Should the EU Benchmark Malaysia as Low Risk under the EUDR?
Malaysia has asked the EU to give its commodities exports to the EU a favorable rating as Low Risk under the EUDR
40 organisations call on the EU to ensure robust benchmarking under deforestation law
The European Commission (EC) has been urged to recognise the Malaysian Sustainable Palm Oil (MSPO) certification in order to promote greater acceptance of the European Union Deforestation Regulation (EUDR).
"Malaysian Palm Oil Council (MPOC) chief executive officer Belvinder Kaur Sron said the MSPO certification effectively prohibited deforestation for palm oil production post-2019, and studies also show a high degree of convergence between the certification and EUDR standards.
Recognising convergent national certification schemes (such as MSPO) as EUDR-compliant would streamline compliance obligations for producers, remove unnecessary duplication, and reduce due diligence obligations for buyers to the minimum,” The Edge
In driving home her point of a convergence between the EU’s Deforestation Regulations and the MSPO, Malaysian Palm Oil Council chief executive officer Belvinder Kaur Sron quoted data from international organizations including the United Nations Food and Agriculture Organization and the World Resources Institute which have reported significant declines in Malaysia’s forest loss.
Malaysia’s low rate of deforestation is only one set of data which should qualify Malaysia as “Low Risk” as the EU Commission benchmarks countries.
What is benchmarking and why is it so important to Malaysia that the EU benchmarks Malaysia as “Low Risk” for deforestation?
Getting a “Low Risk” rating by the EU will cut some administrative costs in Malaysian exports to the EU which includes timber, rubber, cocoa and of course palm oil. More important to Malaysia will the EU’s stamp of approval for Malaysia’s initiatives in producing all its export commodities sustainably.
But will Malaysia’s certification of export commodities meet the approval of European producers, European countries and civil society organizations?
A useful exercise to tick the boxes for Malaysia is this demand by forty organisations including Earthsight in a letter to the EU.
In summary, we urge the Commission to ensure that the benchmarking methodology:
The recent easing of rules under the EUDR has reportedly been met with some relief by the Director General of the Malaysian Palm Oil Board, Dr. Ahmad Parveez who noted that:
“However, it is important to emphasise that the core obligations and requirements outlined in the main text of the EUDR remain unchanged.
Malaysian exporters to the EU will still need to comply with the EUDR. Malaysian exporters are still required to meet stringent compliance requirements, including detailed geolocation data and proof of deforestation-free sourcing.
Therefore, the industry continues to advocate greater recognition of national sustainability certifications, such as the MSPO certification, and for transparent benchmarking criteria to ensure fair treatment under the EUDR,”
This level of commitment to sustainable production of commodities should inspire the forty organizations to suggest to the EU that national certifications like the MSPO should be the solution for commodity imports.
Quoting Earthsight’s disapproval of voluntary certifications the MSPO made a compelling argument in its comparisons of Green Labels vs National Certifications to stem deforestation.
Earthsight’s assessment of voluntary certifications was reiterated in its criticism of Better Cotton this year when Earthsight declared:
"Voluntary certification schemes heavily shaped by industry do not drive sustainability or legality in global supply chains. Governments in large consumer markets must legally require companies to conduct their own due diligence, mitigate risks and remedy any adverse impacts from their activities."
This argument against voluntary schemes is a bit shortsighted as it presumes governments in large consumers markets like the EU have absolute control over countries that export their products to the EU.
This is a fallacy that groups like Earthsight must abandon if a sustainable earth is their mission. In the complex global trade of commodities, it’s easy enough for producing countries to create a fit for Europe supply chain while exporting less than desirable products to less demanding markets.
National certifications like the MSPO and the overall commitment of producer nations to producing commodities sustainably is the only way forward. This is where the high standards of EU as influenced by organizations like Earthsight for imported commodities flows down from the EU to other markets like China and India.
There is however a problem with maintaining this momentum with the EU's green standards flowing down to price conscious markets in China and India. The problem is whether Malaysia can maintain its national standards on producing palm oil sustainably in a global market where it has to compete on price alone.
Malaysia is looking to correct this with the formation of the MSPO Impact Alliance, a new multi-stakeholder platform that aims to explore and test innovative models that enhance the value of certification.
"Through collaboration with non-governmental organisations, accreditation bodies, financiers, technology partners and multinational fast-moving consumer goods companies, the Alliance will enable MSPO to pilot ideas such as green financing for certified producers, digitised traceability solutions, deforestation monitoring tools and inclusive sourcing incentives for smallholders,"
The EU can add value to Malaysia's certification programs for export commodities by rating Malaysia as "Low Risk" as the EU benchmarks its trade partners.
