PALMOILMAGAZINE, GENEVA – The European Union (EU) is required to adjust its palm oil-related policies following the final ruling in the trade dispute between Indonesia and the EU regarding palm oil and biofuel regulations (DS593: Indonesia – Palm Oil).
This decision was formally adopted during the regular meeting of the World Trade Organization (WTO) Dispute Settlement Body (DSB) and was made public on January 20, 2025, according to a statement from Indonesia’s Permanent Mission to the UN, WTO, and other international organizations in Geneva (PTRI Geneva) on Monday (25/2/2025).
The WTO panel report concluded that the EU had engaged in discriminatory practices by implementing policies that disadvantaged Indonesian palm oil-based biofuels compared to similar products such as rapeseed and sunflower oil produced in Europe.
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Additionally, the panel found that the EU failed to properly review the data used to classify palm oil-based biofuels as high ILUC-risk (Indirect Land Use Change risk). It also highlighted deficiencies in the criteria and certification procedures for low ILUC-risk biofuels under the Renewable Energy Directive (RED) II.
As a result, the EU is now required to revise its Delegated Regulation, which was found to be in violation of WTO rules.
“Based on the panel’s recommendations, the EU must adjust its policies to comply with WTO agreements, ensuring predictability and fair trade in the multilateral trading system,” said Indonesia’s Deputy Permanent Representative to the UN, WTO, and other international organizations, Ambassador Nur Rachman Setyoko, as quoted by Palmoilmagazine.com from Antara on Wednesday (26/2/2025).
Indonesia formally proposed the adoption of the panel report at the DSB meeting, reaffirming that the EU’s measures were inconsistent with WTO agreements. Throughout the panel process, Indonesia presented strong claims and substantial evidence proving that the EU’s policies violated international trade rules.
Indonesia successfully demonstrated that the EU’s justification—based on climate change, biodiversity, and moral concerns—was not directly related to its palm oil and biodiesel regulations. These arguments were unproven and contradicted the EU’s own statements during the proceedings.
“Indonesia is prepared for constructive dialogue with the EU to find the best solution through a mutually agreed implementation process. We will also closely monitor the implementation to ensure swift compliance,” Ambassador Setyoko added.
Russia, Brazil, and St. Vincent and the Grenadines (representing the Africa, Caribbean, and Pacific Group) expressed their support for Indonesia. They voiced concerns over restrictive trade policies and market access limitations targeting commodities from developing and least-developed countries under the pretext of environmental protection, as stated in PTRI Geneva’s official release. (P2)
