Malaysia’s Small Farmers Defeat Europe’s Planned Ban on Palm Oil Biofuels

Compromise Agreement on RED is Reached; Ban on Palm Oil is Rejected

KUALA LUMPUR, Malaysia – Malaysia’s Small Farmers took a major step towards defeating the EU’s planned ban on Palm Oil biofuels, after the EU reached a compromise position on the Renewable Energy Directive (RED).

To be clear: the final text of the RED agreed by the negotiators, did not include any ban on Palm Oil biofuels. Explicit criticism of Palm Oil was also removed from the final RED text.

This is good news for Malaysian Small Farmers, in the face of a concerted and aggressive campaign by a chorus of protectionists from Europe. It is important to remember why this matters:

  • 650,000 Malaysian small farmers and their families depend on Palm Oil
  • Palm Oil is the biggest driver of poverty alleviation for rural communities
  • The EU ban would have harmed the incomes and livelihoods of these families
  • Defeating the ban is a win for economic development over protectionism

In January 2018, the EU Parliament voted overwhelmingly in favour of a total ban on all Palm Oil biofuels, from 2021. That plan was rejected by the EU Commission and by EU governments, following a well-directed campaign from Malaysian Small Farmers.

The proposed Palm Oil ban from 2021 has been completely removed from the final RED text that was agreed in Strasbourg on 13th June.

A final vote is now required in the EU Parliament and Council to confirm the RED Directive.

Dato’ Haji Aliasak Bin Haji Ambia, President of the National Association of SmallHolders (NASH), said:

“We are pleased the EU’s planned ban on Palm Oil biofuels from 2021 was rejected.  The ban was anti-WTO, protectionist, discriminatory, and totally unacceptable. No ban on Palm Oil will take place, and the European market will remain open to Palm Oil biofuels.

“This is a cause for celebration for all Malaysians, especially the 650,000 small farmers and our families across the country. All those in Europe who lobbied for a Palm Oil ban were really lobbying for poverty and hardship for Malaysians.

“Members of the European Parliament sought to sentence Malaysia’s Small Farmers to a life of poverty. They have stated already their plan to control Palm Oil again after 2019 through ILUC and a new regulation on Palm Oil imports for food. This is more of the same: discrimination and unequal treatment.  The fight continues.”


Here Are The Facts:

The Original Ban

On 17th January 2018, the EU Parliament demanded three very simple things:

  1. Total ban on all palm oil biofuels under the RED
  2. The ban to begin immediately in January 2021
  3. No other oil crops would be subjected to this criteria or discrimination. Only palm oil.

All three of these points have been deleted from the final RED Compromise Agreement on 13th June 2018. The EU ban on Palm Oil has been defeated.

The Situation Today

The three EU demands were defeated, and replaced with the following in the RED compromise text:

  1. EU Commission will present a report in 2019 about how to calculate ILUC and HCS emissions from biofuels considered “High Risk.” No specific crop is targeted.
  2. Based on the new EU report on high risk biofuels, some biofuels will be capped at their 2019 import level. There will be no ban on any crop. No specific crop is currently targeted for a phase-out.
  3. Based on the new EU report, some biofuels may be gradually phased out from 2024-2030. There will be no ban on any crop. No specific crop is targeted, as of today.

Palm oil is not mentioned, or targeted, at all in the new text.

It is entirely inaccurate to state that palm oil has been banned or phased out under the RED. That statement no longer exists in the final RED text.

Looking Ahead

The EU Commission’s planned report on ILUC and High Carbon Stock in 2019 will be the beginning of the next battle over Palm Oil biofuels. ILUC has been condemned as junk science by economists and experts worldwide. Opponents will now attempt to use ILUC and HCS as the vehicles to restrict the future use of Palm Oil biofuels in Europe.

Draft version of the RED Compromise Text – Article 25

In case the contribution from biofuels and bioliquids, as well as from biomass fuels consumed in transport, produced from food and feed crops in a Member State is limited to a share lower than 7% and/or a Member State decides to limit the contribution further, that Member State may accordingly reduce the overall share referred to in the first sub-paragraph.

The contribution to the targets set out in Article 3(1) and Article 25(1) from high indirect land-use change risk food or feed crop-based biofuels, bioliquids and biomass fuels produced from crops for which a significant expansion of the production area into land with high carbon stock is observed, shall not exceed the level of consumption in 2019 in the Member State, unless they are certified as low indirect land-use change-risk biofuels, bioliquids and biomass fuels pursuant to []. As of 31 December 2023, their contribution shall decrease gradually to reach a contribution of 0% by 31 December 2030 at the latest. 

The Commission shall submit, by 1 February 2019, to the European Parliament and the Council a report on the status of production expansion of relevant food and feed crops worldwide and shall adopt, by 1 February 2019, a delegated act setting out the criteria for certification of low indirect land-use change-risk biofuels, bioliquids and biomass fuels and for establishing the high indirect land-use change risk feedstocks for which a significant expansion of the production area into land with high carbon stock is observed. The report and the accompanying delegated act shall be based on the best available scientific data.


Faces of Palm Oil is a joint project of the National Association of Small Holders (NASH), the Federal Land Development Authority (FELDA), the Dayak Oil Palm Planters Association (DOPPA), the Sarawak Land Consolidation and Rehabilitation Authority (SALCRA) and the Malaysian Palm Oil Council (MPOC) that seeks to advocate on behalf of Malaysian smallholders. To learn more, visit