Having already been stung by plunging international prices and decreased demand, Indonesia’s crude palm oil producers are bracing for a possible ban on their products by the European Union, which is expected to issue two environmentally-friendly regulations in a bid to encourage sustainable palm oil production, an industry official said.
Derom Bangun, vice chairman of the Indonesian Palm Oil Association, said on Wednesday that the EU would soon issue carbon footprint and conservation requirements for companies exporting crude palm oil to EU member nations.
He warned that Indonesian palm oil producers would have to scramble to meet the European bloc’s new standards.
Under the carbon footprint requirement, he said, companies would have to pay for the amount of greenhouse gases released when converting forests for palm oil cultivation. He did not say to whom the fee would be paid.
“If the company uses peatland, they would have to pay more because converting peatland will release more carbon into the air,” Derom said.
Under the conservation requirement, palm oil companies would have to obtain a certificate affirming they are not developing plantations in protected areas.
Companies established between 2005 and 2007 that are already farming plantations in conservation areas would have to pay a fee to receive the certificate, he said.
“If a company does not have the certificates, the European Union will ban their [crude palm oil] products so they cannot export to Europe,” Derom said.
“With the additional requirements, companies will have to work very hard to meet all of them.”
Currently, companies exporting palm oil to the EU for use as biofuel or cooking oil must be certified by the Roundtable on Sustainable Palm Oil and hold an EU directive certificate. Both, however, require less stringent environmental commitments than the bloc’s proposed rules.
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