Indonesia threatens to challenge EU at WTO in palm oil feud
The government has threatened to bring its palm oil dispute with the European Union to the World Trade Organization's Dispute Settlement Body (DSB) if the EU proceeds to treat palm oil as a high-risk vegetable oil in its latest delegated act.
"Should this delegated act be adopted, Indonesia will take legal action at the WTO to challenge the EU (through the DSB)," Peter F. Gontha, an expert staff member at the Foreign Ministry, told a press conference on Friday evening.
The delegated act, EU Directive 2018/2001, a derivative of the EU’s Renewable Energy Directive II (RED II) concerning biofuels, categorizes palm oil as a vegetable oil posing a higher risk of deforestation than soybean, rapeseed or sunflower oil.
The delegated act is currently under review at the European Parliament, which has a deadline of May 12 for the deliberation. If it is passed, it would cap the consumption of high-risk vegetable oils, including palm oil, in the EU and slowly phase them out to zero by 2030.
Coordinating Economic Minister Darmin Nasution, who led an Indonesian delegation to Brussels earlier this week to discuss the matter with EU representatives, has confirmed the plan.
Darmin acknowledged that the EU's move, as a nontariff measure, would be harder to challenge at the WTO, but he said it was "nonetheless something Indonesia must do”.
“We have communicated to the EU precisely that this is a discriminative, double-standard and protectionist act [...] and that we will review our relationship with the EU if they carry on [categorizing palm oil as high-risk]," Darmin said at the press conference.