(Oct 3): We live in a time where the price of being cheap is too high and being less bad does not create value anymore.

Abating climate change or weaning societies off fossil fuels is a noble mission, which should be pursued albeit pragmatically. However, policy makers, activists and, for that matter, journalists should also not be allowed to turn this mission into a quixotic crusade where we, like lemmings, are expected to jump off a cliff focusing entirely on optics and less so on real outcomes.

This is especially important amidst the relentless stream of news feed and social media postings, which have worsened our ability to distinguish data from narrative and separate the noise from the signal.

Contrary to what mainstream media portrays, data will reveal that ever since the first Conference of the Parties meeting in Berlin in 1995, the global consumption of oil has risen by 75%, usage of coal has increased by 60% and gas by 50%. Fossil fuels therefore still account for 82% of the global primary energy demand emitting over 70% of the world’s CO2 emissions.

Has the cart somehow been placed in front of the horse? Let us stop pretending and face the reality by acknowledging that meeting the climate pledge of keeping the temperature rise to 1.5°C over pre-industrial levels is regretfully not going to happen as long as fossil fuels remain the most convenient and cost-effective way of propelling societies forward. Indeed, the International Energy Agency has lately stated that global demand for oil will have to fall to 54.8 million barrels a day from the present 100 million barrels of oil per day in order to curb the rise of global temperatures. This is just not going to happen as the math does not add up.

The EU’s Green Deal aimed at transforming Europe’s economy to reach net zero emissions by 2050 is another well intentioned goal, but also in need of a major re-think.

The aim of the EU’s Deforestation Regulation (EUDR) compels businesses to demonstrate that products imported into the EU — such as cocoa, coffee, timber, livestock, palm and soy — are not sourced from land that was deforested after December 31, 2020, requiring companies to provide geolocation data for farms as proof of compliance. However, the consequences of implementing this ruling will disrupt supply chains excluding millions of smallholders around the world from the EU market, thereby impacting their livelihoods.

The EUDR under the EU’s Green deal therefore risks pushing millions of smallholders further back into darkness — instead of forward and into the light. This is wrong and it is unjust.

The Malaysian Palm Oil Council, including the private sector, have over the last two years emphatically stated that it is high time for the EU Commission to pull the handbrakes before the EUDR vehicle crashes at full speed into a wall. Of late we have even seen the Biden Administration in the USA, the German Chancellor Olaf Scholz and 17 developing and middle-income nations from Asia, Africa and Latin America appealing for the EUDR to be deferred as it is unworkable in its current guise.

Whilst most larger and medium-sized Malaysian oil palm growers are fully compliant with the EU’s Deforestation Regulation, thereby supporting the goal of ending deforestation, we must not fail to appreciate the plight of the millions of vulnerable smallholders as they often do not have the resources to overcome the bureaucracy associated with the implementation of the EUDR. Yet the smallholder communities make up about 27% of Malaysia’s palm producers, 45% of Indonesia’s palm producers and over 80% of Thailand’s palm producers. The same picture applies to the estimated 25 million coffee farmers around the world where 80% are smallholder producers working on plots of land smaller than five hectares and where the majority of production labour is provided by women. What will happen is that when the big producers or buyers are unable to do the full traceability required by EUDR right down to the small farmers, they will simply cut them off. This is the reality.

Palm producers are far from perfect and have been subject to much criticism in terms of deforestation. Much of this criticism has been valid but palm growers, notably in Malaysia, have over the last 10-15 years taken a leap of faith and committed themselves to more sustainable practices including pledges of zero deforestation as well as decarbonizing their supply chains.

Growers who have seen the light of sustainability have acknowledged their mistakes of the past and are now dealing with the present set of demands failing which they will have absolutely no role in painting the future.

The outcome has been that Malaysia’s total area under oil palm has over the last three years shrunk by about 200,000 hectares, effectively categorizing Malaysia as a 'low risk' country when it comes to deforestation. During the same time-frame soybean expansion in just Brazil has increased by six million hectares — which by the way is more than the entire landbank planted up with oil palms in Malaysia over the last 100 years.

The oil palm is no elixir; nevertheless it is one of the 10 most important agricultural crops providing humanity with an affordable and nutritious source of calories producing 35% of the world’s edible oils, yet taking up only 0.5% of all agricultural land.

The EU Commission would do justice by taking heed and remembering that the success of any regulation including the EUDR depends on whether a tide lifts all the boats in the harbour — or only the yachts. We in the Malaysian palm oil sector are partners in promoting sustainability and we wish to cooperate and progress towards rational initiatives that will benefit the global community and environment. This most certainly includes the important need to curb deforestation but without undermining the smallholder communities.

I will end with a quote from Oscar Wilde: "The truth is rarely pure and never simple.” What we therefore need, more than ever, is candour and a willingness by leaders to speak up and reveal the hard truths instead of burying their heads in the sand like an ostrich pretending that everything is pure and simple.

Datuk Carl Bek-Nielsen is the chairman of the Malaysian Palm Oil Council (MPOC)