Indonesia prepares for upcoming palm oil suit trial at WTO

Indonesia prepares for upcoming palm oil suit trial at WTO

Director General of Plantation at the Agriculture Ministry Kasdi Subagyono (ANTARA/Subagyo).

The Trade Ministry is coordinating (the strategy) to face the trial. We only prepare technical data related to production. In principle, we are ready for the trial at the WTO next week. We have finalized the preparations.
Jakarta (ANTARA) - Indonesia’s government is readying data to face the trial of a lawsuit it filed at the World Trade Organization (WTO) against the European Union (EU) next week over the bloc’s restrictions on palm oil-based biodiesel.

Director General of Plantation at the Agriculture Ministry Kasdi Subagyono stated on Monday that the Agriculture Ministry and Trade Ministry had unitedly decided on a strategy to face the trial next week after the Indonesian government, through the Indonesian permanent representative in Geneva, had officially filed the lawsuit at the WTO against the EU on December 9, 2019.

"The Trade Ministry is coordinating (on the strategy) to face the trial. We only prepare technical data related to production. In principle, we are ready for the trial at the WTO next week. We have finalized the preparations," he remarked at a hearing with the House of Representatives’ (DPR’s) Commission IV.

The Indonesian government has filed a lawsuit at the WTO against the EU over Renewable Energy Directive II (RED II) and Delegated Regulation EU policies that discriminate against Indonesian palm oil.

The lawsuit mirrors the Indonesian government's resoluteness and commitment to challenging the EU's unfair restrictions and discrimination against palm oil through RED II and Delegated Regulation policies

Through the RED II, the EU will only allow the use of fuels from renewable energy between 2020 and 2030.

The Delegated Regulation that constitutes the implementation regulation of the RED II categorizes palm oil into the group of commodities with Indirect Land Use Change (ILUC) of high risk.

Hence, palm oil-based biofuel is not incorporated into the renewable energy target in the EU.

Subagyono is optimistic that Indonesia would win the trial since the EU Commission does not use basic data from the Indonesian government.

The EU Commission on Monday, December 9, 2019, set duties on the import of Indonesian biodiesel fuel, from eight to 18 percent, akin to the provisional tariff proposed by the EU in August 2019.

Related news: Palm oil dispute should not damage Indonesia's relations with EU

"We must draft it (the strategy) first to see what we are going to sue and how the mechanism is. I cannot reveal the strategy for biodiesel now," Secretary General of the Trade Ministry Oke Nurwan remarked on the sidelines of a gathering to mark five years of the trade law in Jakarta recently.

The Indonesian government had earlier planned to levy retaliatory tariffs on the import of milk and its derivatives from the EU.

However, the government will be adopting the formal channel route in line with the trade dispute rules of the World Trade Organization (WTO), Nurwan stated.

The EU is determined to impose anti-subsidy import duty on Indonesian biodiesel over suspected subsidy viewed as being detrimental to the EU’s producers.

The European Commission has forecast that the biodiesel market in the EU would touch €nine billion, or US$10 billion. Indonesia supplies biodiesel worth an estimated €400 million to the EU.

In its press statement released by the European Commission, the EU leveled accusation against Indonesia of selling biodiesel fuels at lower prices. Related news: Indonesia preparing lawsuit against EU for import duties on biodiesel

Related news: Indonesia is influencer among nations to use biodiesel fuel


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