WTO panel backs EU in palm case against Indonesia

The World Trade Organization panel ruled in favor of the European Union in the case filed by Indonesia on Friday against the bloc's ban on biofuels based on palm oil.

Indonesia, the largest palm oil producer in the world, took the case before the WTO after the EU concluded palm oil cultivation leads to excessive deforestation, and shouldn't count towards its renewable energy target.

Palm oil-based diesel was not considered a biofuel, and its use as a transport fuel was effectively phased out from 2023 to 2030.

Indonesia claimed that the measures unfairly target Southeast Asian palm oil manufacturers.

The panel of three people ruled that EU's measures to reduce greenhouse gas emissions were legitimate, and that EU had a valid basis for designating biodiesel made from palm oil "high-risk".

The panel found fault with the EU's preparation, publication and administration of its measures. For example, it did not conduct a timely analysis of data in order to determine high risks and failed to meet certain transparency obligations.

The EU also gave palm oil-based biofuel imported from Indonesia a less favorable treatment than similar products from the EU or from other countries.

Malaysia, the second largest producer in the world, presented a similar challenge at the WTO 2021.

In addition to the free trade talks between the EU and Indonesia, there are a number cases that remain unresolved before WTO. These include Indonesian restrictions on nickel ore and EU duties on biodiesel, stainless steel and biodiesel from Indonesia. (Reporting and editing by Paul Simao; Philip Blenkinsop)

(source: Reuters)