Malaysia is the second largest producer in the world.
Deforested tropical rain forest in Borneo to be used for an oil palm plantation.
European lawmakers approved draft measures on Wednesday to reform the power market there and reduce energy consumption to meet more ambitious climate goals.
Mah said he will write to all the energy ministers of the European Union member states and ask Malaysia's ambassadors to those nations to convey the country's objection to the palm oil ban move.
In a press release, Malaysia's Plantation Minister Mah Siew Keong said the move was a "highly unjustified blockade against Malaysian farmers, families and communities". "The EU Parliament's decision to discriminate against palm oil biofuels will negatively impact European trade and cooperation in Malaysia, and the wider South East Asian region", he said.
On Wednesday, 429 Members of the EU Parliament voted for the resolution to phase out palm-based biofuels from the EU energy mix after 2020.
He explained that the EU's discriminative action is protective of its homegrown rapeseed and sunflower oils. "The EU is practising a form of Crop Apartheid", he said.
"The EU's move will add further pressure on Malaysian palm oil exports given the current high level of inventories", said Public Investment Bank's analyst Chong Hoe Leong in a report Thursday.
Malaysia's Prime Minister Najib Razak and Indonesian President Joko Widodo have called the move discriminatory, saying it singles out palm oil even though the production of other vegetable oils has also "shown to contribute to the deforestation".
To minimize the potential impact, Chong opined that the Malaysian government should start looking into new export markets and promote the use of palm oil in other ways.
Earlier this week, hundreds of Malaysian small palm planters had marched to the E.U.'s mission in Kuala Lumpur to petition against the push to curb use of palm oil in the bio-fuel program.
It was reported by local media Thursday that the Malaysian Palm Oil Board expected Malaysia's palm oil output this year to grow 3 percent year-on-year to 20.5 million tonnes.
Fry, who is Chairman of London-based palm oil consultancy firm LMC International Ltd Chairman, said as at past year, 99% of all palm oil biofuel in the European Union was certified.
"Don't expect us to continue buying European products", he said.
"The government will not tolerate the denigration of the palm oil industry and will ensure Malaysia gives a fitting response to those who harm the palm oil industry", Mah said. The European Parliament, the executive European Commission, and the EU national governments must now negotiate a final draft of the legislation and approve it. "For palm oil, I won't be surprised if the end result is very little change in the price, because the market will balance itself", he said.