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Indonesia, the world's leading producer of palm oil, files a complaint against the European Union denouncing a policy that it considers "discriminatory". CHAIDEER MAHYUDDIN / AFP

Indonesia has lodged a complaint before the World Trade Organization (WTO) against the European Union denouncing a policy which it considers " discriminatory " against palm oil.

The complaint could lead to a trade battle with Indonesia, the world's largest producer of palm oil , and the European Union worried about the environmental impact of this crop. " Indonesia officially sent a request to the European Union for consultation on December 9, 2019 which is the first step in a complaint, " said Agus Suparmanto, the Indonesian trade minister, in a statement on Sunday.

Malaysia, too, brandishes threat of complaint

Europeans consider palm oil to be an unsustainable biofuel because of its effect on deforestation. Consequently, within the framework of the "Red II" directive, the EU has decided that palm oil-based biofuel cannot be taken into account to achieve the objectives set by Europe in terms of renewable energies in 2030, which should result in restricting its use.

Neighboring country Malaysia , the world's second-largest producer of palm oil, has also raised the threat of a WTO complaint but is still giving itself some time. Teresa Kok, Malaysian Minister responsible for the palm oil sector oil is expected to travel to Europe in March. A procedure would therefore not be initiated before this step.

" I want to give my trip a chance and see if we can avoid filing a complaint with the WTO, " she said. Palm oil is the most widely used vegetable oil in the world and a key ingredient in many products, from food to cosmetics.

Palm oil, a threat to tropical biodiversity

But palm oil has been singled out by environmentalists for the deforestation it causes in Southeast Asia. It is seen as one of the greatest threats to tropical biodiversity.

Indonesia has already tried several other bilateral negotiations without reaching an agreement, said Iman Pambagyo, director general of international trade negotiations. " We need to reaffirm Indonesia's position vis-à-vis European policy, " he said to justify the complaint to the WTO.

( with AFP )