Palm oil: EU partially victorious at the WTO against Indonesia

Published 2025년 1월 11일

Tridge summary

Indonesia, the world's largest palm oil producer, has received a partial verdict from the World Trade Organization (WTO) in its dispute with the European Union (EU) over the latter's anti-palm oil biofuel policies. The WTO panel found some faults with the EU's procedures but essentially backed the EU, which argues that palm oil is unsustainable due to deforestation risks. The EU's 'Red II' directive excludes palm oil biofuel in its 2030 renewable energy targets, a move Indonesia contends is discriminatory and could impoverish farmers. The WTO panel has urged the EU to align its measures with international trade agreements. The decision, which can be appealed, comes after a similar ruling in favor of the EU in a separate dispute with Malaysia in March 2024.

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Original content

Indonesia, the world’s largest palm oil producer, secured the panel after announcing in December 2019 that it would sue the European Union at the World Trade Organization over the case. The panel “found broadly in favor of the European Union” but “found some shortcomings in the way the challenged measures were prepared, published and administered,” according to an official familiar with the discussions. The Europeans consider palm oil an unsustainable biofuel because of its impact on deforestation. As a result, under the “Red II” directive, the EU has ruled that palm oil biofuel will not count toward its 2030 renewable energy targets, which is likely to result in restrictions on its use. But Indonesia says the restrictions are discriminatory and risk pushing thousands of farmers into poverty. The WTO Dispute Settlement Body (DSB) panel of experts partially ruled in favour of the EU, but its report highlighted certain "deficiencies in the design and implementation" of the measures. ...

Source: TerreNet