The EU Commission plans to issue later this year a regulation that will limit the concentration of 3-monochloropropane diol (3-MCPD) — a chemical byproduct toxic to the kidneys and testes in high dosages — in vegetable oils sold within the bloc.

Concentrations will be limited to 2.5 milligrams per kilogram (mg/kg) for palm, olive pomace and nut oils and 1.25 mg/kg for rapeseed, maize, sunflower and soybean oil.

Coordinating Economic Minister Airlangga Hartarto said in Jakarta on Friday that the proposed “discriminatory” two-tier system would make EU consumers “perceive palm oil as bad” compared to other vegetable oils.

“We have strongly voiced our position to the EU, as the EU plans to make a decision on the proposed two-tier maximum levels of 3-MCPD today in Brussels. Besides concerns about exports, the issue of the 3-MCPD safety limit is also crucial to safeguarding the domestic market,” he said.

Indonesia is fearful the regulation will put added pressure on the domestic palm oil industry. The country’s crude palm oil (CPO) exports to the EU dropped 3.8 percent year-on-year (yoy) to 4.6 million tons in 2019, after the EU began phasing out palm oil-based biodiesel consumption in March 2019.

As Indonesia is the third-largest palm oil market after China and India, Europe’s consumption behavior is pivotal to the country’s palm oil industry, which contributed US$19 billion in exports to Southeast Asia’s largest economy last year and employed more than 15 million people.

Also speaking on Friday, EU Commission health and consumers director general Frans Verstraete said the two-tier system was meant to accommodate the lowest reasonable 3-MCPD levels in the processing of different vegetable oils. Rapeseed, sunflower and soybean oils “can easily achieve” the lower level, whereas for palm and nut oil, “this level cannot be reached”, he explained.

“If we set one single level, it would be too restrictive for certain vegetable oils. We finally agreed with member states to go for a double level,” he said via video call.

Unhappy with the EU regulation, Indonesian and Malaysian palm oil stakeholders are lobbying their respective governments to raise the issue in Brussels and at the World Trade Organization. Palm oil producers would prefer the EU implements a 2.5 mg/kg limit for all vegetable oils.

“It’s discriminatory. What is safe for our oil should be the safe standard for all vegetable oils,” said Malaysia’s Yusof bin Basiron, executive director of the Council of Palm Oil Producing Countries (CPOPC), an intergovernmental organization founded by Indonesia and Malaysia.

In November last year, Malaysian Primary Industries Minister Teresa Kok called upon other palm oil producing countries, including Columbia and Guatemala, to join the fight against EU restrictions by becoming part of the CPOPC, lodging complaints at the WTO or promoting the usage of palm-oil based biodiesel.

Dupito Simamora, deputy executive director of the CPOPC, added that the organization sent in December last year a joint letter to the Indonesian and Malaysian governments, requesting them to protest the regulation to their EU counterparts in Brussels.

“It’s actually not difficult to meet the 2.5 tier standard. Several consumers here such as KFC and McDonalds already use that standard for palm oil. It’s not a problem of preparedness but of non-discrimination,” he told The Jakarta Post.

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