Palm Oil Wins in EUDR Benchmarking
-Malaysian officials express disappointment with EU’s continued roll backs on sustainability requirements
-EU benchmarking of palm oil producing countries seen as scorn for national efforts to produce palm oil sustainably
Palm oil producing countries Indonesia and Malaysia which have argued against the EU’s benchmarking of countries for EU imports have won the arguments for now with a Standard Risk benchmark which is expected to raise the ire of Malaysia.
“The deforestation benchmarking, almost two years in the making, has previously stirred diplomatic unease – especially among major exporters like Brazil, Malaysia and Indonesia, who lobbied hard to stay off the list. For now, they’re off the hook.” Euractiv
-EU benchmarking of palm oil producing countries seen as scorn for national efforts to produce palm oil sustainably
Palm oil producing countries Indonesia and Malaysia which have argued against the EU’s benchmarking of countries for EU imports have won the arguments for now with a Standard Risk benchmark which is expected to raise the ire of Malaysia.
“The deforestation benchmarking, almost two years in the making, has previously stirred diplomatic unease – especially among major exporters like Brazil, Malaysia and Indonesia, who lobbied hard to stay off the list. For now, they’re off the hook.” Euractiv
Staying “off the hook” was a low bar for Malaysia which has deforestation data to support the sustainability of its agricultural products which provoked a response from the Malaysian Palm Oil Council.
In her latest challenge to the EU, the Chief Executive Officer of Malaysian Palm Oil Council, Belvinder Sron, expressed disappointment and concern for the EU’s decision. In a media statement, she asked:
"Where the Commission chooses to draw the line between the risk categories is likely to be influenced by the EU's wider trade relationships with third countries and the record of its own member states on deforestation.
These factors could also play well for Malaysia. Negotiations on an EU-Malaysia free trade agreement are poised to restart (now a priority for the EU in an era of soaring global tariffs); and recent Food and Agriculture Organization data points to potentially higher levels of primary forest lost in certain EU member states than in Malaysia.
Is it feasible that Malaysia could be given a worse classification if all EU member states are deemed to be "low-risk"?"
Her challenge to the EU comes on the heel of the EU’s continuing roll back of green demands which Politico says risks hurting the planet.
Insiders from the Malaysian Palm Oil Council have shared a similar view with CSPO Watch in expressing disappointment with the EU’s green roll backs.
“The EUDR in its original format could have set the direction for trade in sustainable goods. This is what Malaysia worked towards in ramping up its national standards for palm oil production.
Getting off the hook as described by Eurativ is seen as a bitter pill to swallow for Malaysia considering how countries like the US or EU member states with higher deforestation rates are also “off the hook.”
All Dressed Up and Nowhere To Go?
In terms of the EUDR, it appears that Malaysia got all dressed up only to find out that the EU canceled the party.
This does not have to be the case as Malaysia prepares a party of its own to support biofuels from palm wastes. This is a party which the EU should attend as it fails its other green grand ambition to lower emissions from transport. The problems and solutions are complex as Edgar Ahn, Chief Innovation Officer for BDI-BioEnergy International explains.
"The transport sector in the EU27 countries, which is responsible for a third of all GHG emissions, is the only sector in which no reduction in emissions has been achieved since 1991. On the contrary, emissions are still rising sharply."
While the future of biodiesel in the EU remains uncertain, it looks even worse as the EU’s continued use of rapeseed as biofuel is a threat to food security in the EU and biodiversity in Australia, a top source of rapeseed imports for the EU.
Australia is known as a global leader in deforestation, This may explain Malaysia’s disappointment with the EU’s benchmarking decision which put Malaysia in the same holding cell as Australia despite Malaysia’s proof of innocence.
As for food security, the use of first generation biofuels from food sources by the EU is a blunder according to Oxfam which criticized the EU in Two Decades of EU Policies Driving Food Insecurity.
Since the EU has abandoned the opportunity to drive global trade in sustainably produced goods under the EUDR, Malaysia should focus its green credentials on developing a new source of revenue to support the sustainability of its palm oil industry.
All Dressed Up and Somewhere To Go?
What Oxfam is demanding of the EU’s policies on biofuels is exactly what Joseph Glauber and Charlotte Hebebrand recommended in their report for IFPRI.
"Finally, an important avenue out of the food vs. fuel predicament may be the development of waste products and crop residues as potential feedstocks for biofuels. Such feedstocks would promote GHG reduction, reduce waste, create jobs and create a new source of income for farmers and other producers, without competing for food use. Used cooking oil, for example, is already an important feedstock for biofuel production. However, while conversion for many such feedstocks is technically feasible, they remain costly relative to food crops. More research should be aimed at increasing commercialization of wastes and crop residues."
