Indonesia, Malaysia laud proposed one-year delay to EU anti-deforestation law

More time needed to be ready for complex regulations, say top palm oil producers

- Linda Yulisman

Indonesia and Malaysia, the world's top palm oil producers, have welcomed the move by the European Union to delay the implementation of its anti-deforestation regulation by a year, even as climate activists deemed it a setback in environmental protection.

Adopted in 2023, the EU Deforestation Regulation (EUDR) has been lauded as a key milestone to address climate change by requiring exporters of agricultural commodities, including palm oil, and their derivative items to prove they are not produced on deforested land. The regulation was to start on Dec 30, 2024.

The proposed one-year extension will give producers and other industry players more time to comply with the bloc's complex requirements. The proposal would need the approval of the European Parliament and member states, the European Commission said on Oct 2.

The new EU policy covers seven key commodities: palm oil, soya, beef, wood, cocoa, coffee and rubber, along with products made from them if derived from recently deforested land anywhere in the world.

The issues affecting palm oil will be closely watched globally as the product is, by far, the most consumed and traded edible oil in the world. It is used as cooking oil in many South-east Asian households, and can be found in nearly everything from biscuits and ice cream to lipstick and shampoo. The EU itself uses palm oil primarily for biodiesel production.

Indonesia is the biggest producer of palm oil in the world, followed by Malaysia, with the two countries accounting for about 85 per cent of the world's exports. The global palm oil trade is valued at US$63 billion (S$82 billion) to US$70 billion annually, according to data from market research firms.