In the Renewable Energy Directive (RED) and Fuel Quality Directive (FQD), the European Union (EU) stipulates that the development of biofuels must not increase greenhouse gas emissions (nitrite, methane, carbon). Therefore, it is undesirable to have an increase of emissions due to changes in the use of agricultural land/ forest/ ranch to produce biofuel crops or because of excessive intensification of Direct Land Use Change (DLUC). In addition, emissions derived from agricultural intensification and extensive adjustment (Indirect Land Use Change, ILUC) are also not permitted.
In order to fulfill European community’s needs of vegetable oils, the European Union have been importing vegetable oil. The need of vegetable oil is approximately 25 million tons each year, however, Europe’s domestic vegetable oil production capacity is only 13 million tons which is 52 percent of what is needed, thus the remaining 48 percent must be met from imports of palm oil, soybean oil and other vegetable oils. EU is full employment; there is not much choice to increase agricultural production without having an impact on EU’s land-use change.
The EU’s anxiety in implementing policies inhibits imports of palm oil and other vegetable oils, which is actually intended to spur domestic production of rapeseed oil (RSO) and sunflower oil (SFO) in order to reduce dependence on imports. Moreover, there is public pressure for the removal of EU agricultural subsidies, so that domestic production of RSO and SFO will be threatened by imported vegetable oil.
For EU, inhibiting palm oil imports will create various problems and increase emissions. Inhibiting imports of the cheaper palm oil compared to EU’s domestic RSO and SFO, will push RSO and SFO prices to increase domestically, which will trigger an increase in EU vegetable oil production. This will increase greenhouse gas emissions (which would rather be reduced by EU) both from DLUC emissions and ILUC emissions.
The increase in emissions from DLUC is originated from: First, the increase in RSO and SFO prices will increase agricultural intensification of RSO and SFO plants. This intensification of RSO and SFO plants increases greenhouse gas emissions both from increased use of fertilizers (nitrogen oxides, methane) and from fossil energy (carbon). According to FAO, it is reported that emissions from RSO and SFO plant inputs are much higher (6 times greater) than oil palm plantations. Secondly, the increase in EU domestic RSO and SFO oil prices will also encourage the conversion of forest land (ex-agricultural land) and pastureland (ranch) in the EU to be the land of RSO and SFO. This is deforestation which also increases carbon emissions.
In addition to emissions from the DLUC, emissions from ILUC also have the potential to increase. First, the conversion of part of EU food land into biofuel crops (due to the increase in RSO and SFO prices) will encourage intensification of agriculture by using more fertilizer, pesticides and fossil energy for mechanization. EU’s agriculture which already produce great amount of emissions (nitrite, methane and carbon) has increased its emissions again due to excessive intensification. Secondly, the reduction of agricultural land for biofuel production will disrupt food security in which EU prefer to avoid. Therefore the conversion of forest land (former agricultural land) and ranch into EU’s agricultural land for food crops will increase. This is also deforestation which increases EU emissions.
In other words, EUs’ policies that hinder or reduce imports of palm oil will actually increase emissions in the EU. This is contrary to the RED and FQD that have been set. So why does the EU still insist to inhibit palm oil imports which is detrimental to their community? The EU government should be realistic about their limitation of space. The presence of palm oil in the EU should actually be seen as a solution to fuel-food trade-off and RED.
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