EU Envoy : Malaysian CPO Exports Not Affected

THE sustainability criteria in the European Union (EU) Renewable Energy Directive (RED), due to come into force on December 5, will not affect Malaysia’s palm oil exports to the region.

EU ambassador and head of delegation to Malaysia Vincent Piket said there will be no change for crude palm oil (CPO) imports.

“The EU will not block any Malaysian CPO exports. Exports into the EU can continue just as they are today, with no new tariffs, quotas, restrictions or conditions,” he said in Kuala Lumpur yesterday.

“The EU RED and its sustainability criteria do not concern Malaysia’s CPO exports to the EU market for consumer products, like food, cosmetics, detergents and so forth. In other words, 90 per cent of Malaysia’s palm oil exports to the EU are in no way affected by the new EU rules,” he said.
Certain quarters have voiced their concern about the EU new directive and its effect on palm oil exporting countries like Malaysia and Indonesia.

To clear the air, Piket said the EU RED is an essential element of the climate and energy package to meet the group’s climate change and energy policy objectives.

He said the directive contains a 10 per cent binding target for renewable energy in transport, including biofuels, by 2020. This will provide an opportunity, also for developing countries, to supply biofuels to the EU market.

“With this directive, the EU is creating a new market and we want to make sure that we do it right. It is crucial that the measures to fight climate change and implement the renewable energy policy, including biofuels, do not have negative side-effects on the environment,” he said.

Piket said it is for this reason that the directive contains sustainability criteria for biofuels.

The sustainability criteria are related to two issues – the lifecycle greenhouse gas emissions of biofuels and the land used to produce the biofuels.

“They aimed to achieve significant greenhouse gas savings compared to fossil fuels and prevent negative side-effects on biodiversity,” he said.

Piket said the sustainability criteria used by the EU RED were science-based, verifiable and in accordance with the World Trade Organisation principles.

“The criteria will be the same across the EU. They will apply to both EU production and imported biofuels,” he said.

The EU RED foresees incentives for sustainably produced biofuels, though biofuels which do not meet the criteria can still be imported and marketed in the EU, Piket said.

“They will not, however, receive tax exemptions, subsidies or other incentives from EU member states, nor will they count towards the objective of 10 per cent of renewable energy in transport,” he said.

According to Piket, it is important for Malaysia to note that there are incentives for sustainably produced biofuels.

The EU RED, he said, is exclusively about trade in biofuels. “The EU countries will be offering incentives to promote the use of sustainably produced fuels, including biodiesel,” the envoy said. – Bernama

Source : Business Times

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