Monday, March 20

Masing downplays concern over EU’s move on palm oil


Tan Sri Datuk Amar Dr James Jemut Masing

KUCHING: The European Union’s (EU) decision to end palm oil use in transport fuel by 2030 would not harm Sarawak and Malaysia too much as a whole, Deputy Chief Minister Tan Sri Datuk Amar Dr James Jemut Masing said.

He pointed out that EU only command a small percentage of Sarawak’s export market as the biggest buyers were the Chinese.

“If there is a ban, we will have to find other markets.

“But Malaysia shouldn’t be too worried,” he said in responding to concerns on what will happen to the over 1.5 million hectares of oil palm plantations in Sarawak as the ban would be gradually introduced and implemented.

Masing said this when met at the Chief Minister Datuk Patinggi Abang Johari Tun Openg’s Hari Raya open house at Borneo Convention Centre Kuching (BCCK) here on Friday.

According to Reuters, EU lawmakers have on Thursday agreed to phase out the use of palm oil in transport fuels from 2030, setting up a clash with producing countries such as Malaysia and Indonesia.

Green lawmaker Bas Eickhout, one of the negotiators in tough talks that ran until the early morning, said the use of palm oil would be capped at 2019 levels until 2023 and reduced to zero by 2030.

However, Masing observed that the move to ban palm oil as biofuels was more of a trade barrier and nothing to do with the environment.

“If you don’t use palm oil as biofuels, you have to opt for something else and unless you use fossil fuel – but then again it is not too healthy as well and could be even worse (than crop-based biofuels),” he said.

Sarawak is currently looking at a master plan in which it is targeting two million hectares of the state’s land mass to be planted with oil palms.

Meanwhile, Malaysia is the world’s second largest palm oil producer after Indonesia, and the two countries together account for nearly 90 per cent of global output.

Malaysia, Indonesia and Thailand, which produce the majority of the palm oil imported into Europe, had warned ahead of Thursday’s agreement they would retaliate against what they called protectionist measures, if a ban was introduced.

According to Reuters, a 2015 study funded by the European Commission found that palm oil and soybean oil had the highest indirect greenhouse gas emissions because of the deforestation and the drainage of peatlands associated with their cultivation.

Palm oil has been used increasingly as a feedstock for biofuels because it is cheaper than locally produced rapeseed oil.

Half of the EU’s 6 billion euros (US$7 billion) worth of palm oil imports are used for biodiesel, according to data from Copenhagen Economics.

Thursday’s agreement is part of a broader legislative package aimed at reducing greenhouse gas emissions in the EU by at least 40 per cent below 1990 levels by 2030.

This is part of the bloc’s commitment to the Paris Agreement, which aims to keep global warming well below 2 degrees compared to pre-industrial levels.