Call on EU to reclassify M’sian oil palm cultivation activities

Their requirements are very low compared to the total production of the commodity, says MPOC CEO


MALAYSIA is calling on the European Union (EU) to redefine oil palm cultivation activities in the country which have been classified as high-risk, while aiming to further negotiate on the bloc’s directive to restrict the usage of biofuels.

Malaysian Palm Oil Council (MPOC) CEO Datuk Dr Kalyana Sundram said the EU’s generalisation of the cultivation activities is an injustice to a large portion of oil palm plantations in the country.

“We are asking them to re-evaluate their classification of oil palm cultivation as they have categorised all oil palm plantations as high-risk.

“What we are trying to tell them is that their requirements are very low compared to the total production of the commodity.

“If their criteria and standards are properly defined, of course a large portion of our cultivation could be redefined as low-risk,” he told The Malaysian Reserve recently.

Kalyana said the Malaysian government and its negotiating parties, including MPOC, are willing to cooperate with the European Parliament to straighten out the assumptions on the country’s palm-based activities.

“We are leaving our options open at this point. We would prefer to go down on a negotiated route and come to terms and conditions that all parties agree to before we take any action.

“We are not saying that the entire palm oil production is high-risk or low-risk, but we are willing to work with the EU to help them understand.

“Trade is a two-way negotiation…we are looking at the best possible ways that are based on scientifically proven facts and figures,” he said.

Last week, Primary Industries Minister Teresa Kok said Malaysia would discuss retaliatory measures with Indonesia against the EU biofuel directive.

The minister added that Malaysia would continue promoting oil palm cultivation in Europe, particularly to the new EU commissioner and European Parliament MPs who will be elected after the bloc’s 2019 election.

Among the possible actions that are being considered is to lodge complaints against palm oil limits to the World Trade Organisation (WTO).

“The palm oil producers are very unhappy with the delegated act. We feel that it is not WTO-compliant and does not contribute to the free trade agreement.

“The producing nations have indicated that they would be taking likewise trade-related activities against EU imports,” Kalyana said.

Kalyana added that a delegation — comprising Malaysia and Indonesia’s ministerial officers and regulating agencies — will be meeting with the European Parliament MPs as early as late August to extend the discussions on the directive.

“We have certain things that we need to address to them. We want them to take into consideration the recent Cabinet decision on the limitations of new deforested land for oil palm and the fact that Malaysia will move towards full certification on its entire supply chain.

“All of these (matters) need to be readdressed to the EU, which I think they have not taken into proper consideration when they first fast-tracked the delegated act.

“We are waiting for the MPs to settle. We could be meeting earliest in late August or latest by October this year,” he said.

The European Commission has adopted the delegated act proposal to implement the EU Renewable Energy Directive for 20212030, which will gradually limit and phase out biofuel imports into the bloc until 2030.

The regulation suggests that the oil palm cultivation contributes to deforestation, greenhouse gas emission and indirect land use change, and thus, classifies it as a “high-risk” activity.

Currently, about 30% of the total 5.85 million ha of oil palm plantation areas in the country are certified as Malaysian Sustainable Palm Oil.

Malaysia and Indonesia are the world’s top producers of the commodity, supplying about 85% of global demand.

The EU countries are the second-largest buyers for both countries after India, as Europe currently consumes 7.5 million tonnes of palm oil a year — about 10% to 15% of the global palm oil demand.