Indonesia Triumphs in Palm Oil Trade Dispute with European Union

Sabtu, 18 Januari 2025

Budi Santoso, Indonesian Minister of Trade.

SELASAR.CO, Jakarta – The World Trade Organization (WTO) has ruled in favor of Indonesia, finding that the European Union (EU) has been discriminating against Indonesian palm oil and palm oil-based biofuels. The WTO’s Panel Report, circulated on January 10, 2025, revealed that the EU has been granting more favorable treatment to similar products from other countries, such as rapeseed, sunflower, and soybeans.

"The Indonesian government welcomes the WTO Panel’s decision on the palm oil trade dispute with the European Union, particularly in relation to climate change issues. This decision is expected to serve as a basis for the EU to cease implementing discriminatory policies. Going forward, we hope that other trading partners will refrain from adopting similar policies that could hinder global trade," stated Budi Santoso, Indonesian Minister of Trade, in a statement released on Friday, January 17, 2025.

The WTO Panel also concluded that the European Union had failed to properly evaluate data when assessing the high indirect land use change (ILUC) risk of palm oil-based biofuels. Furthermore, the WTO noted deficiencies in the implementation of criteria for certifying low-ILUC-risk biofuels within the Renewable Energy Directive II (RED II) policy.

Minister Budi Santoso characterized the EU's policy as a form of protectionism disguised as environmental sustainability concerns.

In accordance with WTO regulatons, the panel report will be adopted within 20 to 60 days if there are no objections from the disputing parties. The adoption of the report will make the findings binding on both Indonesia and the EU.

The Indonesian government will closely monitor any changes to EU regulations to ensure compliance with the WTO Dispute Settlement Body’s recommendations and, if necessary, will request a compliance panel to assess such adherence.

Penulis: Redaksi Selasar
Editor: Jesslyn Chouda