Palm oil producers step up action against EU policies

Southeast Asian palm oil producers are increasing their efforts against the EU to allow use of their product for biofuels mandates.

Indonesia is scheduled to lodge its second request to set up a panel at the World Trade Organisation's (WTO) next Dispute Settlement Body meeting on 29 July against EU proposals to phase out palm oil-based biofuels by 2030.

The request is almost certain to be accepted, unless all members at the meeting agree to reject it, which is unlikely given fellow palm oil producer Malaysia is supporting Indonesia.

Malaysia will file its own action against the EU through the WTO's dispute panel on similar grounds, as well as providing third-party support for Indonesia's claim. But it has given no timeline when this will be.

Both countries, which account for around 85pc of the world's palm oil production, say the EU's proposals amount to discrimination based on questionable scientific basis when it comes to indirect land use change (ILUC) calculations.

Malaysia is also increasing participation in its national certification scheme, which promotes better sustainability practices to counter claims against deforestation for palm oil production.

But the EU stands by its ILUC criteria to compensate for the environmental costs of vegetable oil harvesting.

By Amandeep Parmar