MPOC expects EU's Parliament to give nod to delay implementation of deforestation regulation
23/10/2024 (Bernama), Kuala Lumpur - The Malaysian Palm Oil Council (MPOC) expects the European Parliament to approve a proposal to delay implementing the European Union Deforestation Regulation (EUDR).
According to the MPOC, EUDR provisions on the application date will be put to a vote in the European Parliament.
MPOC chief executive officer Belvinder Sron said the European Council had approved delaying the EUDR implementation until Dec 30, 2025, in response to pressure from global commodity producers, EU member states, and businesses.
She noted two possible outcomes in the EU Parliament vote.
“Firstly, the 12-month extension is accepted without amendments, extending the transition period until Dec 30, 2025 for all stakeholders, and until June 30, 2026 for EU small and medium enterprises.
“Secondly, the extension is accepted, but with additional safeguards to ensure that all stakeholders meet their commitments and responsibilities,” she told Bernama.
Belvinder said the extension could be used to address issues, namely working towards an exemption for smallholders to prevent their exclusion from international supply chains, putting in place transparent benchmarking criteria, and with Malaysian Sustainable Palm Oil (MSPO) certification accepted as a compliance tool for the EUDR.
“These improvements [vis-a-vis] the EUDR will facilitate market access for Malaysia's palm oil into the EU,” she said.
The cost of EUDR compliance is estimated to be US$650 million (RM2.83 billion) annually, with US$260 million affecting smallholders directly.
She reiterated that the council anticipates a delay in the regulation's implementation, which would provide additional time to support smallholders and facilitate a smoother transition for businesses.
“Malaysia’s palm oil producers are fully prepared to comply with EUDR requirements, backed by the mandatory MSPO certification that guarantees traceability and legal compliance.
“The MSPO standard should be included in Malaysia-EU Free Trade Agreement discussions, or mutual recognition should be considered,” she said.
Belvinder also said the MPOC had consistently defended Malaysia’s interests throughout the EUDR process, having challenged the unfair classification of Malaysia as "high-risk", and advocating for a "low-risk" status based on the country’s commitment to sustainable practices.
“Malaysia has made significant environmental progress, including a 57% reduction in primary forest loss by 2022, according to the World Resources Institute’s Global Forest Watch.
“Given these achievements, Malaysia should be classified as ‘low-risk’ under the EUDR’s unilaterally imposed benchmarking system. Bilateral engagements will also be necessary to mitigate any potential impact,” she said.
On Oct 16, the EU Council agreed to postpone the implementation of the EUDR by 12 months.
According to the council, the postponement will allow third countries, member states, operators, and traders to prepare for their due diligence obligations, ensuring that certain commodities and products sold in the EU or exported from the EU are deforestation-free.
This includes products made from cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some products derived from them.
“If approved by the European Parliament, the regulation will be binding from Dec 30, 2025 for large operators and traders, and from June 30, 2026 for micro and small enterprises,” the council added.