On 13 March, the European Commission (EC) adopted a draft delegated act specifying the sustainability criteria for biofuels and classifying palm oil as unsustainable.

Both Malaysia and Indonesia – which account for around 85% of world palm oil production – have called the act discriminatory.

According to Euractiv, the delegated act will be assessed by the European Parliament’s ENVI committee today and by EU member states, which can either approve or reject it in the next two months as no amendments are allowed. However, the period can be extended for another two months if requested by the Parliament or Council.

The draft delegated act was published on 8 February by the EC to address the issue of Indirect Land Use Change (ILUC) under the new post-2020 EU Renewable Energy Directive (REDII). It sets out specific criteria for determining high ILUC-risk feedstock, classifying palm oil from large plantations as a high ILUC-risk feedstock that should be capped at its 2019 level of consumption.

The delegated act has been criticised by the European association of farmers and cooperatives (Copa Cogeca), which called on the European Parliament to reject the Commission’s delegated act.

“Despite some technical improvements to the first draft, the definition of low ILUC-risk biofuels proposed by theCommission is littered with loopholes that are a serious cause for concern among the European farming community,” Copa-Cogeca said.

“A first concern arises from the determination of palm oil as the only high ILUC-risk feedstock from palm, excluding all other palm products from the scope. Worse still, the current proposal grants a special exemption for palm oil produced by small farm holders. For Copa-Cogeca, this approach is highly controversial as there are no guarantees that smallholders are not associated with deforestation, which was the overall objective of the regulation.Under such provisions, there is a significant risk that the use of palm oil for energy will increase.”

European renewable ethanol association, ePure, also called for the EC to remove the exemption for smallholders and to classify palm oil side streams as high-ILUC risk feedstocks.

“The revised text still leaves open a loophole that would allow significant amounts of palm oil to count towards the EU renewables target through the so-called ‘low ILUC-risk biofuels’ category, by giving smallholders a free pass on proving that measures have been put in place to improve agriculture practices or that they have cultivated unused land,” said ePure secretary general Emmanuel Desplechin.

ILUC occurs when pasture or agricultural land previously destined for food and feed is diverted to biofuel production.

The Taipei Times reported that the Council of Palm Oil Producing Countries, whose members Indonesia, Malaysia and Colombia producing about 90% of global supply, was planning to jointly challenge the act through bilateral consultations, as well as through the World Trade Organization (WTO) and the Association of Southeast Asian Nations (ASEAN).