Administrative & European Public Law

Palm oil: a health, a trade and an environmental issue

Il Fatto Alimentare, an Italian online food magazine has organised a campaign to stop the use of palm oil in Italian processed foods and in particular biscuits and the like. The reasons are i) palm oil production is destroying tropical forests and is not being produced sustainably and ii) palm oil is bad for your health as it contains percentages of saturated fats higher than other fats and in particular olive oil.

On the basis of this campaign, and others, a number of supermarkets are beginning to withdraw products containing palm oil. Food processors are being required to change their formula.

In this note we look as some aspects of the palm oil debate and ask what should Italy do.

France first

In France the “anti-palm oil” movement is more developed. In 2012, the French Senator, Yves Daudigny, proposed a law project would have seen tax on palm oil go from 100 euros to 300 euros per tonne. The main reasons for the proposal was ecological concerns (in relation to the intensive deforestation in Malaysia) and the unhealthy effects on humans.[1]

If introduced it is clear that the tax would have had an effect on food prices and in particular sweets and biscuits. One journalist called this measure the “Nutella tax”. Ferrero, Nutella’s producer, is one of the largest user of palm oil: the oil makes up 20% of Nutella. Therefore, this tax was considered as directly applicable for this company. However it would also have affected many other biscuit and pastry manufacturers.

The proposal was not adopted, but, as from 2013, a small number of French producers and distributors have been promoting the campaign “no palm oil” putting stickers to that effect on their products.[2] The group is now trying to spread the campaign to other EU countries.

Overseas Production

Malaysia is one of the largest producers of palm oil in the world.[3]  In 2013, the Government asked the French Prime Minister – Mr. Ayrault – to put stop to anti-palm oil campaigns in France, as it was a cause of big concern for small farmers as well as the industry.

Malaysia supports palm oil for two main reasons: a) it is a ‘community’ project in that palm oil plantations has been developed in consultation with industry, growers government and community; b) palm oil is an efficient way to produce fossil fuel alternative and capturing carbon from the atmosphere.

Malaysian Palm Oil Council on the other hand complains that the “European ideological threats” could be simple protectionism in favour of local EU oils. The Palm Oil Council considers that the EU’s Renewable Energy Directive, “RED”, imposes more onerous environmental standards for imports of biofuels (including the oil palm producers) compared to biofuels produced in the EU (such as rapeseed oil). Malaysian commodities minister, Uggah Embas, has called the “No Palm Oil” campaign discriminatory.

The Malaysian National Association of Small Holders (NASH)[4] has complained of a campaign of “misinformation” by French companies and politicians against Malaysian palm oil.

What’s the relevance of the EU?

From the EU point of view, the palm oil issues are related to the EU Health and Nutrition Agenda.

The new EU rules on food labelling (the European Food Information Regulation No 1169/2011)[5] apply from 13th December 2014. This new regulation requires that the specific source of vegetable oil must be declared on pack: this is a good possibility to increase the transparency and understanding of what is included in a product. Some palm oil producers[6] argued that the new European label policy is a chance to spread the certified palm oil to respond to the consumers’ desire of sustainability and traceability. From this point of view, the palm oil certification could be considered a good way to achieve high standards of production, in terms of health and environment respect. Commodities minister Uggah Embas argues that the labelling might be a disguised means of discrimination against palm oil.

The European Palm Oil Alliance, a lobby association, emphasises  the health and nutritional aspects of palm oil. This is important to provide science based information and to rebalance the discussion around health and nutritional facts in Europe. EU food law is based on science and thus decisions, it argues, should be science based.

There are two other European regulations that have an impact on palm oil. Namely: a) Fuel Quality Directive[7] (FQD); b) Renewable energy directive[8] (RED).

In terms of regulation evolutions, at EU level there are two new policies which could have an impact on palm oil sector:

  1. a) the “indirect land use change” (called ILUC). It would cap use of first generation biofuels (from agriculture raw materials), and it would add ILUC factors in the reporting by fuel suppliers and Member States of greenhouse gas savings of biofuel and bio liquids;
  2. b) EU is starting to study impact of EU consumption on deforestation.

Finally, the “EU action plan on childhood obesity”. This will promote specific eating habits and could enter into details as to what is healthy and not healthy in the diet. The issue of palm oil will of necessity come up.

What should Italy do about this?

Italy has multiple interests in relation to the palm oil debate. There is the clear commercial interest in allowing important Italian companies to source and use oils at the best price and most suitable to their products.

Italian consumers are concerned about personal health issues. Is palm oil good or bad for you or no worse or no better than other oils?

Italian producers of oils and in particular olive oil are interested in denigrating imported oils in favour of domestic oils.

Environmental groups are concerned about deforestation in Malaysia which in turn plays into the overall concern about climate change and the responsibilities of EU governments to take appropriate steps to counter the change.

Palm Oil raises important issues of law and policy. This law and policy will be determined in Rome and in Brussels. Understanding how this debate will develop is part of what Across the EUniverse is about.

[1] In particular, for this current of thoughts palm oil plantation is considered detrimental for several aspects: CO2 emissions, the deportation of people (“land grabbing”), the destruction of natural environment (one-crop land). In 2007 a report by the United Nations Environment Programme (UNEP) said most of the country’s forest might be destroyed by 2022. UNEP noted that the spread of palm-oil plantations is one of the greatest threats to forests in Malaysia.

[2] There is a similar campain in Italy: “Il fatto alimentare” supported companies to substitute palm oil with different compounds such as vegetable oil or butter.

[3] Indonesia is the world’s largest producer of palm oil.

[4] It represented the interests of the more than 300,000 small palm oil farmers.

[5]  Regulation (EU) No 1169/2011 of 25 October 2011 on the provision of food information to consumers, OJ L 304, 22.11.2011, p.18.

[6] The Danish brothers Martin and Cal Bek Nielsen of the United Plantations.

[7] This regulation provides a 6% greenhouse gas (GHG) reduction target in carbon intensity of road transport fuels in 2020.

[8] The main points of this regulation provided that there is 20% of renevable energy by 2020 and 10% renewable energy in trasport by 2020.

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