The two dominant palm-oil producers, Indonesia and Malaysia, have criticised the European Union for backing a ban on the product’s use in biofuels.
A Malaysian minister called it protectionist and a form of “crop apartheid”.
Members of the European Parliament approved draft measures to reform the power market and cut energy consumption in an attempt to meet the 2015 Paris climate agreement.
The measure includes a ban on the use of palm oil as motor fuel after 2021. It is also used in lipsticks, ice creams and numerous other products.
Indonesia and Malaysia together account for nearly 90 per cent of the global supply of the oil with a large portion of European imports used to make biofuels.
And there were fears others could follow suit.
“Europe is considered a trend setter,” said Malaysia’s Palm Oil Board director general Ahmad Kushairi Din. “People will start shying away from it.”
Malaysia has threatened to cut of trade ties with nations that reduce palm-oil consumption and in 2017 it warned that it was reviewing its trade with France in response to legislation to limit the use of palm oil in biofuels.
“This vote is very disappointing. It’s a black day for free trade. You are discriminating against palm oil,” said Malaysian minister of plantations Mah Siew Keong.
By allowing other vegetable oils to be used in biofuels, the bloc was targeting palm oil, he claimed.
Earlier this week, hundreds of Malaysian small palm planters marched on the EU’s office in Kuala Lumpur to hand in a petition against the biofuel ban.
The European Union, which accounted for 12 per cent of overseas palm-oil shipments, is Malaysia’s second-largest market for the commodity, after India.
Indonesian trade minister Enggartiasto Lukita said there should be fair treatment for all vegetable oils, adding that Jakarta had challenged the EU’s “negative campaign” on palm oil on several previous occasions.
Palm-oil producers have been blamed by EU activists for deforestation. But nothing has been decided yet. The European Parliament, European Commission (the EU’s executive branch) and member states must now agree on the measures before they become law.
Mah said Malaysian ambassadors in all 28 EU members would raise objections and the government would work closely with Jakarta to protect exports.
“The government will not tolerate the denigration of the palm-oil industry and will ensure Malaysia gives a fitting response to those who harm the palm-oil industry,” Mah told the media. “The EU is practising a form of crop apartheid.”
IOI Baturong Palm Oil Mill in Kunak District, Sabah, Malaysia. Picture credit: Wikimedia