The massive palm oil industry of Malaysia has warned that the European Union's (EU) latest proposal for making the food industry more sustainable might eventually lead to stricter regulations for the imports of the world's most-consumed vegetable oil.

The Malaysian Palm Oil Council (MPOC) is tensed that the EU, which is pushing for a "fair, healthy and environmentally-friendly food system" as apart of the 2030 climate target plan, can take the decision of implementing its own sustainability standard for the palm oil.

The EU, the third-largest buyer of Malaysian palm oil, announced a so-called "Farm to Fork " in May, raising alarm bells in the Southeast Asian country that is the world's second-biggest producer and exporter of the edible oil. "Our fear is that (the strategy) will be extended beyond the EU borders," MPOC Chief Executive Kalyana Sundram told Reuters.

Palm Oil May Face Threats From EU's 2030 Climate Target Plan

Oil palm
A worker loads oil palm fruits into a truck before sending them to a factory in Morowali district, in Indonesia's central Sulawesi province, April 1, 2008. Indonesian palm oil prices fell sharply on Tuesday, jolted by a big drop in Malaysian crude palm oil futures, as traders turned cautious after recent volatility. Reuters

He said Malaysia would have to engage with the EU about the proposed initiatives before exports to the bloc become difficult. Amongst the wide-ranging initiatives proposed are a sustainable food labelling framework, a reformulation of processed foods, and a sustainability chapter in all EU bilateral trade agreements. The EU also plans to publish a proposal for a legislative framework for sustainable food systems by 2023 to ensure all foods on the EU market become increasingly sustainable.

Food use makes up 65 percent of global consumption of palm oil that is found in everything from bread to chocolate spread and instant noodles. Neighbours Indonesia and Malaysia produce 85 percent of the world's palm oil, and have been battling criticism of rampant clearing out of tropical forest for palm cultivation by encouraging industry compliance with international and national palm oil sustainability certification standards.

The EU has already decided to phase out palm-based transport fuels from its consumption of renewables by 2030 and is expected to set new limits on food contaminant 3-MCPD esters found in refined fats and oils.