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com/news/articles/2019-03-20/indonesia-threatens-to-ban-european-
goods-as-palm-row-escalates
Indonesia threatened to ban imports of some goods from the European Union in retaliation for
the bloc’s move to impose stricter limits on how palm oil can be used in green fuels.
The world’s largest palm oil producer is considering such a step to protect the interest of almost
20 million people, whose livelihood is tied to the commodity, Indonesia’s Coordinating Minister
for Maritime Affairs Luhut Pandjaitan told reporters in Jakarta on Wednesday. The minister
hinted that jets manufactured by European companies could be among the target for boycott,
saying the country would require about 2,500 aircraft in the next two decades.
“There are a lot of European products that we need,” Pandjaitan said. “We have 269 million
people in Indonesia. We have a big market.”
Palm oil has emerged as a flashpoint in a potential trade war between the European Union and
top producers Indonesia and Malaysia, which together account for about 85 percent of global
supply. The European Commission last week restricted the types of biofuels from the vegetable
oil that may be counted toward its renewable-energy goals. The proposed EU curbs have
weighed on benchmark palm prices, which have fallen for five quarters in a row.
Malaysia says EU’s ‘high risk’ ruling on palm oil shows double standard
Indonesia is also planning to lodge a formal protest with the World Trade Organization if the
European Union ratifies the proposal, Coordinating Minister for Economic Affairs Darmin
Nasution said. Palm oil was not just an export earner for Indonesia as it was instrumental in
lowering poverty and therefore meeting a key criteria of the sustainable development goals, he
said.
Scrutiny Period
The EU argues the new measure and palm-oil sustainability criteria are compatible with WTO
rules. The new regulation is now set for a two-month scrutiny period when the bloc’s member
states and the European Parliament can express objections. If none is received, the measure will
be published in the EU official journal and become a law.
The EU renewable energy law obliged the commission last year to set sustainability criteria for
palm under its green goals. It specifies that the use of unsustainable food and feed crop-based
biofuels should be limited from 2019 and a gradual phase-out should start in 2023, leading to a
ban by 2030.
“We are concerned that this discriminatory act will surely affect the long-standing bilateral
relationship between Indonesian and the EU, and further delay the conclusion of the Indonesia-
European Union Comprehensive Economic Partnership Agreement,” Nasution said in a
statement.
Deforestation
A wildlife reserve in South Aceh being being cleared for a new palm oil plantation in March
2018.
The move was required by a broader law agreed by the 28-nation bloc last year, when the
European Parliament pushed for curbs on the use of palm oil on concerns its production caused
deforestation and aggravated climate change.
The EU wants to lead the battle against global warming and has toughened goals to reduce
greenhouse gases blamed for climate change. It aims to cut emissions by at least 40 percent by
2030 compared with 1990 levels, boost the share of renewable energy to 32 percent and increase
energy efficiency by 32.5 percent.
Indonesia will continue to collaborate closely with other palm oil producing countries as well as
the Association of Southeast Asian Nations framework to promote palm sustainability and
establish a common position against the discriminatory action of the European Commission,
Darmin said.
Palm oil exports fetched Indonesia $17.8 billion last year and the industry contributes about 3.5
percent to the nation’s gross domestic product, according to official data.