Indonesia is doubling down on its palm-oil biofuel ambitions, framing a recent World Trade Organization ruling as a “win” in its battle against European Union restrictions.
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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.
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