Malaysia worried EU resolution could dent palm oil exports

He said the mandatory implementation of MSPO certification by end-2019 was seen as a move towards branding local palm oil as sustainably-produced and safe.

KUALA LUMPUR: Malaysia said on Wednesday that its palm oil industry faces a "big challenge", after the European parliament said in a non-binding resolution that only environmentally sustainable palm oil can be imported into the European Union after 2020.

Malaysia's Plantation Industries and Commodities Minister Datuk Mah Siew Keong said the resolution is unfair as it specifically targets palm oil and no other vegetable oil. The proposal calls for a single Certified Sustainable Palm Oil (CSPO) scheme for Europe-bound palm oil exports to make sure that the oil is produced using environmentally sustainable methods and prevents deforestation.

"We are very disappointed. To me, the resolution is biased and damaging to palm oil," Mah said at a news conference on Wednesday.

"I expected it to come because now the whole world is talking about the environment and deforestation, but I still think it is not fair to target only palm oil," Mah said.

The April 4 resolution seeks to establish a common EU standard to boost efforts to stop palm oil from becoming the cause of deforestation or exploitation of communities in producing countries and phase out using vegetable oils that harm the environment, according to an European parliament statement.

The resolution passed by a overwhelming vote of 640 to 18, with 28 abstentions, the statement said.

The EU is Malaysia's second-largest export market, accounting for 2,059,207 tonnes of palm oil products in 2016, based on Malaysian Palm Oil Board data. Of the amount, 30 percent is used for biodiesel, Mah said.

India is currently Malaysia's largest palm oil market, importing 2,825,840 tonnes last year, while China was the third-largest buyer, taking 1,882,183 tonnes in 2016.

Mah said he has already written to EU Environment Commissioner Karmenu Vella and has also been engaging with European lawmakers on the issue.

"We plan to go to European parliament next month to give us a chance to address the lawmakers (on) why we think this resolution is not fair to palm oil," Mah said, adding that they will at the same time engage other major importers such as China to boost their palm oil uptake. - Reuters