Revising EU renewables policy must not impede protein crop production and the EU regulation proposed last year by the European Commission to boost deforestation-free supply chains must be effective in halting deforestation, says Nathalie Lecocq, director general of EU vegetable oil and protein-meal industry association Fediol. Below an edited interview:
Is revision of the renewables directive progressing well?
EU renewables legislation is key for us. About 40pc of the vegetable oil [Fediol's member seed crushers and oil processors] produce from crushing might go into energy, whereas the other co-products, the protein meals, are all used for animal feed. Discussions [ahead of a September vote setting parliament's position] on revising the renewables directive have led to attempts to reduce the 7pc cap on crop-based biofuels counting towards the share of renewables [in transport]. We are also critical of attempts to change the high-carbon stock expansion threshold for assessing the risk of indirect land-use change (ILUC) or an accelerated phase-out of feedstocks. Those are options in some amendments voted by parliament's energy committee to the revision of the 2018 renewables directive [proposed by the commission in July 2021].
Are policy-makers leaning towards more restrictions for crop-based bio-energy?
We've seen policy moves towards suspension or waivers for the biofuels blending mandates with a fierce food and fuel debate. The availability of vegetable oils for biofuels allowed a quick response and redirection of volumes to food when Ukraine supplies stopped due to Russia's war. If you stop blending mandates, you no longer have this buffer available in supply crises. Reducing blending mandates or obligations negatively affects longer term EU oilseed and rapeseed production, sending a very negative signal to farmers.
Where do you stand on designation of soy feedstocks, in addition to palm, as at risk of high ILUC?
We're waiting for the commission's review. There have been reports that deforestation linked to soy has been reduced, while general deforestation has continued or increased. The question is whether crop-specific linkages will be taken into account in the commission's assessment.
Will the deforestation regulation be positive for the EU vegetable oil and protein-meal industry?
We support cleaning up supply chains to halt deforestation. But the text is too rigid to allow players to meet requirements even if you're already working hard against deforestation. Many smallholders will have more compliance difficulties within set timelines with very little EU help to implement. For the EU, this could mean greatly reduced availability even shortages with negative impacts on availability and prices.
Is the EU any closer to protein independence?
Biofuels do support production of protein crops, because oilseed crops, too, contain protein. From rapeseed, you get 40pc oil, but also 60pc protein-meal. We don't see how a protein plan can be built without biofuels. If we say no to traditional biofuels, we're disregarding the largest source of plant proteins available today in Europe and depriving farmers from an important outlet. Policymakers should bear this is mind when designing their protein strategy.
Is Europe losing crush plant facilities?
European production costs have increased markedly, not only due to energy, but also other factors. This affects the competitiveness of crushing and refining. We're essentially crushing and refining for the European market and competing with imported products. Competitiveness is a concern. We're seeing a competitiveness gap due to increased costs from EU legislation and regulatory burden which companies face, whether food-related, environment or climate policy.
Could we see a permanent shift to competing oilseeds away from sunflower?
The shift to other available oils has been done quite quickly, through reformulation in the food sector. That helped ease tension on the market. But then again sunflower oil market tension did not last so long. Prices have considerably dropped. Current sunflower oil prices are close or back to levels before the invasion of Ukraine by Russia. We'll move back to normality in terms of sunflower oil consumption. Ukraine sunflower production is still reaching the EU, albeit at much lower volumes.
