Jakarta — Indonesia’s government said on Monday it will encourage the country’s palm oil companies to file lawsuits against the EU if the bloc goes ahead with a plan to phase out use of the commodity in renewable transport fuel. Indonesia, the world’s biggest palm oil producer, has strongly condemned the EU move to classify palm as a crop that causes deforestation that should be phased out by 2030 in transport fuel under the bloc’s Renewable Energy Directive (RED II). The EU is the second-largest market, behind India, for Indonesian palm, which accounted for about 12% of the country’s exports in 2017, according to government data. Indonesia in recent weeks also pledged to launch a World Trade Organisation (WTO) challenge against the EU and said the government is “examining bilateral relations with member states that have been most supportive” of the European rules. “Diplomatic approaches continue to take place but we are also taking litigation steps,” Oke Nurwan, director-general of...

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