MPOC: Delay in implementing EUDR deforestation regulation a boon to Malaysian smallholders

 

THE Malaysian Palm Oil Council (MPOC) has commended the European Commission’s (EC) decision to delay the implementation of the EU Deforestation Regulation (EUDR) by 12 months until Dec 30, 2025.

MPOC’s CEO Belvinder Kaur Sron described the postponement as a sensible and much-needed step which provided relief for businesses that require additional time to prepare for compliance with the complex regulatory demands of the EUDR.

“The EC’s announcement that EUDR implementation will be delayed until Dec 30, 2025 is the right decision. This is a victory for common sense and a welcome relief for all of those businesses which highlighted the need for a delay,” she commented in a statement.

“Malaysian palm oil exporters can comply with EUDR: this is not in doubt. Malaysia’s commitment to zero deforestation is written in law.

Belvinder Kaur Sron

“The MSPO standard is the world’s leading mandatory palm oil certification scheme. Malaysia is ready to supply EUDR-compliant, sustainable and traceable palm oil to our European customers.”

According to Belvinder, the additional time should be used to address key concerns, including a genuine exemption for smallholders to prevent their exclusion from international supply chains.

Moreover, there is also a need for the creation of transparent benchmarking criteria to categorise sustainably produced commodities like Malaysian palm oil as “low-risk” and acceptance of the MSPO certification as a recognised compliance tool for the EUDR.

“These improvements would facilitate market access for Malaysia’s zero-deforestation palm oil,” she stressed.

The EUDR which is aimed at regulating commodities linked to deforestation requires complex geolocation data, ‘polygon’ mapping and due diligence statements from exporters.

The administrative burden imposed by the regulation is significant, particularly for small farmers who may struggle to meet these new requirements.

Industry estimates suggest that compliance could cost the palm oil sector US$650 mil (RM2.78 bil) annually with US$260 mil (RM1.1 bil) of that burden falling directly on smallholders.

Above all else, Malaysia’s MSPO standard already guarantees compliance with zero-deforestation and sustainability goals while also supporting smallholder farmers.

Therefore, recognising MSPO certification within the EUDR framework would allow the EU to achieve its environmental objectives without placing an undue burden on producers.

Malaysia has led the charge.in the global movement to delay the EUDR which gained traction throughout 2023 and 2024.

Prime Minister Datuk Seri Anwar Ibrahim had publicly criticised the regulation’s potential for causing supply chain disruptions and vowed to fight discrimination against palm oil via ongoing discussions with the EU.

Malaysia was joined by 16 other nations from Asia, Latin America and Africa in expressing concerns about the EUDR while German Chancellor Olaf Scholz and the Biden Administration both supported calls for a delay.

Within Europe, 20 of the EU’s 27 Agriculture Ministers also backed the postponement alongside key voices such as Peter Liese MEP and NGO FairTrade which expressed worries about the impact on producer organisations. – Focus Malaysia