Malaysian Palm Oil Council seeks low-risk status from EU amid delay in landmark anti-deforestation law

The Malaysian Palm Oil Council (MPOC) is seeking low-risk status from the European Union (EU) following a delay in the implementation of its landmark anti-deforestation law.

For now, Malaysian exporters will continue to comply fully with the EU Deforestation Regulation and provide due diligence statement to buyers in the bloc as required under the legislation now postponed by 12 months, the council said in a statement.

The council also calls on the EU “to ensure that smallholder farmers are not excluded from international supply chains as a result of disproportionate compliance requirements”, said MPOC chief executive officer Belvinder Kaur Sron.

The EU pushed the application deadline amid operational and technical challenges. The new timeline now falls on Dec 30, 2026 for large operators and traders, while micro and small enterprises will have until June 30, 2027 to comply.

The law, also known as the EUDR, bans the import, export, and trade within the bloc of certain commodities and products linked to deforestation or forest degradation after Dec 31, 2020. The goal was said to ensure EU consumption does not contribute to global forest loss, a major driver of climate change and biodiversity loss.

The regulation has faced resistance from major supplier countries including Malaysia, the world’s top producer after Indonesia, as well as some EU member states over high compliance costs and potential supply chain disruptions.

Still, Malaysia is among the most prepared producing countries for EUDR compliance, having made significant progress in traceability through a national traceability system, Belvinder said.

The platform integrates e-MSPO, GeoSawit and SIMS, consolidating certification data, geolocation coordinates and verified transactions into a unified system that allows EUDR-relevant information to be centrally accessed and shared with EU partners.

Belvinder added that the country’s own mandatory Malaysian Sustainable Palm Oil (MSPO) certification provides a nationally enforced assurance framework that can help simplify compliance for EU buyers, while reducing administrative burdens across the supply chain.

In 2024, Malaysia’s palm oil industry generated RM109 billion in export earnings, accounting for 24% of global palm oil production and 32% of global exports.