Removal of palm oil from the list of biofuels accepted in the EU: The response of Asian countries.
Palm oil was removed from the list of biofuels, as its production threatens the natural habitat of endangered species. Learn more in this blog!
Public awareness of environmental issues and the commitment of governments to protect biodiversity have strongly influenced the international business landscape. Several products have been singled out by associations and NGOs for their impact on deforestation and the disappearance of certain animal and plant species. Among these products is palm oil. Its production threatens the natural habitat of endangered species such as the Orangutan.
Initially banned in the manufacture of food products in some European countries, this ban has been extended to the production of biofuels. Thus, the European Union has set itself the objective of removing palm oil from the list of authorized Biofuels by 2030. Some countries of the Union, such as France, have already removed the oil palm at the local level.
Indonesia and Malaysia interpret this decision by European countries as disguised protectionism. These two countries are the primary producers of palm oil. In retaliation, Indonesia does not rule out raising the import tariffs on skim milk powder from 8% to 18%. Malaysia, for its part, opted for a more diplomatic response by choosing to appeal to the World Trade Organization. But it also keeps a means of pressure. Indeed, the Malaysian Government, through its Prime Minister, has evoked very explicitly, the questioning of an armament contract concluded with European companies for the renewal of its fleet of fighter planes.
The next few months will be decisive for palm oil because if the EU project goes to the end, millions of euros will be lost by producer countries, and reprisals could be detrimental for European consumers of products manufactured in Malaysia and Indonesia.
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