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Malaysia and Indonesia vs. the EU in a Battle Over Palm Oil Biofuels
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Malaysia and Indonesia vs. the EU in a Battle Over Palm Oil Biofuels


Tensions are rising between Malaysia and the European Union (EU) over what is becoming the increasingly thorny issue of palm oil. This time, however, it’s not about the palm oil used for hazelnut chocolate spreads, breakfast cereals, or baked goods, but rather palm oil-based biofuel. In January, Malaysia announced that it will be taking legal action against the EU, specifically against member states France and Lithuania, for restricting palm oil-based biofuels. The Southeast Asian nation is the world’s second-largest producer of palm oils and was thus hurt by the union’s refusal to recognize palm oil-based biodiesel as a renewable fuel. The EU, however, plans to phase out its use by 2030.

Malaysia has called the EU renewable-energy directive “discriminatory action” and is seeking consultations under the WTO’s Dispute Settlement Mechanism to resolve the issue. On February 6th, Indonesia joined the fray when President Joko Widodo announced, “Indonesia will continue to fight against palm oil discrimination.” Together, the two nations produce a whopping 85% of the world’s palm oil.

The trouble with palm oil is, primarily, its link with massive deforestation. Largely due to palm oil plantations, Indonesia has the highest rate of deforestation in the world. This threatens countless species, including Sumatran tigers, pygmy elephants, Asian rhinoceros, Malayan tapirs, and many more. Moreover, roughly 50 orangutans are killed every week because of deforestation. But it’s not just animals that suffer. Approximately 110,000 people die every year from toxic air pollution resulting from fires intentionally set to clear rainforests, and child labor is also common in the Malaysian and Indonesian palm oil industries.


These are all massive problems, but very few of them are problems inherent with palm oil and rather the methods currently used to cultivate it. According to the World Wildlife Fund, there are approximately 20 million hectares of abandoned land available to grow palm oil trees, but it’s easier for palm oil farmers to simply burn down the existing rainforests while timber companies prefer to clear-cut rainforests first to sell the lumber.

While the EU is justified in its suggestion that palm oil farming should be discouraged, developing nations such as Malaysia and Indonesia also have a right to grow their economies as much as possible. However, these countries must be able to generate revenue by maintaining rainforest, not by extracting resources from it, to avoid climate catastrophe.

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