CPOPC Rejects ILUC due to Discrimination

KUALA LUMPUR, SAWIT INDONESIA – The Council of Palm Oil Producing Countries (CPOPC) will take several strategic steps to increase bargaining power of palm oil at global market. The joint steps were agreed during the 5th Ministerial Meeting of the Council of Palm Oil Producing Countries (CPOPC) in Putrajaya, Malaysia on Thursday, Nov.8, 2018.

As part of its declaration in the 5th ministerial meeting, the CPOPC member countries have stated that they will not participate in the workshops related to the  Indirect Land Use Change (ILUC), which is part of the  European Union’s Renewable Energy Directive II (RED II), as it will strongly discriminate the palm oil products in European market.

“Indonesia and Malaysia will not participate in the ILUC workshop (on biofuel) in Brussels next week,” said Malaysia’s Primary Industries Minister, Teresa Kok in a joint press conference with Indonesia’s Coordinating Minister for Economic Affairs Darmin Nasution.

Minister Teresa said that CPOPC is worried that the European Union will use the criteria of land use under the ILUC to discriminate the palm oil in the European market.

“As palm oil producing countries, we will address various challenges emerging from the European Union’s Renewable Energy Directive II (RED II). Of significant concern is the proposed controversial Indirect Land Use Change (ILUC) concept that would likely discriminate against palm oil in the EU market,”she said.

Another strategic step is for the CPOPC to adopt the principles of Sustainable Development Goals (SDGS) as a driver toward better sustainable commitment in the palm oil industry in order to balance the economic and social benefits with environment.

Darmin Nasution said that the palm oil is facing challenges due to the drop of price at global market, and the issue of sustainability that causes the palm oil difficult to get access into countries of main export destinations.

“I believe this moment is important for the CPOPC to play its role as a forum of palm oil producing countries to coordinate steps to surmount the challenges,” he said.

During the meeting, CPOPC agreed to formally assign Malaysia as the Chairman since Jan.1, 2019, taking over the position from Indonesia.

Besides, the CPOPC has also decided several other strategic steps to keep the bargaining position of palm oil amid the global market challenges. The steps include empowerment programs for smallholders, adoption of Colombia as new member of CPOPC, strengthen the biodiesel mandatory programs in respective member countries and encourage the use of palm biodiesel to other countries, and the strategy to deal with the black campaigns against the palm oil at global market.

The CPOPC said that smallholders play an important role in the palm oil industry as they account for a substantial portion of global palm oil production. Both ministers emphasized the need to increase productivity and income of the smallholders through further enhancement of Good Agricultural Practices and accelerated replanting programs; That way poverty will be alleviated and smallholders’ wellbeing will be increased.

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