EU’s anti palm oil policy likely to be opposed by Indonesia and Malaysia

INDONESIA and Malaysia will likely make a separate move against the European Union policy against palm oil through a delegated regulation supplementing directive of the EU Renewable Energy Directive II (RED II), which is now being deliberated by the European Parliament, a trade official has said.


“We will wait for our partner, Malaysia, such as which law firm will be assigned. We have to complement each other,” said Oke Nurwan, international trade director general of the Indonesian Trade Ministry in Jakarta on Monday.

The European Parliament on Monday kicked off the session, which will deliberate the EU Renewable Energy Directive II submitted by the European Commission on March 13.

If the RED II is approved, the EU will categorise palm oil as an unsustainable product and phase out its use in biofuels in 2030.

The Foreign Ministry's special staffer for prioritised programme acceleration, Peter Gonta, said the government was still waiting for the European Parliament’s decision.

“The session could produce a ban [on palm oil] or the parliament will delay the decision to April 15, or it would wait for the election of the new parliament. We still don’t know. We will find out within the next three days,” Peter added.

House of Representatives Speaker Bambang Soesatyo reportedly joined the diplomatic force by sending a letter to the European Parliament, calling on it to reject the RED II draft.

Indonesia takes the issue seriously and will take it to the World Trade Organization if the EU approves the draft, Oke said, adding Indonesia could make a separate litigation move or collaborate with Malaysia.

Indonesia is the largest crude palm oil producing country, while Malaysia is the second. 

Indonesian exports to the EU were recorded at US$17.1 billion (Bt541 billion ) in 2018, while imports were at $14.1 billion (Bt445 billion). Investment from EU countries to Indonesia stood at $3.2 billion in 2017.



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