© Reuters. FILE PHOTO: A worker loads bunches of fresh palm oil fruits to be transported from the collection site to CPO factories in Pekanbaru, Riau province, Indonesia April 27, 2022. REUTERS/Willy Kurniawan
JAKARTA (Reuters) – The world’s two biggest palm oil producers, Indonesia and Malaysia, will send senior officials to the European Union next week to express concern over a new law on deforestation that will , they say, could be detrimental to small agricultural businesses.
Indonesia and Malaysia account for around 85% of global palm oil exports and the EU is their third largest market.
The European Parliament last month approved a landmark law on deforestation banning imports into the EU of coffee, beef, soy and other commodities unless companies can provide ‘verifiable’ information indicating that the products were not grown on deforested land after 2020.
Violators would face heavy fines.
Both Indonesia and Malaysia have confirmed that the visit to Brussels will take place on May 30-31.
Both have accused the EU of discriminatory policies targeting palm oil and Malaysia has previously said it may stop exporting it to the EU due to the deforestation law.
The regulation has been welcomed by environmentalists as an important step to protect forests, with deforestation responsible for around 10% of global greenhouse gas emissions.
Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, said the law would impose onerous administrative procedures on smallholders.
“The law could exclude the important role of smallholders in the global supply chain and fail to recognize their importance and their rights,” Airlangga said in a statement.
Airlangga will travel to Brussels with the Malaysian Minister of Commodities, Fadillah Yusof. The mission will seek to discuss ways to minimize the negative impacts of the law, particularly on smallholders, the statement said.
EU diplomats have denied that the bloc is seeking to ban palm oil imports and said the law also applies to commodities produced anywhere.