PETALING JAYA: Malaysia’s “unjust” classification under the European Union Deforestation Regulation (EUDR) that paves the way for its palm oil to be excluded from the EU market has been criticised by local palm oil producers.
Malaysian Palm Oil Council (MPOC) chairman Datuk Carl Bek-Nielsen has slammed the classification of Malaysia as a “standard risk” under EU’s deforestation rules.
He called the decision “very unfortunate and unjust”, given the country’s significant progress in curbing deforestation and raising sustainability standards in the palm oil sector.
“It is equivalent to getting slapped with a fine for speeding while you have been driving below the speed limit.
“I find it very unfair and a slap in the face to our industry, which has made tremendous efforts that have resulted in the area under oil palm reducing for the first time in over 100 years,” he told The Star.
He added that countries designated as “high risk” or “standard risk” may face more stringent oversight and elevated compliance requirements.
“These countries are expected to encounter significantly higher compliance costs due to stringent regulatory measures imposed by the EU.
“They will also be subject to intensified scrutiny from competent authorities within the EU,” he added.
According to the European Commission, the EUDR’s country risk classification considers the rate of deforestation and forest degradation, the rate of expansion of agriculture land for relevant commodities, and their production trends.
Malaysian Palm Oil Association (MPOA) chief executive officer Roslin Azmy Hassan echoed these concerns, describing the risk of EUDR becoming a non-tariff trade barrier and disproportionately affecting commodity producers in the Global South.
“For Malaysia, this could translate into palm oil producers, especially smallholders, being excluded from the EU, despite their compliance with national sustainability standards like the Malaysian Sustainable Palm Oil (MSPO) certification.
“Penalising them undermines their livelihoods and jeopardises broader socio-economic development goals,” he said.
Roslin added that EUDR could push EU importers and processors to bypass Malaysian smallholders entirely, opting for suppliers in “low-risk” countries to avoid compliance hurdles.
On May 22, the European Commission announced the EUDR country benchmarking results that put Malaysia into the “standard risk” category.
“The classification does not reflect Malaysia’s well-established and verifiable commitment to sustainable development and responsible land stewardship,” Roslin said.
“Malaysia is one of the few countries that has promised to keep at least 50% of its land covered by forests.
“This pledge was made at the 1992 Rio Earth Summit and is still upheld today.”
He added that the MSPO certification, a mandatory national standard covering more than 96% of the country’s palm oil supply chain, was built on internationally recognised environmental, social and governance (ESG) principles.
Roslin also questioned the fairness of the classification, highlighting that several EU member states with historical deforestation records were designated as “low risk”.
“This discrepancy raises serious concerns about the objectivity, transparency and fairness of the EUDR framework,” he said.
Despite ongoing consultations and Malaysia’s participation in engagement platforms such as the Joint Task Force with the EU, Roslin said these efforts have largely failed to yield substantive outcomes.
“Too often, these dialogues have turned into symbolic exercises, lacking in tangible policy outcomes or genuine collaboration.
“This raises serious questions about the integrity of the consultative process and suggests that the current regulatory path represents not just a technical misjudgment, but a discriminatory trade measure targeting palm oil while ignoring parallel issues in other regions,” he added.
When contacted, Deputy Plantation and Commodities Minister Datuk Chan Foong Hin said clarification will be sought from the European Commission regarding the methodology used for the benchmarking.
