Kuala Lumpur, 15 November 2024 – The Malaysian Palm Oil Council welcomes the EU’s decision to postpone its EUDR legislation for 12-months, and now calls on the EU to work with Malaysia to ensure that smallholder farmers are not prevented from accessing international supply chains, said MPOC Chief Executive Officer, Belvinder Sron.
The EU’s ‘Regulation on Deforestation-free Products’ (EUDR) was due to come into full force on 30 December 2024, requiring companies to ensure that products sold in the EU do not come from deforested or degraded land.
The European Parliament voted Thursday to postpone the regulation for 12-months and to include a four-tier classification system for countries which are considered to be either low, standard, high or no risk.
However, Ms Sron said a ‘no risk’ category in the four-tier classification system could provide a convenient off-ramp for legislators to exempt domestic companies from the legislation, which would constitute two-tier protectionist policymaking.
“A two-tiered approach to regulation – protecting European companies while penalising their international trade partners – would send the wrong message to the world, given that countries like Malaysia have worked so hard to comply with EUDR,” said Ms Sron.
Ms Sron called on the EU to class Malaysia as a low-risk country and to put in place transparent benchmarking criteria which accepts the Malaysian Sustainable Palm Oil (MSPO) certification scheme, the world’s first nationally mandated environmental standard enforceable by law, as an effective compliance tool for EUDR.
MSPO is Malaysia’s independently audited standard for sustainable palm oil production, which strengthens traceability across the entire supply chain by bringing operators, traders, and supply chain partners together to address deforestation, promote sustainability in the sector.
MPOC believes its MSPO certification scheme has been unfairly overlooked by the EU, even though it has contributed enormously to greater sustainability across the industry.
Since 2019, Malaysian palm oil production has not exceeded 19.85 million tonnes, partly because the oil palm plantation area has decreased by 4.2% (247,588 hectares) over the past four years.
According to the World Resources Institute’s Global Forest Watch, Malaysia achieved a 57% reduction in primary forest loss as of 2022, demonstrating the success of government and industry initiatives to curb deforestation.
Indeed, the rate of deforestation in Malaysia has been trending lower for some time, with Global Forest Watch reporting in June 2023 a sharp reduction in forest loss, showing that reversing deforestation is achievable.
Much of the progress has been down to the expansion of the MSPO certification scheme, which now covers over 80% of the industry and, more crucially, most of the more than 450,000 smallholders which account for 27% of Malaysia’s oil palm plantations.
MPOC Chief Executive Officer, Belvinder Sron said: “The decline in deforestation reflects Malaysia’s decision to refrain from expanding into new areas to prioritize environmental concerns. This further strengthens Malaysia’s position as a low-risk country under the European Union Deforestation Regulation or EUDR’s unilaterally imposed benchmarking system. Malaysia has reported a reduction in the expansion of its affected commodities under EUDR, namely oil palm, timber, cocoa and rubber.”
Ms Sron added: “As we strive for greater sustainability, transparency and accountability, all we ask of the EU is for greater cooperation and an open trading relationship. If EUDR is enforced incorrectly, environmental progress will be setback, destroying livelihoods, leading to increased poverty, increased costs for consumers and undermine the progress we have made in complying with EUDR.”
For more information on MPOC and Malaysian palm oil, visit www.mpoc.org.my
