Palm oil is becoming a target of the European Union's overzealous regulatory wrath. Several recent decisions, including the passing into law of the new Due Diligence Proposal, indicate that the EU is ultimately determined to exclude the benign vegetable oil from sale in Europe. In another significant development, by the year 2030, imports of palm oil for biofuel purposes will be banned under the Renewable Energy Directive II.
Palm oil is utilized in the production of many different types of food and personal care items in addition to being used as a fuel source. It has been used in a plethora of products for a long time without anybody noticing, thanks to its ability to mimic the properties of animal fats while maintaining its low price.
The European Union's (EU) opposition to palm oil is driven by ecological concerns. Europe's bureaucrats and regulators are feeling the heat after the COP26 climate summit pledged last year to cease and reverse deforestation by the end of the decade. Deadlines have already been missed. They want to place the blame on palm oil.
Many people, particularly those on the political left, hold palm oil responsible for forest destruction because of its handy placement in this narrative. While echo chambers of interventionists agree with each other that the palm oil industry has to experience the full might of the state, vague hand-waving pronouncements are made concerning the loss of rainforests elsewhere.
However, contrary to what they and Brussels would have you think, eliminating the palm oil sector tomorrow would not get us any closer to halting deforestation. Since there are significant commercial incentives to become green, 90% of the palm oil imported into Europe is now certified as sustainable, and this percentage is only expected to rise.
Chain Reaction Research, a risk analysis organization, observed major palm oil producers including Indonesia, Malaysia, and Papua New Guinea, and concluded that deforestation from palm oil has dropped to its lowest level since 2017.
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Global Canopy, a nonprofit research organization, found that the palm oil industry does very well in achieving sustainability pledges throughout its supply chain when compared to other commodities including paper, soy, cattle, and leather. 72% of palm oil companies have made such pledges, a substantially larger percentage than in other potentially hazardous fields.
The European Union's (EU) uncompromising approach to regulating palm oil makes little sense even if the desire to improve the sustainability of palm oil production suddenly disappeared, which appears very improbable given current trends. As palm oil becomes more widely used, it will replace other vegetable oils that are generally considered to be more detrimental to the environment.
Sunflower oil, rapeseed oil (sometimes known as canola oil), and olive oil are alternatives to palm oil. But studies have shown that if we stopped using palm oil, it would lead to further deforestation. Additional deforestation would be necessary since the production of these other oils is significantly less land-efficient, requiring four to ten times as much land to generate the same quantity of oil.
Currently, palm oil supplies 40% of the world's vegetable oil consumption while only using 6% of the area utilized for vegetable oil cultivation. Therefore, it would be counterproductive and short-sighted to restrict palm oil imports.
Forcing the most widely used and land-efficient vegetable oil off the market at a period of inflation and a worldwide cost of living crisis will simply hasten the already fast rises in food costs. The European Union's apparent determination to artificially inflate food prices by intervening in the vegetable oil market is very imprudent at a time when energy costs are rising and millions of people around the globe are struggling to make ends meet.
Deforestation in Europe may serve as a warning to America. The European Union's (EU's) key policy of attacking palm oil would lead to significantly increased rates of deforestation, higher food costs, and a decrease in investment in the European Union. America, instead of following the EU's misguided example, could take advantage of the opening created by Europe's mistake and fill the impending void in the palm oil market by maintaining positive ties with growers and stockpiling.
Jason Reed is a writer and broadcaster on politics and policy for a wide range of outlets. Follow him on Twitter @JasonReed624
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