The implications of EU regulations to Malaysian palm oil exporting and its economic consequences
Litja, Dora (2020)
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020122029763
https://urn.fi/URN:NBN:fi:amk-2020122029763
Tiivistelmä
As awareness of climate change has globally increased, palm oil’s affiliation with environ-mental issues has been a topic under consideration. In 2018, The European Union declared regulations to phase out the use of palm oil in biofuels 2020 onwards and ban palm oil in the industry by 2030. This thesis concentrates on Malaysian palm oil exports to EU, and how the EU regulations effect on Malaysian economy. The aim is to define the scope of the implica-tions and furthermore propose functions to diminish economic disadvantages of the EU palm oil restrictions. The topic of the thesis was devised during the author’s exchange studies in Malaysia.
The writing process of the thesis required thorough familiarization with palm oil consumption, climate issues, EU legislation and Malaysian economy. Fundamental information about the topic was applied from literature, yet majority of the data was researched from legitimate web sources including official government agencies, environmental non-governmental organiza-tions and online news articles to ensure the exploitation of recent information. To obtain im-partial results, global deviation of the acquired sources was essential. The research method was mostly qualitative, but the data required to calculate the implications was quantitative.
The outcome was calculated by taking Malaysian palm oil’s export value and end use into consideration by comparing the results with Malaysian GDP. The result indicated that the loss of EU as a palm oil customer in biofuel industry depreciated Malaysian GDP annually by 1-1,6 per mill directly, which equals to 4 billion US dollars by 2030. However, EU is in a transi-tion phase, which complicates the short-term estimation as well as there are several other vari-ables effecting the results, and other aspects besides the countable amount of money must be included in the discussion.
Palm oil is ubiquitous, inexpensive and versatile product, and thus challenging to replace. Nonetheless, it can be concluded, that to minimize the implications of EU palm oil regula-tions, Malaysia should actively search for alternative domestic substitutes for palm oil. The result also emphasizes the importance of certified sustainable palm oil and close monitoring of producers in order to keep entering EU markets.
The writing process of the thesis required thorough familiarization with palm oil consumption, climate issues, EU legislation and Malaysian economy. Fundamental information about the topic was applied from literature, yet majority of the data was researched from legitimate web sources including official government agencies, environmental non-governmental organiza-tions and online news articles to ensure the exploitation of recent information. To obtain im-partial results, global deviation of the acquired sources was essential. The research method was mostly qualitative, but the data required to calculate the implications was quantitative.
The outcome was calculated by taking Malaysian palm oil’s export value and end use into consideration by comparing the results with Malaysian GDP. The result indicated that the loss of EU as a palm oil customer in biofuel industry depreciated Malaysian GDP annually by 1-1,6 per mill directly, which equals to 4 billion US dollars by 2030. However, EU is in a transi-tion phase, which complicates the short-term estimation as well as there are several other vari-ables effecting the results, and other aspects besides the countable amount of money must be included in the discussion.
Palm oil is ubiquitous, inexpensive and versatile product, and thus challenging to replace. Nonetheless, it can be concluded, that to minimize the implications of EU palm oil regula-tions, Malaysia should actively search for alternative domestic substitutes for palm oil. The result also emphasizes the importance of certified sustainable palm oil and close monitoring of producers in order to keep entering EU markets.