Malaysia will press the European Union not to ban palm oil in biofuels during talks this week, the country's trade minister said Thursday, warning the move would hit the rural poor.

The European Parliament earlier this year voted in favour of a draft law on renewable energy that calls for the use of palm oil in biofuels to be banned from 2021, amid mounting worries about its impact on the environment.

Malaysia and Indonesia will be hard hit as they are the world's top exporters of palm oil.

Malaysian Trade Minister Mustapa Mohamed said he will raise the issue when he meets with EU Trade Commissioner Cecilia Malmstroem on the sidelines of an Association of Southeast Asian Nations (ASEAN) trade ministers' meeting in Singapore.

The two-day meeting began Thursday and includes talks with Malmstroem, who is heading an EU delegation. ASEAN is a regional bloc of 10 Southeast Asian nations.

"This is a subject that is very important to us. Of course, I will raise the subject with her when I see her later," Mustapa told reporters.

"We've been in communication and they've been providing assurances that this is not final yet," he said, adding that the European Parliament vote is not yet binding.

He said the livelihoods of more than 650,000 smallholders living in rural Malaysia would be affected by any ban.

"You cannot discriminate against the poor people of Malaysia and Indonesia," he said.

Palm oil, also a major ingredient in products from food to cosmetics, has long been controversial as environmentalists say it drives deforestation, with huge swathes of rainforest logged in recent decades to make way for plantations.

The use of the commodity in food and cosmetics had already dropped in Europe, partly due to pressure from green groups on major corporations, but has been increasing in biofuels.

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