As Indonesia scores a palm oil ‘win’ over EU, what next for its big biofuel gamble?
Jakarta is celebrating the WTO ruling, but analysts warn demand and market access issues could stall hopes of progress for it – and Malaysia
While the WTO decision, announced on January 10, upheld the EU’s classification of palm oil-based biofuel as “high risk” due to its links to deforestation, it also criticised the bloc’s procedures, giving Jakarta a sliver of vindication in a dispute that has escalated into a clash over climate policy, trade and market access.
The WTO panel faulted the EU for inadequate transparency and insufficiently reviewing data to justify its “high risk” designation for palm oil-based biofuel. The panel also found that the EU had treated Indonesian products less favourably than similar biofuels from within the bloc – a point Jakarta seized upon to claim a partial triumph.
“This victory proves that Indonesia can fight and win against discriminatory practices,” said Indonesia’s chief economic affairs minister, Airlangga Hartarto, at a media briefing in Jakarta on January 17. He argued that the ruling validated the place of palm oil alongside other biofuels such as rapeseed and soybean.
The ruling stemmed from a 2019 complaint Indonesia filed against the EU, accusing the bloc of using environmental concerns as a pretext for protectionism.
