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French palm oil tax vote elevates food sustainability questions

France upped the ante on sustainability reporting for the food sector after its parliament voted on Thursday in favour of a €90/t import tax on non-sustainable palm used for food purposes.

Palm imported for use as a biofuel has been exempted from the new tax, reflecting the stringent RED sustainability requirements which have separated vegetable oil streams used for biofuels from those used for food for several years. The new French legislation remains much woollier on the definition of “sustainability” than the detailed legislation governing biofuels feedstocks, saying merely that palm oil will need to meet the “criteria of environmental sustainability” to escape the new tax.

The prospect of new taxes on palm has unsurprisingly already attracted the ire of Malaysian and Indonesian producers who argue the levy constitutes a “disproportionate” and “discriminatory” tax on palm oil produced in the developing world. Malaysia’s Palm Oil Council says the tax violates WTO and EU trade rules. MPOC says the new tax will hike French palm oil duties from 21.67% at present to 209.7% when it comes into force in 2017. French taxes on rapeseed oil sit at 11.69% by comparison, with soybean oil tax at 23.64%, MPOC says.

MS – 17/03/2016

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