JAKARTA (Reuters) – Indonesia and Malaysia, the world’s biggest palm oil producers, plan to send envoys to the European Union to discuss the impact of the bloc’s new deforestation law on their palm oil sectors, ministers from the Southeast Asian countries said on Thursday.
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 has been welcomed by environmentalists as an important step to protect forests as deforestation is responsible for about 10% of global greenhouse gas emissions.
Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto on Thursday met with Malaysia’s Commodities Minister Fadillah Yusof to discuss the next steps.
“We agreed to carry out a joint mission to the EU to communicate and to prevent unintended consequences of the regulation on the palm oil sector, and to seek possible collaborative approaches,” Airlangga told reporters.
Indonesia and Malaysia have accused the EU of implementing discriminatory policies targetting palm oil.
EU diplomats have denied the bloc is seeking to ban any imports of palm oil and said the law applies equally to commodities produced anywhere. The EU is the third-largest palm oil market for both countries.
Malaysia’s Fadillah said after meeting Airlangga that palm oil producers had put in place sustainability measures and the industry was crucial to support the welfare of small farmers.
The envoys dispatched to the EU would also try to ensure buyers that sustainability certifications introduced by Indonesia and Malaysia, known as ISPO and MSPO, respectively, already met international standards.
Malaysia said last month it could stop exporting palm oil to the EU in response to the deforestation law.
Airlangga said the issue of an export boycott was not brought up at Thursday’s meeting.
“An export stoppage was not discussed … it was not an option,” he said.
(Reporting by Bernadette Christina Munthe; Writing by Fransiska Nangoy; Editing by Ed Davies)
