After EU ruling, Indonesia expects EU to change its stance on palm oil biofuels

Indonesia has welcomed the World Trade Organization's ruling in the case of the European Union involving palm oil-based Biodiesel. The bloc is expected to amend its regulations to conform to the ruling.

Indonesia, the world's biggest palm oil producer, brought the case before the WTO dispute panel in 2019. The EU had decided that palm-oil-based diesel was not to be considered as a biofuel because of its connection to deforestation. Its use in transportation fuel would also be phased out from 2023 to 2030.

Indonesia claimed that the EU uses climate issues as an excuse to implement trade protectionist measures.

The Indonesian government welcomed the WTO panel's decision. We hope other trading partners will not implement policies in the future that could hinder global trade, Trade Minister Budi said in a late-night statement on Thursday.

The panel of three people ruled that last week the EU's measures to reduce greenhouse gas emissions were legitimate. They also ruled that there was a valid basis for the EU to label biodiesel made from palm oil "high-risk".

The panel did find fault with the way in which the EU prepared, published, and administered their measures. For example, they failed to conduct a timely analysis of data for determining high risks and didn't meet certain transparency obligations.

It was found that the EU also gave palm oil-based biofuel imported from Indonesia a less favorable treatment than similar products from EU origin or imports from third countries.

The Indonesian Trade Ministry said that EU would be forced to adjust their policy in order to comply with this ruling. Indonesia will also closely monitor the regulatory changes made by EU to ensure that they meet the WTO's recommendations.

The EU Embassy in Jakarta didn't immediately respond to a comment request.

(source: Reuters)