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Amid trade spat with EU, Indonesia’s palm oil finds silver lining in biofuel, China
President Joko “Jokowi” Widodo has asked stakeholders to speed up the mandatory proportion of diesel blended with crude palm oil (CPO) from 20 (B20) to 30 percent (B30) by January next year, and 50 percent (B50) by the end of 2020, hence pushing up the domestic use of palm oil.Coincidentally, China will remove import tariffs for palm oil in a move that will open up new markets for Indonesian palm oil.
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A worker gathers oil palm fruit bunches at a plantation in Lampung. Indonesia and Malaysia, the first- and second-largest palm oil producers, have threatened to challenge the European Union via the World Trade Organization if the EU continues to phase out palm oil from transportation fuel. (The Jakarta Post/R. Berto Wedhatama)
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s Indonesia, the world’s top palm oil producer and exporter, commits to fighting the European Union’s (EU) ban on the use of palm oil for its member countries’ biodiesel, it may find solace near home.
President Joko “Jokowi” Widodo has asked stakeholders to speed up the mandatory proportion of diesel blended with crude palm oil (CPO) from 20 (B20) to 30 percent (B30) by January next year, and 50 percent (B50) by the end of 2020, hence pushing up the domestic use of palm oil.
Coincidentally, China will remove import tariffs for palm oil in a move that will open up new markets for Indonesian palm oil.
“We need to anticipate pressures on CPO [by driving up] domestic demand and so that we can have good bargaining positions, whether with the European Union or other parties that try to weaken our bargaining position,” President Jokowi told a press briefing on Tuesday.
Palm oil, a top plantation contributor for tropical Indonesia, is a significant foreign exchange revenue generator for the country and has contributed around 1.5 to 2.5 percent to gross domestic product. Smallholder palm oil farmers account for more than 3 million hectares of land in the country.
The European Commission decided in March to completely phase out the use of palm oil by 2030 as it is considered a high-risk vegetable oil over deforestation concerns, sparking a trade spat between the EU, one of the world’s top importers of palm oil, and producing countries Indonesia and Malaysia.
During a bilateral meeting in Malaysia last week, President Jokowi and Malaysian Prime Minister Mahathir Mohamad agreed to “fight against palm oil discrimination”, Indonesian Foreign Minister Retno LP Marsudi said.
