© Nikkei Markets
KUALA LUMPUR (Mar 13) — Malaysia hopes the European Commission will not submit a proposed ‘delegated act’ to phase out palm oil in biofuels by 2030 in the next EU Parliament session even as the world’s second largest exporter of the commodity has no immediate plan to approach the World Trade Organization to resolve its differences over EU’s move on palm oil exports.
“As member of the WTO, Malaysia has an option to bring this palm oil issue to the Dispute Settlement Body in WTO, but it only can be made if we have the details and clarity of the new law on palm oil from the EU,” International Trade Minister Darrel Leiking said in parliament. “Then only Malaysia and other members that are affected by the ruling can see whether it is against WTO rules.”
The EU Commission is still discussing the so-called delegated act for Indirect Land Use Change, which once approved as law, will have a big impact to the palm oil industry, Leiking said. “So we will wait for more information before we take decision with our counterpart from other countries,” he added.
Last month, the European Commission said the use of palm oil in motor fuel should be phased out because oil palm cultivation often leads to deforestation. Top palm oil producers Indonesia and Malaysia, which together control about 85% of global oil palm output, have repeatedly voiced their protest against the EU’s move and recently met the EU executive to discuss the issue.
“Our expert team has made a presentation to the European Commission and related bodies. We just hope the European Commission won’t table the delegated act to phase out palm oil in the European Parliament’s sitting in April,” said Teresa Kok, minister of primary industries.
The European Commission published a draft of the delegated act to phase out palm oil but not soybean on Feb. 8, a week later than its original deadline. The commission is expected to finalize the act this week that will give the European Parliament the required two months to review and potentially object to the act. The issue assumes importance as the European parliamentary election will be held in May.
– By Sarah Nadlin Rohim and Gan Pei Ling