France takes ‘contradictory’ positions on biofuels based on palm oil

The EU’s potential exclusion of palm oil from the bloc’s recast of its renewable energy directive may not secure the backing of member states seeking lucrative export contracts with Malaysia and Indonesia – the world’s biggest producers of the biofuel commodity.

In comments that will have unnerved proponents of complete ban on palm oil from the EU’s renewable energy scheme that runs from 2021-2030, France’s armed forces minister Florence Parly was reported this week to have spoken out against a potential exclusion of palm oil following a meeting with Malaysia's defence minister.

“We had a fruitful exchange on many issues. He also raised the issue of palm oil,” Parly was reported as saying in Malaysian media during the minister’s visit to Kuala Lumpur, during which the minister is likely to have pushed sales of French fighter aircraft.

According to these reports, Parly added: “I told him we understood the importance of this sector, in particular for rural development,” she said after attending the 4th Malaysia-France Defence Joint High Strategic Committee Meeting.

Parly was reported as saying that France was in favour of no ban and no discrimination against palm oil at the national and EU levels.

The comments appear to run contrary to the French environment ministry’s position on palm oil, which is to exclude it from RED II.

Although the EU’s biofuels policy will be arrived at by 28 member states, a reluctance by France would likely complicate efforts to exclude a feedstock widely blamed for contributing to climate change.  

Malaysia has yet to decide whether to pursue with provisional plans to buy French warplanes as part of a major modernisation of its military.

Malaysia and neighbouring Indonesia have made repeated threats to boycott exports by EU nations if they back the European Parliament’s decision to freeze out palm oil in biofuels after 2021 and have orchestrated high profile media campaigns in response to the European Parliament’s vote in January in favour of a ban.  

Local media are regularly sounding out where diplomats and visiting ministers from EU member states stand on the issue.   

Malaysian news sites also reported that Sweden’s ambassador has also criticised an outright ban on palm oil through RED II, but many EU governments have yet to  publicly outline their positions on the crop’s use in biofuels ahead of Trilogue meetings between the European Parliament, Commission and Member States.  

A final decision isn’t expected until the end of the year, and other EU member states are likely to be lobbied by companies that are eyeing major export deals with Malaysia and Indonesia, and by refiners who use palm oil as a feedstock.     

French oil company Total, one of the biggest users of palm oil feedstocks in Europe for use in hydrogenated vegetable oil (HVO), is understood to have lobbied strongly for palm oil to be retained for use in RED II, while the crop is also a major input for refiners including Italy’s Eni.

“It is interesting to note that during the EU Council meeting in December, France declined to give support to excluding palm oil from biofuels in the EU despite the environment ministry's preference for a ban,” Neil Makoroff of Climate Action Network France told Energy Census.  

HVO lobbyists
“Total’s reliance on palm oil in La Mède refinery being built in southern France was a probably a major reason for that,” he said. “There appears to be major contradictions on the policy within the French government, and that could complicate negotiations within the EU Council. We hope that pressure from civil society will prevail and the government decides to support exclusion of palm oil.”

Although the EU vote made clear reference to a proposed “ban”, final legislation is unlikely to single out palm oil by name, so as to avoid trade disputes in the World Trade Organisation.

Instead the Trilogue process is likely to draw up a metric or greenhouse reduction threshold that would effectively exclude palm oil because the crop’s poor score when it come to avoiding deforestation and indirect land use change.

But ILUC measurements are highly controversial with European biofuels producers, and MEPs rejected the use of ILUC scoring in a vote last year.

Using an exclusion metric could also restrict imports of soy feedstocks or biofuels derived from soy, a move that may prompt more trade disputes with Argentina and provoke a hostile reaction from Brazil.

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"Trilogue discussions have yet to get underway and there is no indication on what will happen to the Parliament's targeted measure on palm oil. We are unlikely to know for many months what the final decision will be," said Laura Buffet of NGO Transport & Environment. 

As a result, the European biofuels industry will be uncertain for most of this year about to what extent palm oil will need to be replaced by other feedstocks, particularly as the European Parliament and Commission have been pushing for lower caps on the use of crop-based biofuels.

In Spain for instance, palm oil accounts for 65% of the feedstocks used in its consumption of biodiesel, meaning that an exclusion of the crop from RED II will require the country’s refineries to source advanced biofuels, which are more expensive and more difficult to procure than palm oil.