Indonesia prepares steps in response to EU's biofuel phase-out plan

Indonesia prepares steps in response to EU's biofuel phase-out plan

Trade Minister Enggartiasto Lukita talks to reporters on Indonesia's CPO exports. (Fransiska Ninditya)

Jakarta, (ANTARA News) - Indonesia is preparing steps in response to the European Union`s (EU`s) plan to phase out the use of palm oil-based biofuel energy that will affect palm oil-producing countries.

Indonesia, as the world`s largest producer of crude palm oil (CPO), has called on other CPO-producing nations, such as Malaysia and Ghana, to outline a strategy in the face of the EU`s phase-out plan.

CPO producers believe that the European Parliament`s resolution, signed on January 17, 2018, to phase out biofuel made from palm oil in 2021, is discriminatory, as it singles out palm oil from other food crops.

According to Siswo Pramono, head of the Research and Policy Development Board (BPPK) of the Ministry of Foreign Affairs, Indonesia is making several preparations in the face of the EU`s plan, including establishing the Council for Palm Oil Producing Countries to foster a development strategy among oil-producing nations.

The Indonesian government is calling on its Malaysian counterpart to continue negotiating with the Parliament of European countries to annul the ban on CPO.

The governments of Indonesia and Ghana have also agreed to cooperate to fight the negative campaign on the palm oil commodity.

"I have met the vice minister of agriculture and food of Ghana. We discussed about several negative campaigns against palm oil. Palm oil-producing countries should unite against negative campaigns," Minister of Foreign Affairs Retno Marsudi had noted in Bali last week (April 11).

In essence, Indonesia is currently ready to face EU`s palm oil-based biofuel phase-out plan. The Indonesian government is also seeking new markets, increasing domestic absorption, and managing the existing markets.

"Palm oil is the main export commodity for Indonesia. Indonesia`s main markets are India, China, and Pakistan. These are the largest markets," Pramono of the Foreign Ministry`s BPPK noted.

Yet, Indonesia continues to call on the European Union to cancel its plan to implement the policy that is viewed as being discriminatory.

Vice President Jusuf Kalla has warned the EU to not impose a discriminatory policy.

"Do not discriminate against (Indonesia`s CPO), as we can also adopt the same policy. We warn Europe that we are one of their biggest buyers of Airbus aircraft, for instance, Garuda, Lion Air, and others," Kalla noted in Jakarta on Wednesday (Apr 11).

He reiterated that Indonesia could halt imports from European countries if the ban on CPO as motor fuel will be continued.

Trade Minister Enggartiasto Lukita also affirmed that Indonesia will stop importing commodities from European nations if the parliaments of these countries insist on halting Indonesia`s CPO exports.

"If they ban CPO, I will also tell Norway to not export their fish to Indonesia as well as the purchase of aircraft, such as Airbus and Boeing," he noted after meeting Kalla at the Vice President`s Office on Monday (April 9).

Lukita further pointed out that Indonesia was in a good bargaining position with European countries with regard to CPO since in some European courts, Indonesian CPO was reserved for sale in the country.

However, according to Kalla, the government has continued negotiations to facilitate trade cooperation with EU countries to boost economic growth.

"We have a meeting on the free trade agreement between Indonesia and the EU," he added.

Lukita said he will set up a negotiation team for trade, especially on the CPO import policy in Europe. Indonesia will urge Malaysia, as another major producer of palm oil, to join the negotiation process.

Moreover, the Indonesia-EU Bilateral Group delegation has sought the European Parliament`s attention over its resolution to phase out palm oil-based biofuel in 2021.

Nurhayati Ali Assegaf, chief of the Indonesian parliamentary delegation, stated at a meeting with the delegation from the countries of Southeast Asia (DASE), European Parliament`s Committee on International Trade, and European External Action Service that palm oil was the main driver to overcome poverty, create jobs, balance inequality, and boost the country`s economic growth in Indonesia in line with the principles of sustainable development goals (SDGs).

Indonesia raised the issue with the EU and is optimistic that the EU would support the efforts to achieve the MDGs. Assegaf pointed out that palm oil was linked to the livelihoods of some 50 million people, who are mostly smallholder farmers.

Thus, palm oil plays an important role in the government`s efforts to achieve the SDGs. This is part of Indonesia`s efforts to achieve the SDGs. It has to preserve the environment while helping farmers break free from the shackles of poverty.

Assegaf noted that the Indonesian government had, so far, already taken preventive measures to ensure sustainability and strengthen law enforcement, and since 2015, the country had successfully prevented forest fires through preventive measures.

In response, DASE Chair Werner Langen noted that the European Parliament`s resolution was not yet final, and the negotiation process between the European Parliament, European Commission, and European Council was still underway.

He expressed hope that Indonesia would provide relevant data and information on palm oil, as it has, so far, been viewed as an unsustainable and environment-unfriendly product.