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EU to phase out palm oil from transport fuel by 2030

BRUSSELS, June 14 (Reuters) - EU negotiators on Thursday
agreed to phase out the use of palm oil in transport fuels from
2030, setting up a clash with producer countries such as
Malaysia and Indonesia.

A text of the deal, seen by Reuters, leaves the wording on
details of curbs on palm oil "yet to be agreed", with EU sources
saying the matter remains politically sensitive.

Limits on conventional biofuels in transport will be frozen
at the national level at 2020 but must not surpass 7 percent,
the text says.

Green lawmaker Bas Eickhout, one of the negotiators in tough
talks that ran until the early morning, said the use of palm oil
would be capped at 2019 levels until 2023 and reduced to zero by
2030.

"That is quite a victory. There is no precedent for a
phase-out of the use of specific crops," said Eickhout.

The European Parliament caused an outcry among palm
producers in Asia when it called in January for a total ban on
palm oil use in road fuel, as part of its negotiating position
for talks with member states to hammer out the final deal.

Indonesia, Malaysia and Thailand, which produce the majority
of the palm oil imported into Europe, had warned ahead of
Thursday's agreement they would retaliate against what they
called protectionist measures, if a ban was introduced.

A 2015 study funded by the European Commission found that
palm oil and soybean oil had the highest indirect greenhouse gas
emissions because of the deforestation and the drainage of
peatlands associated with their cultivation.

"Governments now have no more excuse to force drivers to
burn food or palm oil in their tanks after 2020," said Laura
Buffet at campaign group Transport & Environment.

Palm oil has been used increasingly as a feedstock for
biofuels because it is cheaper than locally produced rapeseed
oil. Half of the EU's 6 billion euros ($7 billion) worth of palm
oil imports are used for biodiesel, according to data from
Copenhagen Economics.

Thursday's agreement is part of a broader legislative
package aimed at reducing greenhouse gas emissions in the
European Union by at least 40 percent below 1990 levels by 2030.

This is part of the bloc's commitment to the Paris
Agreement, which aims to keep global warming well below 2
degrees compared to pre-industrial levels.
($1 = 0.8579 euros)
(Reporting by Robert-Jan Bartunek and Alissa de Carbonnel;
Editing by Dale Hudson)

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