Indonesia retaliates against EU over palm oil ban

KUCHING:  The proposed European Union The Radio Equipment Directive (EU RED) Act to ban the use of palm oil as biofuel in EU countries by 2030 has provoked Indonesia to retaliate by limiting imports from EU countries including spirits.

This is seen as just the first step of more retaliatory acts by Indonesia to strike back at EU countries in the coming months and Sarawak Oil Palm Plantation Owners Association (Soppoa) fully supports the move by the Indonesian government to protect the palm oil industry and its people.

Indonesia is the world’s largest producer of palm oil and any move to ban it is a threat to the economy of the country as well as the millions of growers, millers, and associated businesses related to palm oil production in Indonesia, including revenue for the government.

File Photo: AFP

Malaysia has not yet taken any step against the EU proposed ban but the Prime Minister Tun Dr Mahathir Mohamad had earlier issued a warning to EU that trade ties could be affected, including declining to buy EU fighter jets and luxury cars, according to Soppoa in a media statement yesterday.

“The main reason why Malaysia and Indonesia are taking steps against EU is that the proposed ban on palm oil is not scientifically proven, a move to protect the oil seeds industry in EU and prevent competition from palm oil.

“Currently, the EU proposed ban on palm oil is based on questionable reports on unsustainable production and destruction of habitats; both these accusations are not scientifically proven and methodology used in the reports are not internationally acceptable as scientific models,” it added.

Soppoa equated the proposed ban to nothing more than a disguise to brand palm oil as bad oil which should not be used for biofuel feedstock in EU for biodiesel.

“What the report did not mention is that palm oil is the most productive, cheapest and readily available oil in the market and any substitution will surely result in greater land degradation, higher cost of production and greater poverty in Asia where smallholders will not be able to sell their palm oil,” it said.

Soppoa said it had also written to support the Prime Minister’s warning to EU on the proposed ban on palm oil for biofuel feedstock in EU countries as it was also against World Trade Organisation (WTO) rules.

The association warned that there would definitely be more such retaliatory measures being taken by other palm oil producing countries in the future should the proposed ban be adopted and trade between EU and Asian partners.

Soppoa said it should be clear to EU nations that the world’s population would still need affordable oil in the years ahead as population grows and majority of these people are in the Asean region.

The EU risk being isolated as a regional grouping with limited resources and purchasing power which will lead to their own downfall, it further cautioned.