KUALA LUMPUR (REUTERS) - Malaysia will file a complaint at the World Trade Organisation (WTO) by November to challenge a European Union move to phase out palm oil from being used in transport fuels in the bloc.

"About the WTO, yes we are pursuing it, in fact the documents are with the attorney-general chambers now... They are assisting us... (and) helping us identify experts who can argue the case in the WTO," Primary Industries Minister Teresa Kok told reporters after an industry event on Monday (July 15).

She added that it would be strategically good for Malaysia to file a joint complaint with Indonesia.

The European Commission had earlier this year decided to phase out palm-based transport fuels in its share of renewable energy after concluding that its cultivation results in excessive deforestation.

This led Malaysia to threaten a WTO challenge to the EU move, while Malaysian Prime Minister Mahathir Mohamad said the EU risks opening up a trade war with Malaysia over its "grossly unfair" policies aimed at reducing the use of palm oil.

Malaysia is the world's second-biggest palm oil producer and exporter after Indonesia, and relies on the crop for billions of dollars in foreign exchange earnings and hundreds of thousands of jobs.

However, palm oil has been accused by environmental groups of vast deforestation, leading to a loss of biodiversity and climate change.