Investing in palm biofuels gets a RED card from Brussels

In Australia, the Palm Oil Monitor reports on the European Union Commission’s latest “Climate Taxonomy” document, a new set of regulations that determine whether an investment by an EU bank or institution can be considered climate friendly, which can have major ramifications for palm oil, according to Palm Oil Monitor.

Palm Oil Monitor says, “The regulations do two things. First, they separate out different types of investments (e.g. agriculture, manufacturing, etc.) into two categories: investments that ‘do no substantial harm’ and investments that make a ‘positive contribution’ to climate change. For biofuels, the ‘positive contribution’ threshold for climate savings is set at 65 per cent. That means investments in palm-based biodiesel don’t qualify for the climate friendly designation. This isn’t surprising. However, what is surprising is that nearly all other crop-based biofuels don’t meet the threshold either, from rapeseed to soybean. But, for the ‘no substantial harm’ designation, the regulations defer to existing regulations under the Renewable Energy Directive (RED). This means that Brussels now considers not just the use of palm based biofuels to be harmful, but also any investment in those biofuels to be harmful.”