Malaysian palm oil and rubber smallholders on Wednesday filed a petition to the European Union to protest against a new law preventing imports into the bloc of commodities linked to deforestation risks.

The EU in December agreed on a deforestation law that requires companies to produce a due diligence statement showing when and where their commodities were produced and provide "verifiable" information that they were not grown on land deforested after 2020, or risk hefty fines.

"The regulation's unilateral and unrealistic demands on traceability and geolocation will prevent small farmers from accessing the European market," a group of six smallholder associations said in a joint statement.

They submitted the petition to the EU delegation in Kuala Lumpur, calling on its leaders to review the deforestation regulation and "recognise the harm" it would cause farmers.

Smallholders account for 26%, or around 1.5 million hectares of oil palm planted area in Malaysia, the world's second-largest palm oil producer.

Globally, more than seven million smallholders cultivate palm oil for a living, and rely on the commodity to escape poverty.

The EU rule places burden on smallholders and threatens their livelihoods, the groups said.

They said they were concerned about the potential labelling of Malaysia as a high-risk country for deforestation in the regulation.

"Given Malaysia and its small farmers' record on forest protection and sustainable production, and the mandatory adoption of the Malaysian Sustainable Palm Oil standards across the palm oil supply chain, such a designation would be highly demeaning to the Malaysian government and unjustified," they said. 

The European Union delegation in Malaysia did not immediately respond to a request for comment.

Malaysia and Indonesia, the world's largest palm oil exporters, have accused the EU of blocking market access for their palm oil. (Reuters)