The EU began imposing duties of between 15.2% and 46.4% on Indonesian imports in January 2023, saying they were harming European industry.
"The Indonesian government and exporters assess that the European Union policy violates WTO provisions," Indonesia's trade ministry senior official Budi Santoso told Reuters on Tuesday, adding that the government is waiting for the EU's response regarding the consultation request.
Fatty acids, which use palm oil as a key raw ingredient, are found in both consumer products such as cosmetics and medicines as well as industrial lubricants.
Indonesia's exports of fatty acid to the bloc dropped by nearly 60% to $154 million in 2023 from $373 million in 2022 before the duties imposed.
The EU said imposition of the duties would help to ensure fair competition between fatty acid imported from Indonesia and locally produced fatty acid.
Indonesia's so-called "request for consultations" is the first step in a formal WTO dispute. It gives both parties around 60 days to resolve their differences before a formal WTO adjudication panel is formed.
(Reporting by Emma Farge in Geneva and Bernadette Christina in Jakarta; editing by Bartosz Dabrowski and Kim Coghill)