Malaysia to take legal action against EU over 'anti-palm oil campaign'

By Esther Landau - July 1, 2020 @ 9:52pm

KUALA LUMPUR: Malaysia is set to take legal action against the European Union's allegedly discriminatory "anti-palm oil campaign" via a dispute settlement mechanism under the World Trade Organisation (WTO).

Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali said the legal action is based on basis and justification and is in line with the trade principles underlined by the WTO.

He said the EU's policies under its European Union Renewable Energy Directive II (EU RED II) Delegation Regulation has created an unreasonable ban on the sustainability efforts that have been and are being implemented by Malaysia with regards to palm oil.

The delegation regulation, he said, thus restricts free trade practices.

"This discrimination by the EU will have a negative impact on more than three million Malaysians involved in the palm oil industry, as well as over half a million oil palm smallholders," he said in a statement today.

The EU had approved EU RED II on Dec 2018. The delegated regulation, among others, explained the criteria or methodology used to decide whether the sources in the manufacturing of biofuel can lead to a high or low indirect land use change (ILUC) rate, as well as its effects on green house emissions.

"In this matter, based on the delegated regulation, palm oil was categorised as having a high ILUC rate. This is expected to affect the amount of palm oil export to EU countries as biofuel with a high ILUC rate would not be taken into account in calculating its renewable energy target.

Mohd Khairuddin said the delegated regulation has a host of problems in terms of transparency and scientific credibility, with numerous presumptions made to present an incorrect image of the sustainability of Malaysia's oil palm industry.

"It is also seen as being one-sided when only palm oil is categorised as having a high ILUC rate risk among vegetable oils in terms of biofuel sources.

He said Malaysia will also act as a third party in Indonesia's WTO case against the EU.

"Malaysia's involvement is seen as a sign of support and solidarity as well as its commitment as a fellow palm oil manufacturer with Indonesia to tackle the anti-palm oil issue," he said.