RI optimistic about winning palm oil lawsuit at WTO

This article has been translated by PwC Indonesia as part of our Plantation News Highlights service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily

2 November 2022

Jakarta – The Indonesian government is optimistic about winning the lawsuit against the Renewable Energy Directive (RED) II policy implemented by the European Union (EU) at the World Trade Organisation (WTO). The policy is reckoned to be discriminative and unfair to the Indonesian palm oil industry. “We must be optimistic that Indonesia has an opportunity to win the lawsuit. However, we are also anticipating an appeal from the EU if Indonesia wins the lawsuit,” Plantation Agribusiness Development Deputy Assistant of the Coordinating Ministry for Economic Affairs Moch Edy Yusuf said.

According to him, the implementation of the RED II policy by the EU that has been implemented since December 2018 is discriminative towards Indonesian palm oil products and can decrease exports to the EU that can affect the welfare of palm oil farmers. In the RED II policy, the EU limited and categorised palm oil-based biofuel as a high ILUC (indirect land use change) risk as it can significantly expand lands with high carbon to production areas.

The EU is also enforcing palm oil-based biofuel ban in stages until 2030, which is known as Phase Out 2030. The EU also has also set the use of food and feed crops-based energy for transportation to not surpass 7% since 2020. Edy affirmed that the RED II policy, regarding palm oil, was not based on a scientific study and did not have scientific proof. Indonesia is currently waiting for the lawsuit report that will be issued in late 2022 or early 2023.

He also explained that the Indonesian government had anticipated various scenarios that could happen from the decision made by WTO and the steps that would be taken by the EU. “Indonesia must continue to anticipate the lawsuit result. The Indonesian government will immediately determine their step to appeal or not appeal the panel’s recommendation and decision,” Edy explained on Tuesday (1/11/2022).