Envoy: Biofuel exports to EU will grow ~ Renewable Energy Alternative Fuels

EU Ambassador Vincent Piket

14/06/2010 (Business Times, Malaysia) - MALAYSIAN biofuel exports to the European Union (EU) will grow in the coming years, due to the renewable fuel policy which gives incentives to operators that produce sustainably, said the EU ambassador Vincent Piket.

"Naturally, such a trend needs to go hand in hand with safeguards for natural resources and biodiversity, including virgin tropical forest. That's why the EU has adopted these guidelines," he said.

His remarks follow the European Commission's (EC) adoption of guidelines on Thursday to implement the EU's Renewable Energy Directive (RED), which requires EU member states to achieve a 20 per cent reduction in energy use.

To reach these targets, biofuels must deliver substantial reductions in greenhouse gas emission and should not come from forests, wetlands, peatlands and nature protected areas.

The guidelines lay down the requirements for certification schemes that want to be recognised by the EC. Other issues covered include information on default values, practical implementation of the EU biofuels and bioliquids sustainability scheme and guidelines for the calculation of land carbon stocks.

In a recent meeting with several European MPs, Malaysian stakeholders in the palm oil industry urged the EC not to discriminate against palm oil.

According to the RED which will come into force in December this year, biofuels must have greenhouse gas savings of at least 35 per cent and according to EU's calculation, the use of palm oil-based biodiesel failed the requirement as it achieved only 19 per cent. This meant that the palm oil-based biodiesel will not qualify for the incentives.

The guidelines will also help individual initiatives in Malaysia, including the Roundtable on Sustainable Palm Oil, to ensure eligibility for the EU sustainability scheme.

Piket said the guidelines will increase opportunities for third world countries like Malaysia to export into the EU, by giving incentives to operators that produce sustainably.

"This will encourage good practices, such as methane capture in oil palm mills, and discourage bad ones," he said.

Piket said Malaysian biofuels can meet the criteria if produced under the right conditions.

Biodiesel from palm oil is treated in the same way as other biofuels and there is no distinction between domestically, EU-produced biofuels and imported ones.

"The adopted package gives clear guidance to the Malaysian palm oil producers what they need to do to meet the EU's sustainability criteria for biofuels, including palm-based biodiesel. This will help investment decisions and marketing," he said.

The guidelines also create a level playing field for biofuels produced in the EU and those imported from outside, providing equal access to the EU market.

"The Malaysian exports of biodiesel to the EU are still relatively small, but they are likely to grow during this decade as a result of the EU's renewable energy policy," Piket said.

He added that the sustainability criteria do not apply to exports of Malaysian palm oil for consumer products such as food or cosmetics, which currently represent about 95 per cent of Malaysia's palm oil experts to the EU.