Malaysia, Indonesia Refute EPA Report On Palm Oil-based Biofuels

Salmy Hashim Bernama 23 Mar 12;

WASHINGTON, March 23 (Bernama) -- Malaysia and Indonesia, the world's largest producers of palm oil, are on a joint mission to correct and update a United States Environmental Protection Agency (EPA) report that could impact future exports of palm oil-based biofuels.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok, who is leading the effort, described the current EPA report as "erroneous" and felt the need to "come personally to the US" for discussions with senior US officials, saying the EPA data did not reflect the current standards practised in the producing countries.

The EPA published in December last year its findings that two types of palm- based biofuels - biodiesel and renewable diesel - have failed to meet the minimum 20 per cent greenhouse gas emissions savings threshold requirement needed to qualify as renewable fuels under the Renewable Fuel Standard 2 (RFS 2).

"What happens here is heard by the rest of the world - and will reverberate around the world - painting a bad picture of palm oil," Dompok told Bernama and RTM here on Friday.

The EPA has invited all parties, including Malaysia and Indonesia, to submit comments on the report, and has extended its deadline to April 27.

Dompok, who met senior officials at the EPA, was hopeful that the problem would be resolved backed by the latest data on sustainable production of palm oil in the two countries.

Indonesia was represented by the Director General of Processing and Marketing under the Ministry of Agriculture, Zaenal Bachruddin.

Dompok also met senior officials at the Department of Agriculture and Deputy US Trade Representative Demetrios Marantis to discuss the joint issue, including efforts to protect the environment as the two countries develop its palm oil industries and provide a source of income for smallholders as well as alleviate poverty in rural areas.

US-Malaysia bilateral trade in 2011 was at US$36.9 billion (RM113.496 billion), while US-Indonesia trade was US$27 billion (RM83.045 billion).

Malaysia is the world's largest exporter of palm oil, and its number one consumer is China, followed by the European Union, Pakistan, India, and the United States.

Last year, Malaysia exported 18 million tonnes of palm oil and products globally worth RM80.3 billion, with about 1 million tonnes going to the US at RM5.93 billion, an increase from RM4.2 billion the previous year.

"I see an increasing trend - the US is an important market for us," said Dompok.

On biofuel from palm oil, Dompok projects that the B5 (5 per cent bio diesel and 95 per cent petroleum diesel) which will use 500,000 tonnes of Malaysian palm oil, will be available for Malaysians by the end of the year.

Going forward, he foresees the development of B10, which would double the consumption of Malaysian palm oil and help the local biodiesel industry.