As with most online news reading these days, the article took me around 5 minutes to digest and then I sat back with my cup of tea and read through the comments…

What is clear is that the other people who are reading this paper are aware of the intricate detail that underpins this lucrative industry and what’s more they mainly have little faith in the efficacy of the approach that their government is reporting to be considering.

So what’s going on?

The EU decided that the best way to make their diesel ‘green’ was to make it out of trees (because trees are green duh).  Ok, that’s not exactly it but it is close to the truth.  Now in the global ‘green’ oil market palm reins supreme so palm it was.  Get rid of that nasty petrochemical oil that is unsustainable and replace it with palm oil which is made from palms which are trees which is lovely and can presumably grow on forever.

Only now we know that we missed the point completely on account of the fact that our tree diesel obsession has not stopped global warming (another duh moment but what can you do?)

So now the EU is going ‘aha,  people don’t like palm because the plantations take the rain forests and the rain forests are home to Orang Utans and people are getting very upset about that so let’s ban palm and seem like we give a shit’.  They are proposing to replace palm with Soy, Canola and Rapeseed, crops that clearly have a magical way of growing en mass, on small pockets of already degraded land in high-prices Europe where we no longer have nature, wilderness or animals because of. Wait, what?   SSHHHHHH!!!!

In following up I read another article this morning which you can find here on the ecobusiness website.   

The take-home message for me was this:

 

Europe uses around 1/3 of the palm oil it imports in biodiesel, the rest going to food and chemical industries.

That accounts for 4% of the global production of palm which is a fair chunk really but possibly not enough to save the forests, especially when you consider the rest of what the article says.

The suppliers to the EU are currently the certified sustainable suppliers and get a premium for their oil.  Whether their certification is worth anything or not is debatable but clearly there is some acknowledgement that the customers are asking for sustainably sourced palm and the industry is attempting to give them it.  Now a 4% drop in demand is most likely to result in a drop in price (due to the usual dynamics of business) which could then open up the palm market to other, lower barrier-to-entry markets. The certified suppliers are the biggest losers here while the bottom end of the market will no doubt cash in.  So it is likely that rather than reduce the demand it will just cheapen and diversify it.

Let’s ponder that for a moment…

So I’m left sitting here feeling a strange synchronicity between this and the UK BREXIT debacle (because whichever way you would have voted it has now turned into a complete brawl).   Sure, leaving it all behind looks to be a good idea and there might well be some merit to it but, as always, the devil is in the detail and maybe there is a smarter way to play this, a way that doesn’t result in a net negative for humanity.

I only hope it gets sorted.

Amanda