Palm oil biofuel curbs from EU met with objection by Indonesian and Malaysian leaders
The leaders of Malaysia and Indonesia have signed a joint letter to object to the European Union’s plans to phase out the use of palm oil in renewable fuel.
The leaders of Malaysia and Indonesia have signed a joint letter to object to the European Union’s (EU) plans to phase out the use of palm oil in renewable fuel. This is as Malaysian palm oil futures surged to the highest in six weeks on Friday evening, on the hopes of reduced stockpiles and improved exports.
The letter to the EU which was signed by Indonesian president Joko Widodo and Malaysian prime minister Mahatir Mohamad, was sent over the weekend, said Luhut Pandjaitan, coordinating minister for maritime affairs who looks at natural resources issues in a Reuters article.
According to a statement from Malaysia’s Ministry of Primary Industries, officials from Malaysia and Indonesia will visit Brussels this week to object to the EU act that restricts the use of the edible oil in biofuel.
EU’s removal of palm oil as a green fuel sparks ire
In March, the European Commission decided that palm oil cultivation leads to excessive deforestation. The bloc had announced plans to increase its use of renewable energy sources by 2030 and said it will, when considering a renewable product, take into account its impact on deforestation.
Both Malaysia and Indonesia supply a combined 85% of the world’s palm oil.
Indonesia has previously voiced its displeasure with the EU’s decision to not consider palm oil as a green fuel and has said that it would file a World Trade Organization complaint against the bloc over the palm oil issue.
The country has also threatened to quit the Paris climate agreement – a pact which brings all nations together to combat climate change and adapt to its effects - due to this incident.
Palm oil futures hit six-week high
On Friday evening, Malaysian palm oil futures surged to their highest in six weeks, marking the fifth consecutive session of gains, as traders bank on dwindling stockpiles and improved exports.
The price of Malaysian palm oil futures has been registering steady gains since the start of this month. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.1 percent at RM$2,206 a tonne on Friday, compared to March 29, when it was trading at RM$2,120 a tonne.
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