EU’s ban on palm oil import seen as biased

Johari said the ban will create undue restrictions and contradict free trade practices.

KUALA LUMPUR: The European Union’s (EU) ban on the import of palm oil as a biofuel by 2030 is seen as lacking in transparency and scientific reliability, which provides an inaccurate view of the sustainability practices practised in the country’s biofuel industry.

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the ban is also seen as biased and will create undue restrictions and contradict free trade practices as it violates the principles of the World Trade Organisation (WTO), namely the Technical Barriers to Trade and the General Agreement on Tariffs and Trade 1994.

He said in this matter, Indonesia and Malaysia have filed complaints with the WTO against the EU’s actions – Indonesia filed its complaint on Dec 9, 2019, and Malaysia filed its complaint on Jan 15, 2021 (about 13 months after Indonesia).

“In my opinion, Malaysia should not have taken such action. This is because the Delegated Act under the Renewable Energy Directive II (RED II) targets palm oil-based biofuels and does not touch on sustainability issues related to palm oil in general,” he said.

Johari said this during the Ministerial Question Time in reply to Teresa Kok Suh Sim (PH-Seputeh) who wanted to know whether the WTO’s decision on Malaysia’s appeal regarding the EU’s discrimination against palm oil still allows the union to implement the Delegated Act which bans palm oil as a biofuel by 2030 and whether Malaysia has the expertise to change the EU policy banning palm oil as a biofuel in 2030.

Based on the Delegated Act under the EU RED II, palm oil has been categorised as having a high indirect land-use change rate.

The import of palm oil as a biofuel source by the EU will be fully banned or phased out by 2030 if it is still categorised as having a high ILUC rate.

He said Indonesia is among the world’s leading biofuel producers; PME (palm methyl esters) is a key biofuel blend stock input in Indonesia and Malaysia.

“Based on statistics released by OilWorld, in 2023, an estimated 25.2% (12.2 million tonnes) of Indonesia’s crude palm oil (CPO) production (48.4 million tonnes) was processed to produce PME. In the same period, Malaysia (recorded) only 7.7% (1.4 million tonnes), of which biodiesel constituted 134,000 tonnes.

“Therefore, when the decision was announced, Indonesia took the stand that when it saw Malaysia had also filed this issue with the WTO, it decided to withdraw. They (Indonesia) suspended their case, so now it’s only Malaysia. — Bernama