EUDR delay provides relief for businesses says MPOC

KUALA LUMPUR, 7 October 2024 – The Malaysian Palm Oil Council (MPOC) has commended the European Commission’s decision to delay the implementation of the EU
Deforestation Regulation (EUDR) until 30th December 2025. MPOC’s Chief Executive Officer,

Belvinder Sron, described the postponement as a sensible and much-needed step, providing
relief for businesses that require additional time to prepare for compliance with the complex
regulatory demands of the EUDR.

Sron emphasised: “The EU Commission’s announcement that EUDR implementation will be
delayed until 30th December 2025 is the right decision. This is a victory for common sense
and a welcome relief for all of those businesses who highlighted the need for a delay.

“Malaysian palm oil exporters can comply with EUDR: this is not in doubt. Malaysia’s commitment to zero deforestation is written in law. 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. This delay is a sensible decision to ensure that supply chains worldwide have the time to prepare the technical and bureaucratic processes demanded by EUDR.”

EUDR DELAYED

The decision to delay implementation allows global supply chains to adjust to the technical and administrative requirements of the EUDR without risking trade disruptions, particularly for smallholder farmers. Malaysia had been a vocal advocate for this postponement, consistently warning that the original 2024 deadline was unfeasible, given the readiness of EU systems.

This position was supported by a broad coalition of governments, industries, and experts
worldwide, all concerned about the potential negative impact on smaller producers and the
palm oil industry.

According to Sron, the additional time should be used to address key concerns, including a genuine exemption for smallholders to prevent their exclusion from international supply chains,
the creation of transparent benchmarking criteria to categorize sustainably produced commodities like Malaysian palm oil as ‘low-risk,’ and the acceptance of MSPO certification as a recognized compliance tool for the EUDR. These improvements, she said, would facilitate market access for Malaysia’s zero-deforestation palm oil.

Regulating commodities

The EUDR, 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 $650 million annually, with $260 million of that burden falling directly on smallholders.

Malaysia’s MSPO standard already guarantees compliance with zero-deforestation and sustainability goals while also supporting smallholder farmers. Recognizing MSPO certification within the EUDR framework would allow the EU to achieve its environmental
objectives without placing an undue burden on producers.

The global movement to delay the EUDR gained traction throughout 2023 and 2024, with Malaysia leading the charge. Malaysian Prime Minister Anwar Ibrahim publicly criticized the regulation’s potential for causing supply chain disruptions and vowed to fight discrimination against palm oil in ongoing discussions with the EU.

Malaysia was joined by sixteen other nations from Asia, Latin America, and Africa in expressing concerns about the EUDR, while
the 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, who expressed worries about the impact on producer organisations.

MPOC committed

The MPOC remains committed to continuing its collaboration with the EU and other global
stakeholders to ensure that the eventual implementation of the EUDR is both fair and practical,
recognizing Malaysia’s sustainable palm oil practices and supporting trade.

For more information on MPOC and Malaysian palm oil, visit www.mpoc.org.my

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