Three political groups of the European Parliament agreed on 10 January on a compromise to cap the share of crop-based biofuels at a level reached in each member state in 2017 and to deem palm oil biofuel non-renewable.

The European People’s Party (EPP), the Socialists and Democrats (S&D) and the Alliance of Liberals and Democrats for Europe (ALDE) submitted their amendment for a vote at the EU plenary session in Strasbourg, France, on 17 January, the Euractiv news outlet wrote on 15 January.

The amendment, which Euractiv said was likely to be adopted, would limit the share of crop-based biofuels in each member state to the level the country had reached in 2017 and this cap would be maintained until 2030 without reduction or phaseout.

In countries where crop-based biofuels had a share of less than 2%, they would have flexibility to adjust their cap upwards to 2% if it meant they would be able to meet their 12% target of using renewable energy in transport.

The Parliament’s proposal was in opposition to the European Commission’s (EC) proposal to reduce crop-based fuels’ contribution in transport to 7% in 2021 and 3.8% by 2030, which had been heavily criticised by the biofuel industry as undermining investor confidence.

In addition to addressing crop-based biofuels, the Parliament’s amendment proposed stripping palm oil-based fuels of their ‘renewable’ title, which the three groups argues would promote sustainability and “leave more space in the cap for European-produced biofuels”.

While the EC insisted that there was no ban on palm oil, the 17 January plenary session could mark a major blow for palm oil imports to Europe and the world’s two largest palm oil-producing countries – Indonesia and Malaysia – were staunchly opposing the measure.

“In a sequence of acts akin to crop apartheid, the EU Parliament has taken steps to raise trade barriers, leading to an ultimate breach of the EU’s World Trade Organization (WTO) commitments,” said Malaysian Minister of Plantation Industries and Commodities Datuk Seri Mah Siew Keong in December 2017, adding that the country would bring the matter to the WTO if needed.

The EC, however, insisted that its proposals were in line with WTO rules, arguing that the palm oil measure was not a ban but simply a redefinition of terminology.

Malaysia’s Mah nonetheless said that should the palm oil restriction be implemented, it could jeopardise the talks to reopen the EU-Malaysia Free Trade Agreement negotiations, which were suspended in 2012.