Indonesian government prepared a lawsuit against the European Union (EU) over the palm oil dispute, said vice minister of trade today (01/07) - Photo by Trade Ministry Office

JAKARTA (TheInsiderStories) – Indonesian government prepared a lawsuit against the European Union (EU) over the palm oil dispute, said vice minister of trade today (01/07). The world’ biggest palm oil producer has proposed the consultations could be held at the end of this month in Geneva, Switzerland.

“We propose to the European Union that consultations can be held at the end of January,” said vice trade minister, Jerry Sambuaga, in an official statement today.

Indonesian authorities, as the plaintiff, has sent an official request for consultation on Dec. 9 to the EU, after conducting a scientific study and consulting with stakeholders in the palm oil sector. The bloc had responded and accepted it on Dec.18.

He explained, the lawsuit was filed by the government to the World Trade Organization (WTO) because the policy was considered discriminating Indonesian palm oil or biofuel products.

Through RED II policy, the EU requires the use of fuel in the Eurozone to come from renewable energy from 2020 to 2030. The implementing regulation includes palm oil in the commodity category that has Indirect Land Use Change (ILUC) is high risk.

As a result, biofuel made from crude palm oil is not included in the bloc renewable energy targets, including Indonesia’ palm oil. Sambuaga said that the Indonesian government objected to the abolition of the use of biofuel from palm oil by the EU.

In addition, this is a discriminatory action and has a negative impact on the country’ palm oil or biofuel exports to the Europe and will give a bad image of palm oil products in global trade.

“This is not in line with the principles of the European Union which prioritizes fair trade, freedom and openness. In addition, it is also not in line with the spirit of the Indonesia – EU Comprehensive Economic Partnership Agreement which is being negotiated by the two countries,” he claimed.

According to Statistic Indonesia data, in the last five years, export value of palm oil and biofuel/Fatty Acid Methyl Ester (FAME) of the country to Europe showed a negative trend or dropped 6.93 percent. Until October 2019, the export value was recorded worth of US$957 million, down 8.63 percent compared to the same period in 2018 of $1.07 billion.

While, in the January – October 2019 period, the export value of palm oil and FAME to the world was also recorded to have decreased by 9.33 percent from $3.71 billion to $3.36 billion in annual basis.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com