Malaysia to file WTO lawsuit against EU

EU plans to phrase out palm oil-based biofuels imports to the World Trade Organisation (WTO) by 2030.Photo: RAZAK GHAZALI

Malaysia plans to file a lawsuit on 15 January against the European Union (EU) on the trade bloc’s policy to phase out palm oil-based biofuels imports to the World Trade Organisation (WTO) by 2030.

Datuk Dr. Mohd Khairuddin Aman Razali, Plantation Industries and Commodities Minister said at a press conference at the Palm Oil Economic Review and Outlook Virtual Conference 2021, that Malaysia will continue to fight against any discriminatory actions which pose a threat to the country’s economy and the livelihood of its people.

The EU has adopted a delegated act proposal that implements the Renewable Energy Directive II (REDII). In RED II, the overall EU target for Renewable Energy Sources consumption by 2030 has been raised to 32% which indicates phasing out the usage of biofuels.

The directive suggests that crops like palm oil could cause deforestation and increase use of transportation fuel which contributes to greenhouse emission and indirectly leads to land-use change – which then classifies these crops as a “high-risk” activity.

The Minister explained that Malaysia is seeking an unbiased judgment over the EU act, which excludes palm oil as part of its accepted biofuel mix, and that a memorandum has been brought to the Cabinet. He said, that Malaysia will take action against the EU for what Malaysia sees as discriminatory actions against the country.

Malaysia and Indonesia are the world’s top producers of palm oil, supplying about 85% of the demand worldwide. Indonesia filed in December 2019 its lawsuit against the trade bloc to the WTO stating that the restrictions on palm oil-based biofuel are unfair and requested consultations with the trade bloc.

Source: The Malaysian Reserve

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