KUALA LUMPUR (Oct 8): The country benchmarking under the European Union Deforestation Regulation (EUDR) should be reviewed to ensure it is fair and transparent, according to Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.
While the delay in the EUDR implementation would give palm oil producer countries time to take the necessary steps to comply with the regulations, the regulator should ensure palm oil-producing countries are not unfairly labelled as "high risk" under its country benchmarking, said Johari.
“In the spirit of trade fairness, we hope that the European Parliament will play a more accommodative role to address this matter for the benefit of the world,” he said.
It is understood country benchmarking under the EUDR is a risk assessment framework that categorises countries into three groups — low-risk, standard-risk and high-risk — based on their deforestation and forest degradation levels, alongside governance factors such as law enforcement and adherence to international standards.
At a press conference on Tuesday, Johari reaffirmed that Malaysia is ready to comply with the EUDR, noting that 73% of the country’s palm oil industry is managed by large companies and estates, which are well positioned to meet the regulations.
Additionally, Johari said that the Malaysian Sustainable Palm Oil (MSPO) certification is set to gain global recognition, as it addresses key issues such as traceability, deforestation-free policies, the requirement for legitimate land ownership titles, and compliance with international labour practices.
He highlighted that 4.6 million hectares, equivalent to 81.24% of the country’s palm oil plantations, were MSPO-certified as of August.
Regarding the smallholders who have not yet complied with MSPO standards, the minister said that the government will continue to support them by promoting the use of quality planting materials, encouraging good agricultural practices, and providing financial assistance for replanting.
“We just need a little bit of time for our smallholders, and the government will assist them to comply over the period of time,” Johari told reporters after officiating the Malaysian Palm Oil Forum, an event organised by the Malaysian Palm Oil Council.
Last week, the European Commission announced its plans to delay the implementation of the EUDR by another 12 months, pushing it to Dec 30, 2025.
This decision followed criticisms from Malaysia, along with 16 other nations from Asia, Latin America, and Africa, which have expressed concerns about the regulations. Notably, both German Chancellor Olaf Scholz and the Biden administration supported calls for the delay.
In Europe, 20 of the EU’s 27 agriculture ministers backed the postponement, as did key figures such as European Parliament lawmaker Peter Liese and non-governmental organisation Fairtrade, which voiced concerns about the regulations' impact on producer organisations.
The EUDR, which regulates commodities linked to deforestation, covers items like palm oil, cocoa, coffee, soy, timber, and rubber. It requires complex geolocation data, polygon mapping, and due diligence statements from exporters.
Industry estimates suggest compliance could cost the palm oil sector US$650 million (RM2.74 billion) annually, with US$260 million of that burden falling directly on smallholders.