Actions by the European Union (EU) to restrict access to palm oil has prompted a lawsuit by Malaysia and Indonesia. The legal action was filed through the World Trade Organization (WTO), a form of arbitration. Malaysia is the world’s second largest palm oil producer, and has a mandatory national sustainable certification program in place.  

As reported in The Malaysian Reserve, “the European Commission has adopted the delegated act proposal to implement the EU Renewable Energy Directive for 2021-2030, which will gradually limit and phase out biodiesel imports into the bloc until 2030. The directive suggests that oil palm cultivation contributes to greenhouse emission, deforestation and indirect land-use change, which then classifies it as a “high-risk” activity.”

In this legal action, Malaysia seeks an unbiased judgment over the EU’s delegated act, which excludes palm oil as part of its biofuel mix. Says Malaysian Palm Oil Council CEO Datuk Dr Kalyana Sundram, “The next step for us, similar to Indonesia, is to wait for the official response from WTO and the EU as the bloc has been notified of the complaint. Prior to this, we internally evaluated the viability of whether we had grounds and opportunity to lodge a strong action against the EU at the WTO.”

He added, “The core of the delegated act is that it prescribes the exclusion of palm oil in the biodiesel mix in Europe until 2030 while allowing the usage of other oils. It violates the principles of free trade under WTO.”

Rather than contributing to greenhouse gases, Malaysia’s oil palm plantations are net carbon sinks. Further, palm oil cultivation requires approximately 1/10th the amount of land as other seed crops approved by the EU for biodiesel use; a palm oil ban would logically lead to more deforestation, not less.