Malaysia, Indonesia say EU palm moves will hit 18 million farmers

Malaysia and Indonesia have said EU lawmakers' attempts to curb palm oil use in biofuels will impact the livelihood of 18 million farmers, is unfair, and may trigger retaliatory measures.

According to a joint statement by leaders of both countries – which together account for 82% of the world’s palm oil output – they will join forces to prevent any moves by EU to curb the use of palm oil, including by lobbying the EU.

"Some attitudes and policies that are detrimental to the economic interest and reputation of palm oil-producing countries must be eliminated," President Joko Widodo of Indonesia said in a joint news conference this week.

Malaysian Prime Minister Najib Razak is apparently eyeing joint action. "If we act independently, the impact will not be that effective," the country's state news agency quoted him as saying.

In April this year, the European Parliament passed a non-binding resolution calling for legislation to introduce a certification scheme for sustainable palm oil in a bid to curb use of the highly carbon-intensive fuel to meet its emissions targets.

And last month a junior committee of the European Parliament amended an EU Commission bill to ban the use of palm oil in biofuels from 2021.

While the April resolution is not binding, it does add political pressure on the EU Commission to take steps to verify that palm oil used in biofuels is not increasing, rather than decreasing emissions.

However, last month’s proposed amendment to the Renewable Energy Directive – should it be passed by the parliament and agreed by the Commission and Council, would be legally binding.

While some lobby groups are optimistic that the proposal will hold, others think that it will be dropped, if not by the full parliament when it votes in January, then in trialogue negotiations with the Council and the Commission when they hammer out the final bill.

“The parliament will unlikely let go of this easily as it should be united on this front,” said one Brussels lobbyist.

Almost half of all palm oil in Europe goes to biodiesel, according to leaked documents published by lobby group Transport & Environment published one year ago, with palm accounting for around one-third of crop-based biodiesel.