EU’s stand on palm-biofuel to hit Asian plants

The European Union’s talk of toughening environment criteria for biofuels, including a clampdown on palm biodiesel, is another blow for Southeast Asia’s struggling biodiesel business.

The biofuel industry in Malaysia and Indonesia, the world’s top palm oil producers, has seen margins plunge on record palm oil prices. Any move by Europe to halt palm biodiesel imports could paralyze the industry, producers and industry officials said on Tuesday.
“It is not fair, it is not correct. What they need to see is whether palm biodiesel is sustainable or not,” said Unni Krishnan Unnithan, vice president of the Malaysian Biodiesel Association.

EU Environment Commissioner Stavros Dimas in a BBC interview on Monday said the EU had initially underestimated the danger to rainforests and the risk of forcing up food prices from its policy of setting binding targets for the use of biofuels.

Malaysia’s palm oil sales to Europe from January to November last year fell 20.2 percent to 1.9 million tonnes, mainly because of a campaign against palm oil by green groups.

Reuters