Indonesia has threatened to block European milk powder imports if the European Union (EU) goes forward with its plans to restrict the import and use of palm oil.
The world’s largest palm oil producer exported US$18bn worth of its product in 2016, with the EU accounting for a 16% share, according to a Reuters report on 3 November.
The EU has claimed that demand for palm oil is fuelling deforestation in Indonesia and several proposals are ongoing to cut back palm oil use within the bloc.
In late October, the EU voted to phase out palm oil-based biodiesel by 2021, while in April, MEPs decided to implement a single sustainability certificate scheme for EU palm oil imports.
European countries outside the EU have stepped up their efforts to restrict the use of palm oil as well, with Norway blocking government purchasing of palm oil in June.
Indonesian trade minister Enggartiasto Lukita told Reuters that the country was ready to “do the same thing” if the EU continued to restrict palm oil use, saying that Indonesia would block milk powder imports “if the EU treats us unfairly and is discriminatory”.
According to the Jakarta Post, Lukita had also warned his European counterparts that he could advise the Indonesian government not to purchase Airbus aircraft in retaliation.
Indonesian palm oil firm Astra Agro Lestari’s chair Joko Supriyono said the country’s palm oil met international standards, but it had nonetheless begun looking for alternative markets in case of further restrictions from the EU.
Indonesia imported milk powder from the EU in addition to Australia and the USA, Reuters wrote.