Indonesia lobbies Europe Union (EU) to reduce palm oil tariffs from 54% with sustainable development by implementing palm oil governance based on Indonesia Sustainable Palm Oil (ISPO) which has standards above the average criteria required by international certification institutions. Photo by: TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian senior minister said that the use of 20 percent bio-diesel (B20) scheme has saved US$2.5 billion in foreign exchange since implementing in 2015. The government also ensure the sustainability of the palm oil industry in Indonesia although today many challenges mainly from the external side.

Coordinating Minister for Economic Affairs Darmin Nasution said in one seminar in Jakarta, that based on data, the total value of palm oil products in 2018 amounted to $17.89 billion and contributed 3.5 percent to the Gross Domestic Product.
Palm oil industry, he continuer, is able to absorb up to 4.2 million workers directly and 14.3 million of indirect labor, while oil palm plantations managed by independent smallholders are able to absorb 4.6 million people.
“Foreign exchange we earn from exports of palm oil and its derivatives was already there at $20 billion. So that’s the situation. Palm oil is not a joke,” said the senior minister.
He added, Indonesia has implemented a Indonesian Sustainable Palm Oil (ISPO) system since 2011. The ISPO is designed to ensure that oil palm Indonesia is managed by the Good Agricultural Practices in accordance with the principles of social, economic, and environmental sustainability.
“Currently, we are conducting the process of strengthening ISPO to prepare new presidential regulation. ISPO long equivocal provide support to small farms, “he said.
Regarding challenges, Indonesia now faced European Commission‘ regulation of derivatives (Delegated Act) Renewable Energy Directive II. This regulation classifies palm oil as a commodity biofuels are not sustainable and high-risk ILUC (Indirect Land Use Change). Another challenge is the imposition of anti-subsidy duties on palm oil-based biodiesel to Europe.
“The government together with all stakeholders is finalizing a strategy and an integrated diplomacy,” Nasution stated.
While, Chairman of the Indonesian Chamber of Commerce Roslan Roeslani said that Indonesia lobbying European Union (EU) to reduce palm oil tariffs from 54 percent by implementing ISPO.He rated, that ISPO is a solution to face market demand in Europe and ward off negative sentiment towards national palm oil.
Government has palm oil entrepreneurs to fight consistently through palm oil diplomacy. He explained that Indonesia’ palm oil is one leading commodities which can be the biggest contributor to foreign exchange.
According to him, the issue of oil palm dumping is a serious challenge for the domestic palm oil industry, which is currently the highest supplier in the world market, especially EU.
“If our palm oil industry is having difficulties in marketing now, of course the subsequent effects will be quite large, from upstream to downstream and supporting sectors that sell goods and services within the scope of the palm oil commodity,” he said in Jakarta (07/31).

Besides that, it also hopes that the Indonesia – EU Comprehensive Economic Agreement can be realized soon. Because in the midst of competition for the world palm oil market, Indonesia has been displaced by Malaysia and India, which have an India-EU Comprehensive Economic Cooperation Agreement. Indian palm oil tariffs have decreased from 54 percent to 45 percent.

Roeslani said this issue could hamper Indonesia’ palm oil industry. It will continue to convince the world public that Indonesia has committed to implementing sustainable forest management practices as stipulated in MDGs and SDGs.

“There should be no negative sentiment for the Indonesian palm oil industry on the EU market,” he said.

Written By Willy Matrona