Issues and Strategies in Reconciling the Malaysia-EU Palm Oil Discord

The EU has decided to phase out imports of palm oil used in biofuels in the EU by 2030. This affects people in Malaysia who rely on the palm oil business for their livelihood. This chapter examines the events leading up to the EU's anti-palm oil actions and the many ways in which Malaysia has responded to defend its palm oil sector. This includes 1) countering EU's allegation through scientific research, 2) demonstrating its commitment to transform the palm oil industry toward sustainability through certification standards, 3) fostering the commitment to grow palm oil sustainably, 4) garnering support from ASEAN and the international community, 5) expressing its opposition and warnings for retaliatory measures against the EU, and 6) requesting consultation under the WTO dispute settlement mechanism. It presents the political processes that generate policy interventions aimed at defending palm oil trade with the EU alerting that economic decoupling and direct conflict may exacerbate the problem, weaken bilateral relations, and elude good improvements in the palm oil business.