SINGAPORE (Jan 22): Palm oil is no stranger to controversy and negative market views — including from non-governmental organisations — in the EU and the US. Despite efforts by palm oil exporters to deliver products with high greenhouse gas emission savings (as certified by the International Sustainability and Carbon Certification  [ISCC] association), the EU Parliament’s plenary vote on Jan 17 on renewable energy calls for no palm oil in biofuel from 2021, affirming earlier committee-level results.

It also voted to limit the contribution of biofuels to transport to 7%, which is expected to further limit the market for crop-based -biofuels, regardless of their sustainability certification. Facing a possible shutout from a key EU market segment, there are worries of a domino effect.

The EU’s legislative warning shot came in April last year, along with a call for a single certification for EU-bound palm oil. This has caused a scramble among certification schemes by the Roundtable for Sustainable Palm Oil (RSPO), Malaysia and Indonesia. It was Malaysian interests that led the move towards RSPO certification in order to boost the position of Malaysian palm oil in the EU. However, Indonesia took over the reins, supplying two thirds of the EU’s imports.

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