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25-26 May 2010

Malaysia considers taking EU directive on palm oil to WTO

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Malaysia has no qualms about taking the discriminatory EU Renewable Energy Directive (EU RED) requirements for palm oil usage as biofuel to the World Trade Organisation, local business daily the StarBiz reported, quoting Malaysian Palm Oil Council chief executive officer Tan Sri Yusof Basiron.

“This is no joke but we will have to wait and cannot act on it now as the EU RED will only be implemented as national legislation by the year-end,” he told local and foreign participants on the last day of the International Palm Oil Sustainability Conference yesterday.

Yusof said the proposed directive had not only affected palm oil exports into Europe but also disrupted the business of European biodiesel producers planning to use palm oil as feedstock for their biofuel production.

He said palm oil greenhouse gas emission default values were severely misrepresented to disqualify palm oil from being used as approved biofuel in the European Union (EU).

Earlier, Yusof suggested the palm oil industry introduce new sets of sustainability certifications, such as the Malaysian Sustainable Palm Oil and the Indonesian Sustainable Palm Oil, as alternatives if the Roundtable on Sustainable Palm Oil (RSPO) certification is unacceptable to the EU and the United States.

“Many Malaysian and Indonesian palm oil producers have to endure the rigourous and expensive certification to produce certified sustainable palm oil (CSPO) for the EU market but the uptake of the premium product is still dissappointing,” he added.

Currently, about one million tonnes of RSPO-certified palm oil is readily available in the world market, he said, adding: “However, I believe only 200,000 to 300,000 tonnes of the premium CSPO were taken up by Western consumers.”

Apart from being the victim of the continuous attacks from Western environment NGOs, Yusof said: “Palm oil will need to comply with the certifications set by Germany and the US, apart from the EU RED requirements for biofuel usage in Europe.”

He said it was unfair for palm oil not to be given the rights to trade on fair grounds and had to be singled out for sustainability compliance while other competing oils were not subjected to similar poor treatment.

“Developed nations must be fair to developing countries which depend on palm oil to raise their income levels. They should employ fair trading mechanisms and legislations.”


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