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Malaysia asks for UK's help in palm oil row with EU

A farmer holds palm fruits on a palm oil plantations in Indonesia
A farmer holds palm fruits on a palm oil plantations in Indonesia

The EU is endangering around 35,000 British jobs and £150m in exports by ploughing ahead with a ban on palm oil, Malaysia has warned.

Malaysian government minister Teresa Kok - who has been meeting British counterparts this week as part of a tour of European capitals - called on the UK to fight the EU’s “rather hostile palm oil campaigns”.

“It would be helpful for us if the UK uses its influence in Europe to help us to stop this discrimination,” she told the Telegraph, urging Theresa May’s Government to “take the lead” by becoming the first European nation to recognise Malaysia’s efforts to produce palm oil sustainably.

The minister, who oversees Malaysia’s palm oil sector, made her intervention as the EU prepares to introduce a measure, waved through the European Parliament, which would see its use as a biofuel phased out.

Under the new EU law, the use of more harmful biofuels will be capped at 2019 levels until 2023 and reduced to zero by 2030. Palm oil is a type of vegetable oil used in products from lipstick and soap to biodiesel.

The crackdown comes in response to concerns from environmental campaigners that palm oil production is a major cause of deforestation that leaves orangutans injured and homeless.

However, Ms Kok warned that the EU’s stance risked escalating a brewing trade war with Indonesia and Malaysia, the world’s biggest palm oil growers. “We buy a lot from Europe, but this can change,” she said.

A digger destroying rainforest to make way for oil palm plantation in Borneo

An estimated 34,641 British jobs depend on EU exports to south-east Asia, according to think tank Copenhagen Economics. European spirits makers have already suffered delays in securing approval to export their products to Indonesia, in a move seen as a warning shot in a prospective trade war.

The palm oil row is already frustrating the development of EU relations with the region, stopping a potential “strategic partnership” from being agreed with the ASEAN bloc this year, and thwarting the prospect of a free trade agreement with nations such as Malaysia.

Brexit could pave the way to a swift free trade agreement with Malaysia, Ms Kok suggested, as a deal could be hammered out “in months” if the UK does not follow the EU’s palm oil curbs. “We’ll be very pleased to quicken the process,” she declared.

Senior Tory Eurosceptic MPs called on the UK to fight the EU's move. “I am deeply concerned about the way in which the EU treats Malaysia on the issue of palm oil and I certainly believe that the UK should defend Malaysia from the discrimination that they are experiencing, given Malaysia’s efforts to produce palm oil in a responsible way,” said Sir Bill Cash.

“Both the EU and the UK have a significant interest in ensuring a proper approach to this subject.”

A European Commission spokesman insisted that the new measure did not ban the import of palm oil, adding: “No specific biofuel or feedstock is targeted. All vegetable oils are treated equally. Palm oil is not identified as a bad biofuel per se."

In the UK, a campaign against palm oil has been spearheaded by the supermarket chain Iceland, which has stopped selling products containing the oil and garnered publicity last year when its anti-palm oil Christmas advert was banned after being deemed too political.