The World Trade Organization (WTO) has given Indonesia the go ahead to form a panel on its complaint against the European Union (EU)’s revised Renewable Energy Directive (RED II), the Jakarta Post reported on 3 August.
“It follows a number of trade actions that the EU has taken against Indonesian biodiesel, including the first iteration of RED, its illegal imposition of anti-dumping duties, and new countervailing duties that were introduced at the end of last year,” Palm Oil Monitor co-host Khalil Hegarty wrote in the Jakarta Post.
The EU published its revised RED II in December 2018, which covers the 2021-2030 period and comes into force on 1 January 2021. RED II includes specific criteria for high-risk indirect land use change (ILUC) biofuels.
In May 2019, the EU published the Delegated Regulation 2019/807, which determines what high-risk ILUC feedstocks are. These will be capped at 2019 levels until 2023, and then phased out by 2030. Only palm oil from large plantations has been classified as a high risk ILUC biofuel feedstock.
Palm oil’s biggest producer Indonesia challenged the regulation at the WTO in December 2019, claiming the EU’s restrictions were unfair.
In July, Malaysia, the world’s second largest palm oil producer, said it would be challenging the EU via the WTO’s dispute settle mechanism.
As a sign of solidarity, the country said it would act as a third party in Indonesia’s WTO case, The Straits Times reported on 1 July.
Together Indonesia and Malaysia produce 85% of the world’s palm oil.