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The European Union’s proposal to introduce Indirect Land-Use Change (ILUC) into renewable energy policy has been criticized by scientists, politicians and business as unscientific and unworkable. It has also been suggested that ILUC would amount to a discriminatory trade barrier against better-value imports, such as palm oil from Malaysia.

A new academic report, released by the research consultancy Copenhagen Economics, provides further evidence that the EU’s proposal should not be adopted. The report is published only a few weeks after EU Member States rejected a political compromise on the new ILUC proposal. The Copenhagen Economics analysis, deals yet another blow to this defunct and unworkable proposal. It is now time for the European Commission to listen to the established scientific evidence and the views of experts, and discontinue its pursuit of a discriminatory policy that is alienating Europe and pushing it further towards isolationism. In the words of researchers at Copenhagen Economics, ‘ILUC modeling is not a reliable basis for important policy decisions’ and ‘the European Union’s attempt to regulate biofuels by imposing ILUC calculations is not supported by solid scientific evidence or careful use of the range of available methodologies’.

The use of ILUC to support uncompetitive European biofuels producers constitutes a shameful form of discrimination against non-EU biofuel feedstock, and palm oil in particular. It harms Malaysia’s interests and those of its 300,000 small oil palm farmers, who are denied the opportunity to lift themselves out of poverty and provide a better future for their families. As the most efficient oilseed, oil palm also has lowest land footprint of any competing oil, while advanced palm-based biofuels are testament to the industry commitment to further enhancing efficiency, through biomass use for energy generation.

After conducting a detailed analysis on the robustness of ILUC, experts at Copenhagen Economics conclude that ILUC modeling involves ‘arbitrary decisions about a massive number of parameters’ and because of its subjective nature and inherent uncertainty, ILUC uses a series of ‘extremely imprecise methodologies’, rendering it unsuitable for regulatory use in policy making.

Specifically, the authors find that the European Commission attributes palm-based biofuels a very low ranking in comparison to other oil crop-based biofuels: this is clear evidence of the trade protectionism that lies behind the ILUC proposal. In reality, this is a concerted effort to block palm oil out of the European market in favor of uncompetitive domestic oilseeds. The study by Copenhagen Economics once again highlights the EU’s intent to hand pick the biofuels that it regards as ‘sustainable’, while continuing to discriminate against palm based biofuels.

Researchers at Copenhagen Economics also highlight analytical problems with the European Commission’s proposal, particularly its failure to recognize national land conservation efforts and the use of historic patterns to determine future outcomes. For instance, the EU’s ILUC proposal does not recognize that land conservation efforts in Malaysia, despite these being ‘some of the most advanced in the developing world’, nor the fact that ‘the Malaysian government has pledged to maintain forest at a minimum of 50 per cent of the Malaysian land mass’. These omissions negate Malaysia’s important efforts towards responsible oil palm cultivation, and the palm oil industry’s contribution to Malaysia’s conservation commitments.

The United Nations agency responsible for monitoring global forest resources recorded Malaysia’s total forest area at over 20 million hectares in its latest Global Forest Resource Assessment. This equates to 62% of Malaysia’s total land area. Unfortunately, this is ignored in the EU’s anti-palm oil rhetoric as is Malaysia’s designation of more than 5 million hectares of forests as formally protected areas. The reality is that while Malaysia maintains vast forest resources, most European countries only possess very little, if any remaining forest: data shows that the United Kingdom, Germany and Spain have no recorded primary forests.

In the first half of 2014, the Greek Government will take control of the Presidency of the European Union. If it is to be successful with regards to biofuels policy, the Greek Presidency must start by reviewing what the science on ILUC is saying and acknowledge the fact that the credibility of the EU’s biofuels policy is being severely undermined by the pursuit of a regulatory framework that cannot be accurately modeled or calculated.

The Malaysian palm oil industry, and several research institutes, have conducted detailed research into the true potential of palm-based biofuels. This disproves the European Commission’s figures for palm oil, which are clearly biased and skewed. The EU can still build a strong renewable energy policy, and advanced, responsibly-produced palm biofuels can help with this goal. However, ILUC guesstimates based on biased and partial assessments, must first be rejected before the EU can move forward to a sensible, and open biofuels policy.

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