World’s largest producers of palm oil for use as transport fuel namely Indonesia and Malaysia are crying foul over decision of European Union to phase out its use and declaring retaliation threats for its policy of trade protectionism. The move by European Union to phase out palm oil use from transport industry has been forced by sustained campaigns by several activists groups as they claim that the palm oil industry is based on rampant deforestation in the region followed by abuse of labor. They claim that sustainability in the region is being disturbed since Sumatra region lost 56 percent of its natural forests within past 31 years for palm oil industry.
A coalition of non-governmental bodies and environmental groups that were supported by World Wildlife fund had concluded that the palm oil industry which has its epicenter in the Sumatra island of Indonesia was the biggest driver for loss of forest cover in the region. While France and Norway were the first nations to start publicly curbing the use of palm oil since last month which has fueled fears in several other South East Asian nations that have used the power of this cash crop to drive economic growth. Both Malaysia and Indonesia contribute to more than 80 percent of the world’s demand for palm oil.
Recently European Union also agreed to slowly phase out usage of palm oil as a form of transport fuel from 2030 and slowly increase renewable energy methods that can be produced within the EU block. Palm oil in EU which is the world’s largest consumer of the same is used in wide range of activities from making detergents to baked goods. While Malaysian government has condemned the move, Thailand has said that such a move by EU is like engaging in a trade war. Though the oil is both versatile and used across the globe its reputation has suffered due to poor sustainability.