A Dutch industry body has asked the government to lobby for the European Union to exempt sustainable palm oil used in food from import tax, to promote environmentally-friendly practices in the biggest producers, Indonesia and Malaysia. Palm oil for food manufacture currently incurs 3.8% tax.
More than 80% of it is produced in Indonesia and Malaysia and environmentalists have been pushing for the introduction of sustainable palm oil certification since 2008.
Food producers are under pressure from environmentalists to use sustainable palm oil, which accounts for 10% of total output and is more expensive than regular palm oil because of costs associated with certification.
Frans Classen, general manager of the Dutch Product Board for Margarine, Fats and Oils, said it was important to reduce the cost of sustainable palm oil as buyers wanted lower prices at this time of economic crisis.
“To make it more attractive for buyers, we need to cut the cost and the way to do it is to abolish a 3.8% import tax for sustainable palm oil used in food production,” he said.
Government officials could not be reached for comment.
Classen said the board, an umbrella organisation for the industry, wrote to the Economy Minister Maxime Verhagen last week asking him to push for a tax cut in talks with European Union counterparts.
“Despite various initiatives, European as well as global demand for actual supplies of sustainable certified palm oil has been very slow to develop,” the board said in its letter.
“The additional costs for certified sustainable palm oil are evidently a barrier in the market which is proving difficult to overcome in these economic times.”
Since 1995, global palm oil production more than tripled to 46.7 million tonnes.
Palm oil consumption is expected to rise 5% this year with India, China and Europe being major importers.
Last year the EU imported 5.4 million tonnes of palm oil, of which one third was imported by the Netherlands to be used in the food processing industry or for biofuels.
