The European Union and its member states France and Lithuania had previously imposed restrictions on palm oil based biofuels from Malaysia and the Malaysian government will be initiating legal action against these parties at the global trade watchdog – the World Trade Organization (WTO), said the government of the country.
Malaysia is the second biggest producer of pam oil. The Plantation Industries and Commodities Ministry of the country said in a statement on Friday that the government called the directive of the EU under its renewable energy policy as being a “discriminatory action”. The country is now trying to hold consultations under the World Trade Organization’s Dispute Settlement Mechanism.
The EU had not taken into consideration the commitment and views of Malaysia prior to going ahead with the implementation of the directive even through adequate feed back was provided by the country to the EU and had sent economic and technical missions to Europe, said the country’s minister Mohd Khairuddin Aman Razali.
Razali said in the statement that under the new directive, government agencies, individuals and companies operating within the EU would not be able to account the use of palm oil as biofuel as being a renewable source of energy and cannot be used to calculate renewable energy targets. He said that this predicament in turn has created undue trade restrictions to the huge palm oil industry of Malaysia.
The ministry filed the WTO request with cooperation from the Attorney General’s Chambers and the International Trade and Industry Ministry. It had warned of taking up of such an action in July against EU Renewable Energy Directive II that had been issued by the EU prior to that.
In a separate but very similar case lodged by neighboring Indonesia at the global trade arbitrator, the role of Malaysia will be that of a third party. Indonesia is the biggest palm oil producer of the world. This participation of Malaysia as a third party is a mark of solidarity and support of the country to the cause of Indonesia, the ministry said in a statement.
(Adapted from CNBC.com)