Malaysia to Take Legal Action Against EU on Palm Oil Biofuel with the WTO

According to a report in The Straits Times last week, the Malaysian government is taking legal action against the European Union’s restrictions on palm oil-based biofuels with the World Trade Organization (WTO). Plantation Industries and Commodities Minister Mohd Khairuddin Aman Razali said the EU’s renewable energy directive (RED) ‘restricts free trade practices.’ 

“The policies adopted by the EU in the Delegation Regulation under the European Union Renewable Energy Directive II have created unreasonable restrictions on Malaysia’s sustainability efforts,” he was quoted by The Straits Times. Malaysia, the second biggest palm oil producer in the world, will be challenging the EU via the WTO’s dispute settle mechanism.

Last year, the European Commission passed a law to phase out the use of palm oil in transport fuel between 2023 and 2030, after concluding that its cultivation resulted in excessive deforestation. Palm oil’s biggest producer Indonesia had earlier challenged the law at the WTO in December, claiming the bloc’s restrictions were unfair. As a sign of solidarity and to show its commitment to address the ‘anti-palm oil campaign’, Khairuddin said Malaysia would act as a third party in Indonesia’s WTO case.