The argument here is compelling. If Dorset Council in the UK can meet its target of a 40% reduction in 2025 with HVO with an achievable goal of net zero carbon emissions by 2035, imagine what palm-based HVO or SAF can do to reduce transport emissions globally?
Towards that end, Malaysia is committing more national budget to grow its biofuels industry from palm wastes instead of first generation feedstock as it looks to establish itself as a source of sustainable transport biofuels from palm wastes.
According to Biofuels International:
"Southeast Asia accounts for nearly 8% of global jet fuel demand and thus plays a crucial role in contributing to the global sustainable aviation fuel (SAF) supply, which is essential for achieving global aviation decarbonisation goals…Developing local feedstock and SAF production in Southeast Asia will stimulate the regional economy and have significant positive environmental and social impacts, provided sustainability is prioritised"
Having prioritised sustainability, the country’s continued investments into growing revenues from palm based biofuels without expanding its footprint on forests has encouraged numerous investments from the private sector.
- The MoU between Japan’s Sumitomo Corporation and Malaysia’s reNIKOLA for the joint development of biogas and biomethane projects in Malaysia and Indonesia is the most recent example of investments to create green energy from palm oil wastes.
- Joint ventures like the one between PETRONAS, Enilive and Euglena will produce sustainable aviation fuel (SAF) and other biofuels such as renewable diesel/ hydrogenated vegetable oil (HVO) to cater to the growing demands of the global aviation and transportation industries by tapping each partner’s expertise. Biodiesel Magazine
- The joint venture between BAC Renewable Energy (BAC RE), along with Singapore’s Dovechem Group and Tanjung Langsat Port Terminal (TLP Terminal) is expected to attract $337 million in green investments. Recessary
These investments are private votes of confidence by investors in Malaysia’s capability to produce biofuels sustainably with none of the EU drama on certified biofuels. There is no certification drama in Malaysia, only places and companies like Gas Malaysia which would be more than happy to show anyone where they get their feedstocks from.
The EU can invite itself to Malaysia’s party next month by picking up BCX’s first Malaysian tech-based carbon credits offered by Bursa Malaysia. This is a milestone moment in fighting emissions which avoids releasing emissions rather than trying to recapture released carbon with forests.
This is a perfect fit for the EU’s consideration of emissions removal credits where reduced emissions avoidance credits powers Malaysia’s power grid and benefits the EU’s own power plants and factories which have so far relied on the failed carbon market. As for traceability, it does not get more transparent than knowing the credits are generated by the Cenergi Langkap biogas plant in Perak, Malaysia.
There is no question that the EU was a major force in influencing Malaysian policies on sustainable palm oil production. The big question now is whether the EU will acknowledge its own policy failures and work with Malaysia to find sustainable solutions on food and biofuels that benefits both sides.
The EU's decision to benchmark Malaysia as Standard Risk under the EUDR will no doubt be seen as contempt for Malaysia's efforts towards sustainable agri-products.
With the Malaysia EU free trade negotiations being revived in Brussels next month, the minimum expectations from Malaysia is that the EU will extend Malaysia a common courtesy in benchmarking Malaysia as Low Risk under the EU’s Deforestation Regulations.
Published May 22, 2025 CSPO Watch
In her latest challenge to the EU, the Chief Executive Officer of Malaysian Palm Oil Council, Belvinder Sron, expressed disappointment and concern for the EU’s decision. In a media statement, she asked:
"Where the Commission chooses to draw the line between the risk categories is likely to be influenced by the EU's wider trade relationships with third countries and the record of its own member states on deforestation.
These factors could also play well for Malaysia. Negotiations on an EU-Malaysia free trade agreement are poised to restart (now a priority for the EU in an era of soaring global tariffs); and recent Food and Agriculture Organization data points to potentially higher levels of primary forest lost in certain EU member states than in Malaysia.
Is it feasible that Malaysia could be given a worse classification if all EU member states are deemed to be "low-risk"?"
Her challenge to the EU comes on the heel of the EU’s continuing roll back of green demands which Politico says risks hurting the planet.
Insiders from the Malaysian Palm Oil Council have shared a similar view with CSPO Watch in expressing disappointment with the EU’s green roll backs.
“The EUDR in its original format could have set the direction for trade in sustainable goods. This is what Malaysia worked towards in ramping up its national standards for palm oil production.
Getting off the hook as described by Eurativ is seen as a bitter pill to swallow for Malaysia considering how countries like the US or EU member states with higher deforestation rates are also “off the hook.”
All Dressed Up and Nowhere To Go?
In terms of the EUDR, it appears that Malaysia got all dressed up only to find out that the EU canceled the party.
This does not have to be the case as Malaysia prepares a party of its own to support biofuels from palm wastes. This is a party which the EU should attend as it fails its other green grand ambition to lower emissions from transport. The problems and solutions are complex as Edgar Ahn, Chief Innovation Officer for BDI-BioEnergy International explains.
