Indonesia Secures WTO Victory Against EU’s Palm Oil Discrimination

JAKARTA, Investortrust.id – Indonesia’s long-standing battle against the European Union’s discrimination toward its palm oil commodities has reached a turning point. On Jan. 10, 2025, the World Trade Organization (WTO) issued a Panel Report concluding that the EU had acted unfairly and discriminated against Indonesian palm oil and biofuel.

“We won the WTO case on palm oil. This victory proves that Indonesia can fight and win. The case demonstrated that Europe discriminated against Indonesia’s palm oil and biodiesel. This decision compels the world to acknowledge that biodiesel from crude palm oil (CPO) should be treated equally alongside biodiesel from rapeseed, soybean, and other sources,” Coordinating Minister for Economic Affairs Airlangga Hartarto said at his office on Friday, Jan. 17, 2025.

The WTO determined that the EU failed to adequately evaluate data used to label palm oil-based biofuel as high ILUC-risk (Indirect Land Use Change) and found shortcomings in the criteria and certification procedures for low ILUC-risk biofuels under the Renewable Energy Directive (RED) II.

Additionally, the French'  Tax Incentive Relating to Incorporation of Biofuels (TIRIB), which grants tax incentives for transportation biofuels, was found to discriminate against palm oil-based biofuels, favoring rapeseed and soybean-based alternatives.

The WTO ruling will be adopted within 60 days and is binding for both Indonesia and the EU. The EU must align its Delegated Regulation policies with WTO rules. The ruling strengthens Indonesia’s opposition to the European Union Deforestation Regulation (EUDR), which the EU has delayed implementing until Dec. 30, 2025, signaling its unpreparedness.

Minister Airlangga emphasized the impact of the decision on Indonesia’s smallholders, who account for more than 41% of palm oil producers. The decision also presents an opportunity to strengthen bilateral strategies with Malaysia to prevent future discrimination against palm oil commodities.

“With this victory, I hope the lingering issues surrounding the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) can be resolved quickly,” Airlangga concluded.

Indonesia continues to advocate for fair treatment of its palm oil sector, a critical contributor to the country’s economy, while countering discriminatory policies that undermine its people and industries.