This is written by my colleague Rupa Damodaran.
KUALA LUMPUR: Malaysia is prepared to submit comments to the US Environmental Protection Agency (EPA), criticising its recent actions which could lead to a trade war of commodities.
Palm oil expert Tan Sri Yusof Basiron said the industry players will also respond to the EPA's findings which said palm oil biofuel had failed to meet the US greenhouse gas saving standards.
Europe has been a precedent and this has been cleverly copied by the EPA, he said. "It is all absurd and ridiculous if you can scheme your calculations to show low emission for one commodity against another and there is no physical or scientific justification for a fair calculation," he commented on news reports.
EPA's analysis shows that biodiesel and renewable diesel produced from palm oil from Malaysia and Indonesia do not meet the minimum 20 per cent lifecycle greenhouse gas reduction threshold needed to qualify as renewable fuel under the Renewable Fuel Standard (RFS) programme.
It said the biodiesel and renewable diesel produced from palm oil have estimated lifecycle greenhouse gas emissions reductions of 17 per cent and 11 per cent, respectively, compared to the baseline petroleum diesel fuel they replace.
It welcomes public feedback by February 27.
Meanwhile, former senior US government official James K. Glassman of the George W. Bush Institute also commented that the EPA's recent actions are raising questions about protectionism and ideological bias. "My worry is that misguided protectionism and a preference for ideology over science may be at work here."
What he found disturbing was that the US seems to be following the lead of Europe in both these respects - not to mention the lead of California (which discriminated against out-of-state biofuel additives).
Palm oil, he commented, is a vegetable oil, like canola and soyabean, which can be used for both transportation - where it's mixed with petroleum-based diesel to create a cleaner-burning fuel - and for electricity generation.
He said the reasons were a surprise and a unpleasant one when the EPA ruled that palm oil does not qualify as "a feedstock" to produce biodiesel and renewable diesel under the RFS programme.
The RFS mandates the blending of biofuels, mainly ethanol produced from corn, into petroleum-based fuels in stages, up to 36 billion gallons by 2022.
But the EPA has to approve the fuels as being bio-friendly enough. The standard that palm oil has to meet is a reduction of 20 per cent in greenhouse gas emissions over its "lifecycle" - which includes not just what gases palm oil fuel spews into the atmosphere when it's burned but also what gases are released in the growing of palm trees and the production of the biofuel.
Dr Lee Lane, a visiting fellow of Hudson Institute, in a recent presentation described the biofuels programme as flawed, especially with the arbitrary greenhouse gas standards, unreliable measurements and protectionist intent.
He said the EU has ruled against palm oil and the EPA seems in the process of doing so with the changes in the US RFS and reform of EPA which may affect palm oil.