Indonesia urges importers to back sustainable palm oil, not boycotts

KUALA LUMPUR (Reuters): Indonesia, the world's largest palm oil exporter, on Wednesday (May 17) urged importing countries to recognise and pay the premium for sustainably produced palm oil rather than boycotting the widely-used oil, whose production critics say has been linked to deforestation.

The European Union in April approved a deforestation law to block imports of palm oil, beef, soy and other commodities if they are linked to recent destruction of the world's forests.

Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto (pic), said consumer countries were tightening entry requirements for palm oil.

"While trying to improve the environmental practices, we seek the cooperation of all the stakeholders to pay a premium for product that adopts sustainability practices," Airlangga said at a ministerial meeting of the Council of Palm Oil Producing Countries (CPOPC).

Boycotting palm oil will not provide a long-term solution for the environment, he added.

Palm oil producers have in recent years said consumer goods companies do not buy enough sustainability-certified palm oil, undermining efforts to reward those who adopt greener practices and reduce deforestation.

Indonesia and Malaysia, the founding members of CPOPC, will send envoys to the EU at the end of May to discuss the impact of the bloc's deforestation law on their palm oil sectors.

The envoy will aim to seek clarity on the traceability requirements of the EU regulation and urge the bloc to recognise palm oil sustainability certifications, Malaysia's commodity minister Fadillah Yusof said.

Malaysia is committed to progressively raising the proportion of palm oil in biodiesel, said Fadillah, who is also deputy prime minister,

The world largest palm oil producers Indonesia and Malaysia use the edible oil as blending for biodiesel, with Indonesia in February raising its mandate to a 35% palm oil mix and Malaysia maintaining its mandate at a 20% mix.

"Malaysia continues its commitment to the implementation of the biodiesel program, progressively incorporating increased biodiesel blending ratios," Fadillah added.

The CPOPC also welcomed Honduras as its third full member into the organisation.

Honduras is the third-largest producer and exporter in Latin America, and eighth-largest globally, said Honduran agriculture minister Laura Suazo.