Indonesia, Netherlands Agree to Seek Win-Win Solution on Palm Oil

04.07.2018

Indonesia and the Netherlands will continue to work together to address the European Union's biofuel ban, which has placed the Southeast Asian country's palm oil exports at a disadvantage, Foreign Minister Retno Marsudi said after a meeting with her Dutch counterpart, Stef Blok, in Jakarta on Tuesday (03/07). (Antara Photo/Aprillio Akbar)

Jakarta. Indonesia and the Netherlands will continue to work together to address the European Union's biofuel ban, which has placed the Southeast Asian country's palm oil exports at a disadvantage, Foreign Minister Retno Marsudi said after a meeting with her Dutch counterpart, Stef Blok, in Jakarta on Tuesday (03/07).

It is imperative for Indonesia, the world's largest palm oil producer, to have its interest in the commodity reflected in the final outcome of a comprehensive economic partnership agreement with the European Union, which is currently being negotiated, Retno said.

"One of the largest components of Indonesian exports to the Netherlands is palm oil, therefore I brought the issue of discrimination against palm oil to the attention of Minister Blok," Retno told reporters after the meeting.

The European Commission, European Parliament and the Council of the European Union recently agreed to start limiting the consumption of biofuels, bioliquids and biomass fuels produced from food or feed crops with high indirect land-use change by 2019 and phase it out completely by 2030.

The agreement, approved on June 14, aims to increase renewable energy use in the European Union as part of the bloc's fight against climate change.

"[We] remain very concerned about a high potential risk of discrimination; the draft stipulates that it will use indirect land-use change as a criteria, which reflect a more European view than an internationally accepted one," Retno said.

A study by the International Union for Conservation of Nature (IUCN) released last week also concluded that a ban on palm oil would shift, rather than stop the loss of global biodiversity.

Vincent Guérend, the EU ambassador to Indonesia, said in a statement that the agreement "will not single out, nor ban palm oil."

"The EU is and remains the most open market for Indonesian palm oil," he said.

During their meeting on Tuesday, Retno and Blok discussed ways Indonesia and the Netherlands can continue working together to address the palm oil issue and find a win-win solution.

Indonesia seeks to conclude its negotiations with the European Union on a comprehensive economic partnership agreement soon but emphasized that the deal must reflect both parties' interests.

"Indonesia and the European Union are now negotiating a comprehensive economic partnership agreement with the hope that it could be concluded soon. As with any other negotiation, the negotiation on the agreement must consider the interests of both parties, including Indonesia's interest in palm oil," Retno said.

Total trade between Indonesia and the Netherlands increased by around 27 percent last year to more than $5 billion, making it the Southeast Asian country's second-largest trade partner in Europe after Germany.

The trade balance was also well in Indonesia's favor with a $3 billion surplus. The Netherlands was Indonesia's seventh-largest investor last year, with investments worth $1.49 billion in 871 projects.


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