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ndonesia, the world’s largest producer of palm oil, can now breathe a sigh of relief following a decision by the French legislature to scrap a plan to impose a hefty additional tax on the product.

Previously, Indonesia strongly protested against France’s plan to issue a biodiversity law that would have tripled import taxes on palm oil products, one of the country’s main export commodities. The draft, citing environmental protection, stipulated that exporters would be obliged to pay as much as €300 (US$331) for each metric ton in 2017, €500 in 2018, €700 in 2019 and €900 in 2020. At present, Indonesia is required to pay an import duty of only €103 per metric ton.

The head of land and spatial division of the Indonesian Palm Oil Producers Association (GAPKI), Eddy Martono, said industry players were satisfied with the result and gave its highest appreciation to the government for its strong lobbying to call off the plan. The plan had caused an outcry among producers.

Although Indonesia’s palm oil exports to France were much lower in value compared to what it sent to other countries, Eddy said the consequences of the plan were worrisome. France is not included in the Central Statistics Agency’s (BPS) top 16 palm oil export destinations.

Last year, Indonesia exported 4.6 million tons of crude and processed palm oil to Europe, including to France.

“We’re happy with the results. France’s additional tax would have negatively affected our palm oil trade with other EU countries; if one country imposes such a high tax, others would follow suit. That would have been a big burden for producers and manufacturers,” Eddy said.

The tax would have also harmed not only large manufacturers but also smallholders, he said. With skyrocketing taxes, farmers would suffer the most as they have to push down their prices, making them unable to maintain costly sustainable practices.

France’s National Assembly scrapped the planned additional tax and is set to introduce a new scheme to harmonize taxes on such oils, as well as include an exemption for those that are sustainably produced based on “objective criteria”, Reuters reported on Thursday.

France’s Secretary of State for Biodiversity Barbara Pompili said that legal uncertainty around the tax, which focused on only one type of vegetable oil and contained a tax exemption based on sustainability criteria that were not clearly identified, had prompted the change.

Indonesia and Malaysia, the two biggest palm oil producers, have persistently lobbied against the tax.

Previously, Trade Minister Thomas Lembong said he was certain the government’s strong lobbying would be fruitful. He, however, acknowledged that Indonesia still had shortcomings in the environmental management of palm oil production, a flaw that could discourage countries from importing Indonesia’s palm oil.

The government’s planned moratorium on palm oil permits may be a solution to bring about more environmentally friendly practices, Thomas said.

“If plantation land is limited, producers have no choice but to intensify production as opposed to making room for new plantation areas and involve more smallholders while practicing sustainable agriculture,” he said.

Palm oil is one of the least taxed vegetable oils in France. The proposal to impose an additional tax on the product has been going back and forth between the French National Assembly and the Senate, but it was the National Assembly that had the final word.

France’s initial proposal was softened by the National Assembly in March when it excluded sustainable palm oil and sharply reduced the amount of the levy, but the biodiversity bill in which the tax was included was not passed by the Senate, forcing the two assemblies to compromise. The meeting ended in a deadlock.

This is not the first attempt by French lawmakers to impose a tax on palm oil, which campaigners say contributes to deforestation and impacts biodiversity. The first one, in 2012, was to have quadrupled the tax on palm oil.