Malaysia, Indonesia slam EU move on palm oil

KUALA LUMPUR: Top palm oil producers Indonesia and Malaysia today criticised the European Union (EU) for backing a ban on the use of palm oil in biofuels, with a Malaysian minister calling the move a protectionist trade barrier and a form of “crop apartheid”.
European lawmakers approved draft measures on Wednesday to reform the power market there and reduce energy consumption to meet more ambitious climate goals. The plan includes a ban on the use of palm oil in motor fuels from 2021.
Indonesia and Malaysia are the world’s top two palm oil producing countries, accounting for nearly 90% of global supply.
A large portion of European palm oil imports are used to make biofuels, giving the industry’s top two producers cause for concern as they fear overall demand will fall.
“This vote is very disappointing. It’s a black day for free trade. You are discriminating against palm oil,” Malaysia’s Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong told reporters at an industry conference here.
By allowing other vegetable oils to be used in biofuels, the EU was discriminating against palm oil, he said.
“The EU is practising a form of crop apartheid,” Mah said separately in a statement.
Palm oil exports are a key source of revenue for Malaysia. The EU is its second-biggest market after India.
Indonesian Trade Minister Enggartiasto Lukita told reporters in Jakarta there should be fair treatment for all vegetable oils, and that Indonesia had protested the EU’s “negative campaign” on palm oil on several occasions.
The palm oil industry has come under fire in Europe over its impact on forest destruction and Southeast Asian producers have faced calls to meet higher sustainability standards.
Mah said Malaysia’s ambassadors in the 28 EU member countries will raise objections and that he will work closely with Indonesia to protect the interests of smallholders.
“The government will not tolerate the denigration of the palm oil industry and will ensure Malaysia gives a fitting response to those who harm the palm oil industry,” Mah said. – Reuters