EU’s deforestation regulation ‘unjust’: Malaysia

24 April 2023, EU: Malaysia’s has criticised the EU’s deforestation regulation (EUDR), calling it “unjust”.

“The EUDR is unjust and serves primarily to protect a domestic oilseeds market that is inefficient and cannot compete with Malaysia’s efficient and productive palm oil exports,” Malaysia’s deputy prime minister and minister of plantation and commodities Fadillah Yusof said in a statement to the bloc’s approval of the regulation.

The EUDR requires mandatory due diligence from operators and traders selling and importing cattle, cocoa, coffee, oil palm, soya, rubber and wood into the EU. Products sold in the EU must not have caused deforestation or forest degradation, according to the regulation.

The EUDR would ultimately increase poverty, reduce household incomes and harm Malaysia’s rural communities, Yusof added. “It is a deliberate effort to increase costs and barriers for Malaysia’s palm oil sector, including more than 450,000 smallholders,” Yusof said.

The deputy prime minister said he was disappointed to witness the EU “withdrawing from the global marketplace and erecting protectionist barriers”.

Malaysia palm oil is sustainable and the MSPO standard has “helped reduce deforestation from palm oil to effectively zero”, Yusof added.

The adaptation of the EUDR could possibly push Malaysia closer to a palm oil export ban to the EU, which the deputy prime minister had previously mooted.

Malaysia and the world’s largest palm oil producer Indonesia are “considering an appropriate response to this Regulation, given the importance of the palm oil sector and the clear intent to impose an unjustified trade barrier,” the statement said.

But it is not clear how would Indonesia act in the face of the regulation as Jakarta recently implemented a 35pc biodiesel blending mandate in all road transport fuels, possibly in a bid to promote domestic consumption of the vegetable oil.

The UN Food and Agriculture Organisation estimated EU consumption represents around 10pc of global deforestation with more than two-thirds coming from palm and soy.

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