Europe excludes palm oil biofuel from renewable sources. And Malaysia sues

Europe excludes palm oil biofuel from renewable sources. And Malaysia sues

For Europe, palm oil biodiesel is not a biofuel. But Malaysia does not agree and initiates a dispute claim

He is about to end up run over, his mother saves him

For Europe, the biodiesel produced with Palm oil it is not a biofuel. The new regulations, approved by the European Union, have excluded biodiesel from the list of biofuels and renewable energies. But Malaysia, the world's second largest producer of the controversial vegetable fat, is not doing so and has sued Europe.





Europe recently revised the list of biofuels. As part of this review, biodiesel made from palm oil and in general biofuels derived from palm crops are no longer considered a renewable source of energy. Thus, Malaysia has decided to take legal action both against the EU decision and against the member states France and Lithuania, the first countries to apply these rules.

In particular, Malaysia has filed a dispute complaint with the World Trade Organization.

"Malaysia argues that the contested measures of the EU and EU Member States France and Lithuania are inconsistent with the WTO Agreement on Technical Barriers to Trade, the 1994 General Agreement on Tariffs and Trade and the 'Agreement on subsidies and compensatory measures' reads the Organisation's official press release.

And it certainly didn't do it for the sake of renewables as it is the second largest palm oil producer in the world. According to the authorities of the country, the new European directive is a real "discriminatory action". For this he is seeking help under the dispute settlement mechanism of the World Trade Organization.

According to the Minister of Plantations and Raw Materials Mohd Khairuddin Aman Razali, the EU proceeded to implement the directive without considering Malaysia's commitment and views, even after the country had provided feedback and sent economic and technical missions to Europe .

The accusation leveled at Europe is that in this way

"The use of palm oil as a biofuel in the EU cannot be taken into account in the calculation of renewable energy targets and, in turn, will create undue trade restrictions for the palm oil industry".

The Ministry of Malaysia has thus decided to submit a request to the World Trade Organization asking to intervene against the European Directive on renewable energies.



And it is not the first country to do so. This is the second controversial complaint concerning EU measures relating to palm oil. Prior to Malaysia, Indonesia initiated litigation proceedings against EU measures in 2019. For this, Malaysia will also act as a third party supporting the Indonesian position. The country is the world's largest producer of palm oil.

What will happen?

The WTO explains that the request for consultations formally initiates a dispute within the Organization. The consultations give the parties the opportunity to discuss the matter and find a satisfactory solution without proceeding further with the dispute. After 60 days, if the consultations fail to resolve the dispute, Malaysia may request the intervention of a commission.

At the moment, however, the fact remains that palm oil biodiesel is no longer on the European list of renewable sources. And we can only be delighted as palm plantations for oil production are responsible for deforestation in many areas of the world.


To read the complete WTO document click here

Sources of reference: WTO / OMC, Reuters

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