Indonesia seeks suspension of concessions against EU in palm oil dispute

2026-03-07 - 13:33

The EU has deemed that the production of palm oil is not sustainable. (Bloomberg pic) JAKARTA: Indonesia will file for a suspension of concessions against the EU at the World Trade Organization’s dispute settlement body over a palm oil case, the trade minister said Saturday. The move was taken after the 27-member bloc failed to meet a deadline to adjust its policy based on the WTO body’s ruling and recommendation in a palm oil dispute case, the trade ministry said in a statement. WTO experts in January 2025 largely upheld EU restrictions on the use of palm oil in biofuels following complaints by Indonesia. Trade minister Budi Santoso said the suspension of concessions would be focused on goods, but added Indonesia was “open” to asking the dispute settlement body permission to apply the measure to other sectors. “We will ensure that the losses are accurately calculated and the case is handled effectively while simultaneously maintaining bilateral relations with the EU,” Budi said in a statement. The dispute concerns the EU Renewable Energy Directive of 2018 (RED II), which limited the eligibility of crop-based biofuels to count towards member states’ renewable energy targets, and phased out the eligibility of palm oil-based biofuels altogether by 2030. The EU has deemed that the production of palm oil is not sustainable. Indonesia took the move to safeguard its rights in the future if the EU could not adhere to the WTO panel’s ruling, Budi said. He did not specify which obligations the EU had failed to comply with. Suspension of concessions is a temporary trade sanction which, under the WTO dispute settlement body, can be filed against another WTO member to enforce compliance with a dispute ruling. Indonesia, the world’s leading producer of palm oil, in 2019 requested an expert panel review of the EU restrictions.