Malaysia is set to take legal action at the global trade watchdog against the European Union and member states France and Lithuania for restricting palm oil-based biofuels in an ongoing row about access to markets.
The world’s second largest palm oil producer behind Indonesia, which has called a EU renewable-energy directive “discriminatory action”, is seeking consultations under the World Trade Organisation’s dispute settlement mechanism.
Minister Mohd Khairuddin Aman Razali said the EU proceeded with implementing the directive without considering Malaysia’s commitment and views, even after Malaysia gave feedback and sent economic and technical missions to Europe.
The EU directive “will mean the use of palm oil as biofuel in the EU cannot be taken into account in the calculation of renewable energy targets and in turn create undue trade restrictions to the country’s palm oil industry”, he said in the statement.
The ministry filed the WTO request with cooperation from the Attorney General’s Chambers and the International Trade and Industry Ministry, taking action it had warned of in July against EU Renewable Energy Directive II.
Malaysia will act as a third party in a separate WTO case lodged by neighbouring Indonesia as a sign of solidarity and support.
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