Malaysia worried EU resolution could dent palm oil exports

KUALA LUMPUR (Reuters) - Malaysia voiced concern on Wednesday that a call by European Union lawmakers for curbs on imports of palm oil could deal a blow to one of the Asian country’s biggest exports.

FILE PHOTO: A worker collects palm oil fruit inside a palm oil factory in Sepang, outside Kuala Lumpur June 18, 2014. REUTERS/Samsul Said/File Photo

In a vote aimed at influencing EU regulators, the European Parliament backed a call for greater vetting of palm and other vegetable oils used in biofuels to prevent the EU’s renewable transport targets for post-2020 leading to deforestation.

Diplomats from other big exporters of palm oil, including Indonesia, Costa Rica and Ecuador, have also expressed concern.

Malaysia’s Plantation Industries and Commodities Minister Mah Siew Keong said the resolution was unfair as it specifically targeted palm oil.

“We are very disappointed. To me, the resolution is biased and damaging to palm oil,” Mah told journalists on Wednesday.

“I expected it to come because now the whole world is talking about the environment and deforestation, but I still think it is not fair to target only palm oil.”

The parliament’s non-binding motion, backed in a vote by 640 to 18, calls for a single Certified Sustainable Palm Oil (CSPO) scheme for Europe-bound palm and other vegetable oil exports to ensure they are produced in a environmentally sustainable way.

EU lawmakers said the move was a bid for a wider discussion on the issues after environmental groups such as Greenpeace warned of harmful impact on climate mitigation and biodiversity.

“We want an open debate,” EU lawmaker Katrina Konecna.

While the report is not binding, EU lawmakers are now reviewing and proposing amendments to EU draft targets on biofuels, which will then go before the European Commission and member states.

The EU is Malaysia’s second-largest export market, accounting for 2,059,207 tonnes of palm oil products in 2016, based on Malaysian Palm Oil Board data. Of the amount, 30 percent is used for biodiesel, Mah said.

India is currently Malaysia’s largest palm oil market, importing 2,825,840 tonnes last year, while China was the third-largest buyer, taking 1,882,183 tonnes in 2016.

Mah said he has already written to EU Environment Commissioner Karmenu Vella and has also been engaging with European lawmakers on the issue.

“We plan to go to European parliament next month to give us a chance to address the lawmakers (on) why we think this resolution is not fair to palm oil,” Mah said, adding that they will at the same time engage other major importers such as China to boost their palm oil uptake.

Reporting by Emily Chow and Alissa de Carbonnel in Brussels; Writing by Joseph Sipalan; Editing by Christian Schmollinger and David Evans