In the complaint, dated January 15, Malaysia charges that the EU, particularly its member states such as France and Lithuania, had imposed restrictive measures on the use of palm oil that violate international trade agreements.
Malaysia holds that the bloc and its members confer unfair benefits to EU domestic producers of certain biofuel feedstocks such as rapeseed oil and soy, and the biofuels produced therefrom at the expense of palm oil and oil palm crop-based biofuels from Malaysia.
The EU has embarked on a major plan committing its members to build a carbon neutral economy by 2050, including by promoting the use of biofuels. However, it has deemed that palm oil production is not sustainable and palm oil-based biofuels cannot be counted towards EU renewable targets.
Malaysia, the world’s second largest producer of palm oil, baulked at EU efforts to phase out the use of palm oil as a biofuel, and has requested consultations to help resolve the dispute.