The European Union is unlikely to ban the use of palm oil as a biofuel due to fears it may push up prices, a senior economist with agricultural analyst LMC International Ltd. said Thursday.
The European Union is unlikely to ban the use of palm oil as a biofuel
due to fears it may push up prices, a senior economist with agricultural
analyst LMC International Ltd. said Thursday.
Using palm oil as a biofuel has sparked controversy because of concern that it
could contribute to deforestation in producing countries, particularly the
world's largest exporter
Indonesia
, and
push food cultivation into environmentally sensitive areas.
But Sarah Hickingbottom, a senior research economist for LMC International Ltd,
said price pressure means the EU is unlikely to stop the use of the oil as a
fuel source.
"People are now getting government subsidies to burn palm oil, shells and
biomass directly for electricity," she told an agricultural conference in
Brussels
.
"If they cut palm oil the prices in
Europe
will
be considerably higher than the rest of the world," she said. "I'm
not sure governments will have the will to disrupt it completely."
Indonesia
plans
to impose a 2% export tax on biodiesel for the first time in October, in a bid
to curb rapidly rising exports of oil, which is also an important domestic
source of cooking oil, according to reports.
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