Belgian ad ban a significant setback for Malaysian biofuel

Palm oil industry faces uphill struggle to be recognize as sustainable
July 07, 2011
Palm oil nursurey

It might be small but the Belgian advertising watchdog Jury d'Ethique Publicitaire could make life difficult for the Malaysian Palm Oil Council (MPOC) across Europe. Following a complaint by Friends of the Earth Europe (FoE), it concluded that palm oil does have an impact on the environment and any adverts arguing it was sustainable was in breach of Belgium's advertising code.

It had already faced a similar ruling by the UK's Advertising Standards Authority.

For the MPOC the news isn't good. It has been actively lobbying European policy-makers to embrace palm-oil based biofuels and has spent some time persuading markets that its environmental practices are up to scratch. The MPOC has had a higher profile in Belgium than elsewhere in Europe simply because it is lobbying European Union bosses in Brussels to include palm oil in its sustainable biofuel certification scheme.

On top of that it is fighting a rear-guard action against an Australian bill demanding that palm oil be labelled in all Australian foods. Groups had been arguing that because palm oil both contains high levels of fat and that plantations destroy native forests in Malaysia and Indonesia, labelling was critical for the Australian consumer to make an informed decision.

While so far the MPOC has remained quiet about the obscure Belgian ruling, the Malaysian Plantation Industries and Commodities Minister Bernard Dompok had responded to the Australian moves by saying, "In this context, Malaysia is of the view that labelling palm oil purely from the perspective of sustainable production is discriminatory." He warned it wasn't the sort of things neighbours should do.

But the need for certification in one of the world's biggest markets for biofuels is a much more critical deal than the relatively small Australian consumer sector. The industry employs more than 570,000 people directly and a further 290,000 in downstream industries and has become an important part of Malaysia's economy.

Last year the EU released guidelines for sustainable biofuels with three main guiding principles:

  • Sustainable Biofuel Certificate: The Commission encourages industry, governments and NGOs to set up voluntary certification schemes for biofuels. The Commission will assess whether these schemes are reliable and have fraud-resistant auditing. The certificates guarantee that all the biofuels sold under the label are sustainable and produced under the criteria set by the Renewable Energy Directive. All schemes have to have independent auditors which inspect the whole production chain, from the farmer to the trader and the fuel supplier.

  • Protecting nature: The Commission explains very clearly which types of land can NOT be used to produce biofuels. These are: natural forests, protected areas, wetlands, peatlands. It explicitly rules out that forests can be converted into palm oil plantations.

  • Promote only biofuels with high greenhouse gas savings: The Commission explains how to prove that the biofuels used have high greenhouse gas savings. It explains that all those which do not achieve greenhouse gas savings of 35 percent compared to petrol and diesel, will not be accepted. This threshold will rise to 50 percent in 2017. In the calculation, not only carbon dioxide is included, but also methane (CH4) and di-nitrous oxide (N2O), both stronger greenhouse gases than CO2.

So far Malaysia has been unsuccessful in getting palm oil onto the certification list, having an up-hill struggle against pressure groups like FoE and Greenpeace and has been desperate to be recognised independently of Indonesia, which has been their prime target on sustainability issues. Issues of independent auditing, CO2 emission calculations and most importantly, and specifically mentioned in the EU's guidelines, "explicitly rules out that forests can be converted into palm oil plantations".