EU's latest ban to add to administrative burden, high output costs to Malaysian palm oil sector
13/12/2022 (News Straits Times), Kuala Lumpur - KUALA LUMPUR: The new European Union (EU) import ban may affect the palm oil industry especially smallholders, said the Malaysian Palm Oil Board (MPOB).
MPOB director general Datuk Dr Ahmad Parveez Ghulam Kadir said the EU's regulation only targeted the cultivation of commodities from developing economies as the major challenge in protecting the global environment.
Ahmad Parveez said the implication for the oil palm industry was expected to be from the due diligence statement which would add to administrative burden and higher cost of production vis-à-vis domestically produced rapeseed oil and sunflower oil.
"There is a discrimination here as as other crops such as rapeseed and sunflower are not targeted. In addition, smallholders may struggle to comply and be excluded from the EU market," he said in a statement.
According to a statement shared on the European Commission (EC) website, the EU had reached an agreement on Dec 6 to ban the import of several products.
This includes palm oil, beef, soy, coffee, cocoa and timber which have been identified as a "driver of deforestation" if they come from deforested land after Dec 31, 2020.
Ahmad Parveez stressed that Malaysia was strongly committed to producing palm oil according to sustainable principles and criteria under the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme.
Recently in 2022, he noted that Malaysia had revised the MSPO standards to be in line with international norms, increase credibility and expand broader scopes for recognition from the global market.
Improvements on matters involving social and labour issues, good practices, High Conservation Values (HCV), Social Impact Assessment (SIA), and quantification of greenhouse gas (GHG) emissions were considered in the revision of the MSPO standards.
Meanwhile, Ahmad Parveez said the development of the Malaysian oil palm industry was also governed by more than 60 regulations and laws, making it the most regulated industry in Malaysia.
He also highlighted that the involvement of the Malaysian palm oil industry in deforestation was very low due to implementation of the regulations and laws in Malaysia.
"This needs to be recognised by the EU. Based on the interpretation, palm oil and its products produced from existing palm plantations before Jan 1, 2021 are considered deforestation-free. Malaysia does not allow deforestation for oil palm cultivation. The EU must recognise products based on country of origin and not globally as is done for palm biofuel," he said.
In addition, Ahmad Parveez said the decline in primary forest loss in Malaysia for four consecutive years (from 2017 to 2020) might have contributed towards this downward trend as reported by the Global Forest Watch 2021.
"Malaysia is also fully committed to conducting constructive bilateral cooperation and negotiations to ensure that there is no discrimination in the conduct of international trade for market access for Malaysian products in the EU market," he added.