European Parliament Misdirected the Problem of Deforestation

Of the approximately 10 million hectares of world deforestation as areal expansion used to produce commodities marketed to the EU, the contribution of oil palm plantation is only less than one percent. About 54 percent is soybeans and beef from South America


The European Union is, again, planning a threat to Indonesian palm oil. After March 17, 2017, at the level of the Committee on Environment, Public Health and Food Safety, a new policy recommendation was made to plan restrictions on palm oil imports and ban the use of palm oil for the European biodiesel program. One of the reasons is that the process of producing palm oil causes deforestation. The proposed policy was later decided in a plenary session of the European Parliament on April 3-6 2017 which recommended the European Union Executive Board to execute.

The arguments of countries in the European Union (EU) to impose a deforestation tax and demand sustainability certification of palm oil entering the EU are increasingly unreasonable and very discriminatory. Deforestation occurs throughout the world to meet the needs of land for development, including in Europe and North America. A study by Mathew (1983) revealed that in the period of 1600-1983, the area of ​​deforestation in sub-tropics, especially in Europe and North America reached 653 million hectares. Whereas in the period 1990-2008 the world’s total deforestation reached 239 million hectares spread across South America (33 percent), Africa (31 percent), Southeast Asia (19 percent) and other countries (17 percent). So the reason for deforestation to restrict palm oil to Europe is too excessive.

If deforestation is the main issue being concerned, the EU Commission has conducted a study of the link between consumption of commodities imported by EU and deforestation (embodied deforestation) or in economic terminology called negative consumption (consumption diseconomies). In the study report of the European Commission (2013): The Impact of EU Consumption on Deforestation, it was revealed that in the period of 1990 – 2008, for food needs of the EU community (feeding the EU) was met from the results of deforestation covering 10 million hectares in various countries.

The details of the 10 million hectares include 41 percent soybeans (4.14 million hectares) from Brazil, Argentina, Paraguay and 13 percent (1.3 million hectares) in the form of beef cattle ranches from South America. While palm oil contributed only 0.8 percent (0.8 million hectares), namely from Indonesia and Malaysia.

With the results of the European Commission study, it is very clear that the biggest deforestation that supplies Europe is soybeans and beef. If the EU defines deforestation as a negative externality and uses a negative externality tax as a way of internalizing negative externalities, it should also be applied to soybean and beef imports from South America. The two import commodities reached 54 percent of embodied EU deforestation. While palm oil from Indonesia and Malaysia contributes very little, which is only less than one percent.
With this data, the EU which will impose import tariffs and sustainability certification requirements only on palm oil is clearly not only unfair (contrary to the WTO), but also  mislead the public itself. The contribution of palm oil in embodied EU deforestation is very small at less than 1 percent. While the contribution of soybeans and beef imported by EU from South America accounts for 54 percent.

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