InfoSAWIT, GENEVA – The European Union is required to adjust its palm oil policies following the final ruling in the trade dispute between Indonesia and the EU regarding palm oil and biofuel policies (DS593: Indonesia – Palm Oil).
This decision was adopted during a regular meeting of the World Trade Organization's Dispute Settlement Body (DSB) and was circulated to the public on January 20, 2025, according to a release from the Indonesian Permanent Mission to the UN, WTO, and other international organizations in Geneva (PTRI Geneva) on Monday (February 25, 2025).
The WTO panel stated in its report that the EU has discriminated against Indonesian palm oil-based biofuels by implementing policies that disadvantage them compared to similar products like rapeseed and sunflower produced in Europe.
Additionally, the panel found that the EU failed to review the data used to classify palm oil biofuels as high ILUC-risk (indirect land-use change risk) and identified shortcomings in the application of low ILUC-risk certification criteria and procedures in the Renewable Energy Directive (RED) II.
As a result, the EU is required to adjust its policies in the Delegated Regulation deemed to violate WTO rules.
“Referring to the panel's recommendations, the EU must align its policies with WTO agreements to uphold predictability and fair trade in the multilateral trading system,” stated Deputy Permanent Representative II of Indonesia to the UN, WTO, and other International Organizations, Ambassador Nur Rachman Setyoko, as reported by InfoSAWIT from Antara on Wednesday (February 26, 2025).
Indonesia proposed to the DSB that the Panel Report be adopted, emphasizing that the EU's measures are inconsistent with WTO agreements. Throughout the panel process, Indonesia presented strong claims and evidence to support its argument that the EU's policies contradict international trade rules.
Indonesia successfully demonstrated that the EU's justifications regarding climate change, biodiversity, and morality are unrelated to the policies applied to palm oil and biodiesel. These assumptions remain unproven and contradict the arguments presented by the EU during the trial process.
“Indonesia is ready to engage in constructive dialogue with the EU to find the best solution through an agreed implementation timeline. Indonesia will also closely monitor the implementation of this policy to ensure swift compliance,” Ambassador Setyoko added.
Russia, Brazil, and St. Vincent and the Grenadines (representing the African, Caribbean, and Pacific group) also expressed support for Indonesia. They voiced concerns over restrictive trade policies and market access limitations targeting commodities from developing and least developed countries under the guise of environmental protection, as stated in the PTRI Geneva release. (T2)
