MALAYSIA is going on the offensive to inform the European Union (EU) about its palm oil policy while preventing EU from taking what is being portrayed as a “propensity towards protectionism”.

Germany, Europe’s strongest economy, takes a softer approach in the palm oil issue among EU members, particularly in southern Europe with a strong cluster of suppliers of edible oil.

The phasing out of the use of palm oil as bio-fuel by 2030 in the EU is a challenge facing Indonesia and Malaysia, the two biggest producers.

“The export of palm oil is important for Malaysia’s economy. We endeavour to inform and update not only our German friends but also other Europeans on the efforts we are undertaking to address concerns on palm-oil related issues to achieve a ‘win-win’ situation for all parties involved.

“The Malaysian government will continue to engage and have a dialogue in this regard with various institutions in the EU,” said Sarah Nava Rani Albakri Devadason, Malaysia’s ambassador to Germany.

Malaysia is going to raise concerns on the so-called phasing out of Indirect Land Use Change (ILUC) at WTO meetings such as the Committees on Technical Barriers to Trade (TBT), Trade and Environment (CTE) as well as the Council for Trade in Goods (GTG) and through the organisation Friends of Palm Oil.

Indonesian President Joko Widodo, along with Malaysian Prime Minister Dr Mahathir Mohamad, had written to the EU to resolve the issue of palm oil. 

Both leaders had voiced their concern over the treatment of palm oil by the European Commission, which had decided a few months back that deforestation of the rainforests in Southeast Asia for palm plantations disqualified the oil as source of sustainable fuel.

Some Asean member countries suspect that the EU decision was due to growing protectionism rather than a scientifically-based decision.

Should the EU persist with its opposition to palm oil-based bio-fuel, German businesses dealing with the Asean region fear, there could be repercussions for European exports and businesses as well, affecting ongoing trade negotiations, supply contacts and key imports from the EU.

Echoing sentiments prevalent in both Indonesia and Malaysia, German company representatives privately said the lobby of the French rapeseed oil cultivators and soya farmers in America was driving anti palm-oil sentiments in the West.

The affected palm oil supplying nations in Asean could also, of course, take the issue of palm oil to the World Trade Organisation.

Meanwhile, Malaysian officials have been reinforcing their commitment to producing sustainable palm oil, meeting “the strictest standards of sustainability required by the EU and the world”.

They hope that Malaysian Sustainable Palm Oil (MSPO) certified palm oil will continue to be “the palm oil of choice” for European consumers and buyers.

According to Sarah Nava, Malaysia is also collaborating with International & Carbon Certification (ISCC) towards strengthening MSPO principles and criteria, in line with globally accepted practices on sustainability. Currently, Malaysian biofuels exported to the EU are fully certified by the ISCC.  Malaysia is, nevertheless, concerned about the new ILUC requirement and criteria, and the methods used to calculate emissions from ILUC which are not fully endorsed by a majority of experts, and which may be inaccurate or inconsistent. – Bernama, August 29, 2019.