France to end palm oil tax breaks after outcry | News | DW | 16.11.2019
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France to end palm oil tax breaks after outcry

French lawmakers have voted to remove tax breaks for the use of palm oil as a biofuel. The tax incentive would have benefited energy giant Total, but it led to howls of protest from environmentalists.

France's parliament on Friday voted to remove tax breaks for the use of palm oil as a biofuel. The vote came a day after a ruling in favor of maintaining the advantage led to protests from environmentalists.    

In the second vote in two days on the issue, 58 MPs in the National Assembly voted against including palm oil in a list of biofuel sources that will enjoy tax breaks until 2026. Only two MPs voted in favor of keeping the palm oil tax break.

Read more: Biofuels: Good or bad for the environment?

Prime Minister Edouard Philippe called for the second vote. It came after the lower house of parliament on Thursday adopted a government-supported amendment delaying until 2026 the end of the tax advantages.

Watch video 01:19

Palm oil: Cheap or fair?

The measure would have benefited companies like French oil giant Total by giving them more time to phase out the use of controversial palm oil in biofuels. But it drew strong criticism from environmental activists who complained that the legislation had been rushed through without proper debate.

Studies show that palm oil drives deforestation, with vast areas of Southeast Asian rainforests having been logged or set ablaze in recent decades to make way for plantations. It also contributes to the destruction of habitat for endangered species such as orangutans, critics have said. The moves in Europe to restrict palm oil use, however, have created tensions with countries like Malaysia and Indonesia, which dominate global production of the oil.

The world's largest palm oil producers

Setback for Total

"Senators considering the text in the coming days and MPs who will have to consider it again before year-end will have to remain extremely vigilant to make sure that the scrapping of this tax break is not somehow again put into question during the legislative process," Greenpeace said in a statement.

Total had filed a lawsuit against the parliament's decision last year, saying lawmakers had unlawfully singled out palm oil. The company's CEO, Patrick Pouyanne, said last month the tax break was necessary "just to be able to compete with our European rivals who, unlike us, enjoy a tax advantage until 2030."

Enviromentalists say palm oil drives deforestation, with vast areas of Southeast Asian rainforests having been logged or set ablaze in recent decades to make way for plantations

Environmentalists say palm oil drives deforestation

But in October, the Constitutional Court rejected that argument, saying "legislators, knowing about the global palm oil farming conditions, used objective and rational criteria" toward achieving the goal of reducing emissions of greenhouse gases.

Total argued that removing the tax breaks would put at risk its biofuel production site in La Mede, southern France. The oil and gas company has invested €300 million ($331 million) to convert the site, a former crude oil refinery. It started production in July, using palm oil as part of the feedstock to produce biofuel.

sri/sms (Reuters, AFP)

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