Palm Oil Producers to Oppose EU’s RED II

Palm oil producers together with the government and stakeholders held a meeting to discuss their objection to European Union’s policy on Renewable Energy Directive (RED II). They agreed to oppose the policy as it would likely discriminate against palm oil in the EU market.

According to Chairman of Indonesian Palm Oil Association (Gapki) Joko Supriyono, Indonesia intends to bring the case to WTO, arguing RED II will unfairly target palm oil. Indonesia will have to respond to the policy on 8 March 2019 at the latest.

“We have responded that we have objections to the concepts adopted in the Delegated Act,” Joko said after a meeting with Coordinating Maritime Affairs Minister Luhut Binsar Panjaitan in Jakarta, Tuesday (26/2/2018), as reported by Katadata.

Another meeting was also held at the office of Coordinating Ministry for Economic. Director General of International Trade at Ministry of Commerce Oke Nurwan said RED II would discriminate against palm oil so that all palm oil producers in CPOPC need to consolidate.

Oke added that palm oil producer countries have agreed to address various challenges at the WTO’s dispute settlement body. “We have raised objections to RED II,” Oke said.

The EU adopted RED II which mandates levels of renewable energy use within the European Union. In RED II, the overall EU target for Renewable Energy Sources consumption by 2030 has been raised to 32%. RED II will be accompanied by Delegated Act that initially scheduled to be published on 1 February 2019.

The Commission has now published its draft Delegated Act for consultation. The Delegated Act is a central piece in the regulatory framework to establish which biofuels should count towards the targets established in the RED II. Biofuels that are considered to have a high risk for indirect land use change (ILUC), however, will no longer be able to count toward the EU’s renewable energy goals starting in 2030.

There are several EU models for ILUC that have been proposed none of which, nor could provide definitive evidence that would allow for a clear distinction between high and low risk ILUC. The method used to assess ILUC, which aims to measure the risk of unintended carbon emissions, was not internationally recognised and not applicable in a tropical region.

However, palm oil is associated with high land use change emissions and negative climate impacts. The Council of Palm Oil Producing Countries (CPOPC) is of the view that the use of ILUC to target palm oil would represent a basic violation of the non-discriminatory principles upon which the WTO multilateral system is based. CPOPC is also of view that any related EU regulation or decision would likely constitute a Technical Barrier to Trade. **

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