It is this value that will help to support Malaysia’s move towards a green economy that deeply aligns with the aspirations of the EU according to the former EU Ambassador to Malaysia, Michalis Rokas.
The bigger beneficiary in the EU's acceptance of Malaysia's national certification programs and the country's commitment to no-deforestation would be the EU.
Decades of commitments and voluntary certifications by the private sector have produced poor results for no-deforestation supply chains. The latest data from Forest 500 as covered by Emma Thompson for Reuters had this to say.
"In 2021, almost every head of state in the world committed to halt and reverse deforestation by 2030 in the Glasgow Declaration on Forests. And the United Nations clearly stated that any credible net-zero commitment should include eliminating commodity-driven deforestation by 2025. We’ve reached that date and deforestation remains embedded in global economies through the trade of commodities such as beef, soy and palm oil. It’s a collective problem that requires a collective solution.
New data published today by Forest 500 – ranking the 500 companies with the most exposure to global deforestation risk – shows that only 16 companies took credible action to remove deforestation from their global supply chains in 2024. But a further 484 businesses with huge exposure to deforestation are doing far from enough to tackle deforestation.
These sobering findings come as politics shifts away from protecting forests. Rules designed to remove deforestation from global commodity supply chains, such as the EU Deforestation Regulation and the UK’s Forest Risk Commodities regulations, have been delayed as other priorities move up the agenda. Companies and their lobbyists are pushing back against legislation, arguing that it is unwieldy and expensive to implement and that it will hurt consumers by pushing up food prices."
Yes, it is 2025. Malaysia has met the United Nations requirements of country's commitments to net-zero deforestation. Food prices will remain affordable insofar as edible oils are concerned.
The only collective solution for the EU is to stop flogging the dead horse in corporate commitments and let producing countries meet the demands of the EU and the UK through national commitments to producing commodities sustainably.
Stay tuned in to this page as we await announcements from the EU on its decisions
Published April 2025 CSPO Watch
"Malaysian Palm Oil Council (MPOC) chief executive officer Belvinder Kaur Sron said the MSPO certification effectively prohibited deforestation for palm oil production post-2019, and studies also show a high degree of convergence between the certification and EUDR standards.
Recognising convergent national certification schemes (such as MSPO) as EUDR-compliant would streamline compliance obligations for producers, remove unnecessary duplication, and reduce due diligence obligations for buyers to the minimum,” The Edge
In driving home her point of a convergence between the EU’s Deforestation Regulations and the MSPO, Malaysian Palm Oil Council chief executive officer Belvinder Kaur Sron quoted data from international organizations including the United Nations Food and Agriculture Organization and the World Resources Institute which have reported significant declines in Malaysia’s forest loss.
Malaysia’s low rate of deforestation is only one set of data which should qualify Malaysia as “Low Risk” as the EU Commission benchmarks countries.
What is benchmarking and why is it so important to Malaysia that the EU benchmarks Malaysia as “Low Risk” for deforestation?
- Benchmarking is a strategic process used to measure a country’s performance against others
- It is supposed to help countries identify areas where they are excelling and where they need to improve.
- By analyzing and comparing data, countries can gain valuable insights into achieving the goals of the EUDR.
- Benchmarking encourages a culture of continuous improvement as data provided ensures decision-making is based on evidence and not assumptions.
Getting a “Low Risk” rating by the EU will cut some administrative costs in Malaysian exports to the EU which includes timber, rubber, cocoa and of course palm oil. More important to Malaysia will the EU’s stamp of approval for Malaysia’s initiatives in producing all its export commodities sustainably.
But will Malaysia’s certification of export commodities meet the approval of European producers, European countries and civil society organizations?
A useful exercise to tick the boxes for Malaysia is this demand by forty organisations including Earthsight in a letter to the EU.
In summary, we urge the Commission to ensure that the benchmarking methodology:
- Considers human rights violations and risks of illegality from the outset for all countries, consistently with Article 29(4)(c) and (d), including for countries with low deforestation or forest degradation rates;
- Does not use UN sanctions as the main or sole criteria to determine whether a country or parts thereof are high risk;
- Considers forest degradation alongside deforestation, which is consistent with the text of the regulation;
- Considers production trends for all commodities covered by the EUDR;
- Does not unduly characterise trade agreements as neutralising measurable risks of deforestation, illegality, and rights violations.
