For years, the anti-palm oil lobby in Western nations have pushed for soybean, sunflower, and rapeseed oil—all of which are Western exports— as alternatives. In France a Nutella 300 percent tax was imposed because it contains palm oil. Both France and Belgium also implemented a sansa huile de palme (no palm oil) logo on food cartons. In Iceland, supermarkets have banned palm oil in their locally made products by the end of 2018. While these actions taken appear to be driven by conservation reasons, it is also possibly caused by protectionist economic motivations in favour of EU produce, such as rapeseed oil.

Many have also questioned EU’s lack of transparency in its handling and funding in the EU Life+ Programme, which is the union’s financial instrument for environmental projects since 1992. Two of the larger beneficiaries are the World Wide Fund for Nature (WWF), and the Friends of the Earth Europe (FoEE) who have received USD147 million over the last fifteen years. These two groups are known to lobby against the use of palm oil for environmental reasons, highlighting, sometimes overly, the plight of orangutan populations. It is possible that green lobby groups such as the two mentioned do so to sustain funding for their operations. The EU Life+ Programme has been used to fund other EU directives before, such as the EU Energy Efficiency Directive. It would not be a far stretch for them to also fund the EU RED.

What then for Malaysia and Indonesia?

The truth is, palm oil extraction in Malaysia and Indonesia does indeed pose environmental problems. Yet, planning for action taken against palm oil, such as the EU ban to phase out the use of palm oil in transport fuels by 2030 , would only serve to harm countries such as Malaysia and Indonesia—countries that are heavily reliant economically on palm oil exports, especially so for the small farmers of rural communities who have been alleviated from poverty thanks to the palm oil cultivation industry.

However, it is important also to not just turn blindly to alternatives like rapeseed, soya and sunflower oils as a knee jerk reaction, without looking deeply into the issue. These alternative crops are just not as efficient or versatile as palm oil and they would hence require much more land as a result, to cultivate the same yields as palm oil, which would then also come at the cost of deforestation and greater biodiversity loss.

The complex economic relationships between Malaysia and the EU countries prove tricky to navigate as well. Britain has not made its stand clear on whether they support the RED bans, but they do fear jeopardising their bilateral relations with Malaysia and their deal to be able to sell arms to Malaysia. In the face of protests against possible protectionism by the small scale palm oil plantation farmers, the proposed Palm Oil ban from 2021 was completely removed from the final RED text that was agreed in Strasbourg on 13th June. However, a final vote is still required in the EU Parliament and Council to confirm the RED Directive

Indonesia and Malaysia are also currently planning on working together to push back against the EU trade barriers lest other palm oil importing countries choose to follow suit. There are plans to conclude talks between both countries over the course of August and September 2018, on how to do so.

Also, Indonesia has claimed to have developed a way of making palm oil biofuel for airplanes greener and ready for use in 3 years time. It would purportedly be made entirely of palm oil and will meet the Euro IV required reduced emission standards for green biofuel, in a bid to increase the need for palm oil use in the EU countries.

Given the EU impending bans and the push back from Malaysia and Indonesia, it is important to wait and see if global shifts in palm oil imports and exports would ensue.

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