Indonesia and Malaysia, the world's biggest producers of palm oil, agreed on Monday to work together to fight "discrimination" against the commodity after a meeting between leaders from the countries.
The comments by Indonesian President Joko Widodo followed a meeting with Malaysian Prime Minister Anwar Ibrahim, who was making his first overseas trip since being elected last November.
Widodo, popularly known as Jokowi, said the two countries would "fight discrimination against palm oil" and "strengthen cooperation through the Council of Palm Oil Producing Countries" to address concerns.
The European Union plans to phase out palm-oil based fuels by 2030 because of perceived links to deforestation.
During their bilateral meeting, Anwar and Jokowi signed eight memorandums of understandings covering shipping, export-import financing, green energy, the development of battery industry, which they said they hoped would deepen cross border trade and investment.
The leaders also discussed the development of Indonesia's planned new capital, Nusantara, with Anwar handing over 11 letters of interest from Malaysian companies related to possible investment in the new city, located in the Indonesian portion Borneo.
The new capital could boost regional development, Anwar said, with the Malaysian states of Sabah and Sarawak located in the Malaysian part of Borneo Island.
"We hope the development of the capital will bring greater benefits to the wider region, including on Sabah and Sarawak," he said.