JAKARTA – Indonesia has filed a lawsuit at the World Trade Organization against European Union policies affecting the export of biofuels made from palm oil, authorities announced on Monday.
Jakarta opposes the EU’s phasing out of the use of palm oil-based biofuel by 2030.
According to European reports, the move is linked to massive deforestation in the Asian country.
Wisnu Wardhana, Indonesia’s Trade Ministry’s foreign trade director-general, said the ban does not only affect palm oil exports but also presents products derived from the material in a bad light across global markets.
On Dec. 9, the Indonesian government filed a complaint at the WTO, the first step before filing legal action, Trade Ministry sources told EFE.
The ministry challenged levies imposed by the EU last week of between 8-18 percent on imports of subsidized biodiesel from Indonesia.
The measure seeks to restore the level playing field for biodiesel producers, according to the European Commission.
According to the EU’s Renewable Energy Directive – which entered into force in May – palm oil was classified as one of the lesser sustainable alternatives for biofuel production compared to crops grown in Europe such as soy and rapeseed.
European policies against palm oil – one of the major exports of Indonesia and driving force of the economy in large part of its rural areas – have led to diplomatic tensions between Brussels and the Asian country.
Indonesia has threatened to take retaliatory measures targeting European businesses and goods.
European alcoholic beverage and dairy products sectors in Indonesia have already felt the pinch, industry sources told EFE.
Last year, the EU was the second-largest palm oil export destination according to Oil World data and nearly half of it was used as biofuel, while the other uses include consumption in food products, cosmetics and hygiene or cleaning products.
Accounting for over 50 percent of global production, Indonesia is the biggest palm oil-producing country followed by Malaysia which is also planning to take its concerns to the WTO.