Indonesia, Malaysia to challenge EU on palm oil

A government document outlining Indonesia’s stance on the EU policy and reviewed by Reuters said the method used to assess Indirect Land Use Change (ILUC), which aims to measure the risk of unintended carbon emissions, was not internationally recognized and not applicable in a tropical region.

The criteria listed in the ILUC benefits local European Union commodities such as rapeseed oil, it said.

Indonesia’s Foreign Minister Retno Marsudi said in a letter to the Association of Southeast Asian Nations (ASEAN) that developments in the EU hurting the interests of ASEAN palm oil-producing states have caused it to defer the elevation of the ASEAN-EU dialogue relations to a strategic level.

The January 14 letter urged other members of the ASEAN to follow suit.

All Indonesia-EU relationships will be overviewed related to the discriminatory policy by the EU, Siregar said.

Asked about the letter, a spokesman at the ASEAN Secretariat in Jakarta said: It is up to the member states to decide.

Rafael de Bustamante Tello, first counsellor at the EU embassy in Jakarta, said: The EU considers the RED II to be in line with the EU’s international commitments, including its WTO obligations.

The European Commission will make sure the achievement of the EU’s renewable energy goals goes hand in hand with the fair and rules-based international trade regime that we strongly defend, he said.

De Bustamante also said that during an EU-ASEAN ministerial meeting in Brussels last week, the two blocs decided to form a new joint working group to address issues related to palm oil.

In January last year, the WTO ruled in favor of Indonesia on several challenges related to anti-dumping duties that the EU had imposed on its biodiesel exports. The duties had effectively stopped the trade, but exporters were able to resume shipments to Europe around April.

Palm oil, mainly produced in Indonesia and Malaysia, is used as feedstock for biofuels, as well as in a wide variety of goods, ranging from food to soap.

Source: ANTARA News