Malaysia calls on EU, state members to review palm oil cut


MALAYSIA has called on the European Union (EU) and its state members to review the trade bloc’s environmental policy which involves phasing out palm-based biofuels and look into the effects of the restriction more objectively.

The EU has adopted a delegated act proposal which implements the Renewable Energy Directive II (RED II), resulting in its member states raising renewable sources in their energy consumption mix to 32% out of the total energy consumption by 2030, which indicates phasing out the usage of biofuels.

In April, Belgium’s Minister of Climate, Environment, Sustainable Development and Green Deal Zakia Khattabi said Belgium will ban palm- and soy-based biofuel from 2022, aligned with the country’s initiative to combat deforestation.

Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali (picture) said Malaysia has given its full support to the Council Palm Oil Producing Countries’ (CPOPC) objection against Belgium’s decision to ban biofuels made from soy and palm oil.

He added that Belgium’s decision contradicted with the practices and principles of free-trade outlined by the World Trade Organisation (WTO) and could be seen as a form of discrimination against Malaysian palm oil products.

“Malaysia is one of the founding countries of CPOPC and we fully support CPOPC’s action in submitting a protest to the Belgium Prime Minister Alexander De Croo through a letter dated May 24, 2021, regarding the issue of the banning of palm oil as a biofuel in the country.

“Malaysia also believed that Belgium’s action corresponds to the EU’s RED issued by the European Commission after the same action was made by France and Lithuania.

“As the world’s second-largest producer of palm oil, Malaysia is very disappointed with the action which was taken without considering the significance of Malaysia’s effort in ensuring a sustainable palm oil industry,” he said in a statement yesterday.

He added that although the economic impact on Belgium’s action may be small to Malaysia, the action could badly portray Malaysia’s palm oil industry.

“Despite the small volume of local palm-based biofuel being exported to Belgium is small, its action can affect other countries’ perception of the industry and further give a negative image to Malaysia,” he said.

Malaysia has initiated legal action against the EU and its member states on Jan 15, 2021, on the implementation of the EU RED II by filing an application for consultation through the Dispute Settlement Mechanism under WTO.

“The legal action is underway and is following procedures outlined by the WTO. Malaysia will always be committed to ensuring the country’s palm oil industry is being conducted in a sustainable manner, in line with the Sustainable Development Goals developed by the United Nations.

“This commitment can be seen through other initiatives such as the mandatory implementation of the Malaysian Sustainable Palm Oil certification scheme,” he said.

Mohd Khairuddin added that the government through his ministry will continue to protect the interests of the domestic palm oil industry and ensure its sustainability to safeguard its contribution to Malaysia’s socio-economic development, especially to the rural community.