"The transport sector in the EU27 countries, which is responsible for a third of all GHG emissions, is the only sector in which no reduction in emissions has been achieved since 1991. On the contrary, emissions are still rising sharply."
While the future of biodiesel in the EU remains uncertain, it looks even worse as the EU’s continued use of rapeseed as biofuel is a threat to food security in the EU and biodiversity in Australia, a top source of rapeseed imports for the EU.
Australia is known as a global leader in deforestation, This may explain Malaysia’s disappointment with the EU’s benchmarking decision which put Malaysia in the same holding cell as Australia despite Malaysia’s proof of innocence.
As for food security, the use of first generation biofuels from food sources by the EU is a blunder according to Oxfam which criticized the EU in Two Decades of EU Policies Driving Food Insecurity.
Since the EU has abandoned the opportunity to drive global trade in sustainably produced goods under the EUDR, Malaysia should focus its green credentials on developing a new source of revenue to support the sustainability of its palm oil industry.
All Dressed Up and Somewhere To Go?
What Oxfam is demanding of the EU’s policies on biofuels is exactly what Joseph Glauber and Charlotte Hebebrand recommended in their report for IFPRI.
"Finally, an important avenue out of the food vs. fuel predicament may be the development of waste products and crop residues as potential feedstocks for biofuels. Such feedstocks would promote GHG reduction, reduce waste, create jobs and create a new source of income for farmers and other producers, without competing for food use. Used cooking oil, for example, is already an important feedstock for biofuel production. However, while conversion for many such feedstocks is technically feasible, they remain costly relative to food crops. More research should be aimed at increasing commercialization of wastes and crop residues."
The argument here is compelling. If Dorset Council in the UK can meet its target of a 40% reduction in 2025 with HVO with an achievable goal of net zero carbon emissions by 2035, imagine what palm-based HVO or SAF can do to reduce transport emissions globally?
Towards that end, Malaysia is committing more national budget to grow its biofuels industry from palm wastes instead of first generation feedstock as it looks to establish itself as a source of sustainable transport biofuels from palm wastes.
According to Biofuels International:
"Southeast Asia accounts for nearly 8% of global jet fuel demand and thus plays a crucial role in contributing to the global sustainable aviation fuel (SAF) supply, which is essential for achieving global aviation decarbonisation goals…Developing local feedstock and SAF production in Southeast Asia will stimulate the regional economy and have significant positive environmental and social impacts, provided sustainability is prioritised"
Having prioritised sustainability, the country’s continued investments into growing revenues from palm based biofuels without expanding its footprint on forests has encouraged numerous investments from the private sector.
- The MoU between Japan’s Sumitomo Corporation and Malaysia’s reNIKOLA for the joint development of biogas and biomethane projects in Malaysia and Indonesia is the most recent example of investments to create green energy from palm oil wastes.
- Joint ventures like the one between PETRONAS, Enilive and Euglena will produce sustainable aviation fuel (SAF) and other biofuels such as renewable diesel/ hydrogenated vegetable oil (HVO) to cater to the growing demands of the global aviation and transportation industries by tapping each partner’s expertise. Biodiesel Magazine
- The joint venture between BAC Renewable Energy (BAC RE), along with Singapore’s Dovechem Group and Tanjung Langsat Port Terminal (TLP Terminal) is expected to attract $337 million in green investments. Recessary
These investments are private votes of confidence by investors in Malaysia’s capability to produce biofuels sustainably with none of the EU drama on certified biofuels. There is no certification drama in Malaysia, only places and companies like Gas Malaysia which would be more than happy to show anyone where they get their feedstocks from.
The EU can invite itself to Malaysia’s party next month by picking up BCX’s first Malaysian tech-based carbon credits offered by Bursa Malaysia. This is a milestone moment in fighting emissions which avoids releasing emissions rather than trying to recapture released carbon with forests.
This is a perfect fit for the EU’s consideration of emissions removal credits where reduced emissions avoidance credits powers Malaysia’s power grid and benefits the EU’s own power plants and factories which have so far relied on the failed carbon market. As for traceability, it does not get more transparent than knowing the credits are generated by the Cenergi Langkap biogas plant in Perak, Malaysia.
There is no question that the EU was a major force in influencing Malaysian policies on sustainable palm oil production. The big question now is whether the EU will acknowledge its own policy failures and work with Malaysia to find sustainable solutions on food and biofuels that benefits both sides.
The EU's decision to benchmark Malaysia as Standard Risk under the EUDR will no doubt be seen as contempt for Malaysia's efforts towards sustainable agri-products.
With the Malaysia EU free trade negotiations being revived in Brussels next month, the minimum expectations from Malaysia is that the EU will extend Malaysia a common courtesy in benchmarking Malaysia as Low Risk under the EU’s Deforestation Regulations.
Published May 22, 2025 CSPO Watch