The recent easing of rules under the EUDR has reportedly been met with some relief by the Director General of the Malaysian Palm Oil Board, Dr. Ahmad Parveez who noted that:
“However, it is important to emphasise that the core obligations and requirements outlined in the main text of the EUDR remain unchanged.
Malaysian exporters to the EU will still need to comply with the EUDR. Malaysian exporters are still required to meet stringent compliance requirements, including detailed geolocation data and proof of deforestation-free sourcing.
Therefore, the industry continues to advocate greater recognition of national sustainability certifications, such as the MSPO certification, and for transparent benchmarking criteria to ensure fair treatment under the EUDR,”
This level of commitment to sustainable production of commodities should inspire the forty organizations to suggest to the EU that national certifications like the MSPO should be the solution for commodity imports.
Quoting Earthsight’s disapproval of voluntary certifications the MSPO made a compelling argument in its comparisons of Green Labels vs National Certifications to stem deforestation.
Earthsight’s assessment of voluntary certifications was reiterated in its criticism of Better Cotton this year when Earthsight declared:
"Voluntary certification schemes heavily shaped by industry do not drive sustainability or legality in global supply chains. Governments in large consumer markets must legally require companies to conduct their own due diligence, mitigate risks and remedy any adverse impacts from their activities."
This argument against voluntary schemes is a bit shortsighted as it presumes governments in large consumers markets like the EU have absolute control over countries that export their products to the EU.
This is a fallacy that groups like Earthsight must abandon if a sustainable earth is their mission. In the complex global trade of commodities, it’s easy enough for producing countries to create a fit for Europe supply chain while exporting less than desirable products to less demanding markets.
National certifications like the MSPO and the overall commitment of producer nations to producing commodities sustainably is the only way forward. This is where the high standards of EU as influenced by organizations like Earthsight for imported commodities flows down from the EU to other markets like China and India.
There is however a problem with maintaining this momentum with the EU's green standards flowing down to price conscious markets in China and India. The problem is whether Malaysia can maintain its national standards on producing palm oil sustainably in a global market where it has to compete on price alone.
Malaysia is looking to correct this with the formation of the MSPO Impact Alliance, a new multi-stakeholder platform that aims to explore and test innovative models that enhance the value of certification.
"Through collaboration with non-governmental organisations, accreditation bodies, financiers, technology partners and multinational fast-moving consumer goods companies, the Alliance will enable MSPO to pilot ideas such as green financing for certified producers, digitised traceability solutions, deforestation monitoring tools and inclusive sourcing incentives for smallholders,"
The EU can add value to Malaysia's certification programs for export commodities by rating Malaysia as "Low Risk" as the EU benchmarks its trade partners.
It is this value that will help to support Malaysia’s move towards a green economy that deeply aligns with the aspirations of the EU according to the former EU Ambassador to Malaysia, Michalis Rokas.
The bigger beneficiary in the EU's acceptance of Malaysia's national certification programs and the country's commitment to no-deforestation would be the EU.
Decades of commitments and voluntary certifications by the private sector have produced poor results for no-deforestation supply chains. The latest data from Forest 500 as covered by Emma Thompson for Reuters had this to say.
"In 2021, almost every head of state in the world committed to halt and reverse deforestation by 2030 in the Glasgow Declaration on Forests. And the United Nations clearly stated that any credible net-zero commitment should include eliminating commodity-driven deforestation by 2025. We’ve reached that date and deforestation remains embedded in global economies through the trade of commodities such as beef, soy and palm oil. It’s a collective problem that requires a collective solution.
New data published today by Forest 500 – ranking the 500 companies with the most exposure to global deforestation risk – shows that only 16 companies took credible action to remove deforestation from their global supply chains in 2024. But a further 484 businesses with huge exposure to deforestation are doing far from enough to tackle deforestation.
These sobering findings come as politics shifts away from protecting forests. Rules designed to remove deforestation from global commodity supply chains, such as the EU Deforestation Regulation and the UK’s Forest Risk Commodities regulations, have been delayed as other priorities move up the agenda. Companies and their lobbyists are pushing back against legislation, arguing that it is unwieldy and expensive to implement and that it will hurt consumers by pushing up food prices."
Yes, it is 2025. Malaysia has met the United Nations requirements of country's commitments to net-zero deforestation. Food prices will remain affordable insofar as edible oils are concerned.
The only collective solution for the EU is to stop flogging the dead horse in corporate commitments and let producing countries meet the demands of the EU and the UK through national commitments to producing commodities sustainably.
Stay tuned in to this page as we await announcements from the EU on its decisions
Published April 2025 CSPO Watch