No retaliation against EU yet for restricting palm biofuel

The EU’s dedicated regulation to completely phase out palm biofuel by 2030 is clearly against the free trade principle

KUALA LUMPUR: There is no retaliatory trade action being planned by the government against the European Union (EU) over its plans to phase out palm biofuel, says Primary Industries Minister Teresa Kok.

“It is important that any such move is carefully considered to ensure it does not hurt Malaysia’s economic interest in the long run.

“Moreover, such a move may weaken our case to the World Trade Organisation (WTO),” said Kok at the launch of Merdeka Fun Run 2019 in Taman Desa, Seputeh, yesterday.

Earlier last month, it was reported that Malaysia would submit a complaint to the WTO by November to challenge the EU restrictions on palm biofuel.

“The EU’s dedicated regulation to completely phase out palm biofuel by 2030 is clearly against the free trade principle,” she said.

When asked if Indonesia had agreed to join forces about the complaint, she said the Council of Palm Oil Producing Countries had already discussed this with the republic and received an agreement.

“Meanwhile, continuous efforts must be undertaken to identify new markets to push up the prices of palm oil,” she said.

She added that palm oil export was the country’s third biggest export, amounting to RM67.8bil last year alone.

On concerns that palm biofuel contributed to higher greenhouse gas (GHG) emission, she said measures were being taken to address such concerns.

“The Cabinet has decided that no oil palm plantation will be allowed in peat soil areas and permanent forest reserve.

“The ministry is also planning to plant one million trees in Sabah. We are serious about reforestation,” said Kok.

“We want to ensure oil palm plantation and the environment and wildlife can co-exist.”

Meanwhile, Malaysia External Trade Development Corporation directors board member Koh Swee Hyong said more efforts were needed to educate the public about the environmental impact of palm biofuel.

“Compared to soy and sunflower seed biofuel, palm biofuel uses less land. Palm trees reach maturity in five years, after which the palm fruits can be harvested for about 25 years,” he said.

“Soy and sunflower seeds, on the other hand, need to be replanted after being harvested, leading to higher GHG emissions.”