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EU clears Malaysia's palm oil certification for new deforestation rule
Published by Global Banking and Finance Review
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
The EU has recognized Malaysia's MSPO certification under new deforestation rules, enhancing sustainable palm oil trade and supporting smallholders.
KUALA LUMPUR (Reuters) -The European Union has recognised the Malaysian Sustainable Palm Oil (MSPO) certification as a credible standard that can facilitate compliance with EU's new deforestation regulation, the Malaysian certification body said on Wednesday.
The acknowledgement reinforces MSPO’s role as Malaysia’s national framework for sustainable palm oil and highlights its contribution to global trade and responsible sourcing, the certification body said in a statement.
The new EU regulation, due to come into effect in December, requires companies selling soy, beef, palm oil, wood, cocoa and coffee, and some products like leather, chocolate and furniture, to ensure that land associated with those products has not been subject to deforestation since the end of 2020.
MSPO began as a voluntary scheme for sustainable palm oil certification in Malaysia, the world's second-largest palm oil exporter. It was made mandatory for the palm oil industry in January 2020, with audits conducted by independent third-party certification bodies to ensure compliance and credibility.
The certification body said MSPO gives buyers and regulators the confidence that certified palm oil is legally sourced and deforestation-free, adding that its digital tracking system enables full supply chain visibility and strengthens trust among global stakeholders.
Plantation and Commodities Minister Johari Abdul Ghani said that the recognition affirms Malaysia’s leadership in sustainable palm oil and ensures that more than half a million smallholders are fully tied into the sustainability agenda.
"The EU’s acknowledgement also underscores MSPO’s credibility as a trusted and future-ready standard," he said in a statement.
"It assures global buyers that Malaysian palm oil is legally sourced, traceable, and sustainable, anchored in the livelihoods of smallholders and backed by a mandatory national framework."
(Reporting by Ashley Tang; Editing by John Mair and Sonali Paul)
The EU's recognition affirms MSPO’s credibility as a trusted and future-ready standard, ensuring that Malaysian palm oil is legally sourced, traceable, and sustainable.
The new EU regulation, effective in December, mandates companies selling products like palm oil to ensure they are deforestation-free and legally sourced.
MSPO certification supports over half a million smallholders in Malaysia, providing them with a framework that enhances their livelihoods and ensures sustainable practices.
MSPO was made mandatory for the palm oil industry in January 2020, transitioning from a voluntary scheme to a national standard.
The digital tracking system of MSPO enables full supply chain transparency, giving buyers and regulators confidence in the sustainability and legality of the certified palm oil.
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