European Union Tightly Regulates Palm Oil Trade

Doc. InfoSAWIT
European Union Tightly Regulates Palm Oil Trade

InfoSAWIT, JAKARTA – For being in big and attractive markets, such as, vegetable oil trade including palm oil, it makes many countries interest in European Union. But they have to follow every standard in the region. In the beginning, European Union conducts global norm setting but becomes global regulatory power.

The modal is 27 European Union member – single market with about 516 million men, the second biggest gross domestic product (GDP) in the world for about US$ 17 billion and GDP per-capita for about US$ 40.900, gross national income share for more than 20%, and the second biggest goods and service importer.

At this time, European Union published a policy that threatens trade activity, which is, European Green Deal (EGD). It is the agreement among the members to realize net zero emission in 2050. It was summarized in Fit for 55 which is the implementation regulation from EGD in 13 proposals of package policy (8 policy revisions and 5 new policies) to realize emission reduction up to 55% in 2030. The policy could have something to do with many sectors, including palm oil.

Some countries that have connection with Europe will be threatened. They prepared to sue it to World Trade Center. “This will be interesting. Just like other countries, Indonesia will get the impacts from EGD,” Indonesian Ambassador for Brussel, Andri Hadi said in a webinar that InfoSAWIT joined in the midst of September 2021.

The policy also urged palm oil trade to be the same with European Union Forest Strategy that regulates traceability from upstream to downstream sectors. It will be too to ‘green products’. European Union will closely regulate every condition if commodities categorized as forest and ecosystem risk are about to be sold in the continent.

Deforestation issue is Indonesia’s palm oil trade obstacle. “Economic activity and investment in Europe should be free from deforestation, environment, and human rights,” he said.

Though palm oil attacks are clearly happening, there is dichotomy between palm oil as food product and energy product. The obstacle is to palm oil biodiesel.

“But they still import palm oil to fulfill their food needs. This happens for other vegetable oils, such as, rapeseed, soya, sunflower will never substitute palm oil. I believed it,” he said.

Source: InfoSAWIT October 2021