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Palm Oil Exports: Indonesian minister lobbies EU over restrictions


September 21, 2008

Palm Oil Exports:
Indonesian minister lobbies EU over restrictions

Indonesia, the world's largest palm oil producer, has sent a minister to lobby the European Union (EU), over concerns the group were planning a policy that would limit imports of the commodity, local daily the Jakarta Post reported.

After arriving in Jakarta on Tuesday from a week-long visit to the continent, Indonesian Agriculture Minister Anton Apriyantono said Indonesian and Malaysian representatives met EU parliamentarians, assuring them the palm oil produced by the two countries met emission standards set by the EU.

Anton visited several European countries -- the United Kingdom, Netherlands, and Belgium -- with his campaign. During a meeting on September 11 with the EU, he filed Indonesia's opposition to a planned EU directive on renewable energy and fuel quality (DREFQ) which
would enter a voting phase during the general assembly next month.

Anton argued that this directive would hamper palm oil exports from Indonesia and Malaysia to EU member states. The directive, however, regulates palm oil supply for alternative energy use, while imports for cooking oil and soap are not subject to the same laws.

Palm oil exported to the EU for biofuel is required to have a minimum emissions benchmark rate of 35 percent (the higher the rate the lesser the impact of the commodity on the environment).

According to the EU, however, the average recorded emissions rate of 32 percent for palm oil was below the minimum requirement.

Malaysia has denied the emissions rate measurement made by the EU, arguing that it was in fact around 60 percent.

Indonesia and Malaysia account for 85 percent of the world's palm oil output.

Anton said the planned EU directive was merely aimed at reducing the group's dependency on palm oil, which it could not produce itself.

"We are being attacked with environmental issues, while the real reason is trade competition, specifically with rapeseed. I asked the audience in a seminar why it should be us who makes the sacrifice and not those producing rapeseed or soybean."

"The EU was influenced by negative campaigns from non-governmental organizations (NGOs). We feel it's not about environmental issues, it's about trade," Anton said.

According to the ministry, Indonesia's palm oil exports reached 16.9 million tons last year with a total value of US$7.9 billion. Exports to Europe accounted for one fifth of this figure.

The EU has also accused palm oil producers of damaging the environment by planting crops in or near natural forests, and even in the middle of protected animal habitats.

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