Palm oil takes another hit

Norway becomes first country to ban high deforestation risk biofuels

The Norwegian parliament has voted to make Norway the first country in the world to exclude biofuels based on high deforestation risk feedstocks such as palm oil, from 2020.

“This is a victory in the fight for the rainforest and the climate”, says Rainforest Foundation Norway.

Rainforest Foundation Norway (RFN) celebrated an important victory in the fight for therainforest and the climate. As negotiators and leaders of the world meet in Katowice, Poland for COP24, the Norwegian parliament voted to make Norway the first country in the world to ban high deforestation risk biofuels like palm oil.

This is the result of a long and hard struggle on RFN’s part to limit Norwegian consumption of palm oil and follows an all-time high consumption of palm oil based fuels in Norway last year. In 2017, 317 million litres of biodiesel – around 10 per cent of the total diesel consumption in Norway – were based on palm oil. That is now to be slashed.

Such measures hold significant transfer value and potential spillover effect vis-á-vis other markets that are considering implementing similar standards, such as the EU. The potential influence towards other demand-side countries is underlined by the fact that the final text of the recast EU Renewable Energy Directive allows for individual EU Member States to set a lower limit for the contribution biofuel produced from food or feed crops towards renewable energy targets than that are set in the EU Directive.
  • The decision represents an expansion, widening and strenthening compared to already adopted policies. In 2017 the Norwegian parliament voted in favour of a restriction on use of palm oil fuels in public procurement. This got substantial international coverage.
  • Report by Cerulogy and RFN (Jan. 2018) shows should the current and proposed targets for future consumption of biofuels be implemented without strong measures against using palm oil feedstock, biofuel driven demand for palm oil could potentially see a sixfold increase by 2030 – a total of up to 67 million tonnes. This would exceed today’s total global production of palm oil.
Norway has a set of policies to reduce greenhouse gas emissions from transport, including policy incentives to increase the use of biofuel – such as a volume blending mandate for road transport rising to 20 percent in 2020 and a road tax exemption for biofuel supplied above the volume blending mandate threshold. An unintended consequence of these policies has been that almost half of all biofuels consumed in Norway in 2017 were based on palm oil. The Norwegian government acknowledges that the demand for palm oil for fuel results in deforestation, due to indirect land use change effects.
The EU earlier this year agreed to phase out the use biofuels with high indirect land use change risk by 2030, and Norway’s decision goes far beyond this, as the Norwegian parliament requests that the measures be effected from January 1, 2020.
 “The Norwegian parliament’s decision sets an important example to other countries and underlines the need for a serious reform of the world’s palm oil industry,” says Nils Hermann Ranum of Rainforest Foundation Norway.
Europe has seen an aggressive growth in demand for palm oil, stimulated by policies to increase the consumption of renewable energy in transportation.
The increase in demand in Europe has in turn driven the expansion of oil palm plantations in Indonesia and Malaysia, at the expense of carbon and biodiversity-rich rainforests and peatlands.




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