The European Union (EU) Commission issued a Supplementing Delegated Regulation Directive 2018/2021 of the EU RED which prohibits the use of crude palm oil (CPO) as a source of biofuels in the region recently. They gave excused that oil palm cultivation had caused excessive deforestation. That is why the use of CPO for transportation fuels must be eliminated.
Indonesia and Malaysia immediately reacted strongly to this discrimination policy from the EU. The Coordinating Minister for Maritime Affairs, Luhut Binsar Panjaitan, stated that facing a trade war launched by the EU, the Indonesian government was ready to fight it out, all of cost.
Various steps of retaliation are being prepared by the Indonesian government in addressing EU discrimination. Coordinating Minister Luhut even loudly stated that Indonesia was ready to exit the Paris Agreement.
“When talking about the environment, the US also comes out from climate change. We are a firm because this is a national interest. President Jokowi on the Solo said that is firm,” said Coordinating Minister Luhut at Ayana Midplaza Hotel, Jakarta, Wednesday 3/2019).
The Paris Agreement is an agreement of the United Nations Framework Convention on Climate Change (UNFCCC) regarding mitigation of greenhouse gas emissions, adaptation and finance. This agreement legally binds at least 51 countries in the world.
Minister Luhut’s strong statement was immediately responded to by strong criticism from the non-governmental organization Wahana Lingkungan Hidup Indonesia (Walhi). They considered Luhut’s attitude similar to President of the United States (US), Donald Trump. Walhi also asked President Jokowi to reprimand one of his assistants because it was considered to exceed his authority.
Indonesia’s strong attitude towards EU discrimination policies towards palm oil is a form of accumulated disappointment. So far the EU has driven Indonesia with a standard policy on the Roundtable of Sustainable Palm Oil (RSPO) and Indonesia Sustainable Palm Oil (ISPO). Without RSPO and ISPO standards, Indonesian CPO will not be able to enter the European market.
Unfortunately, the standard provisions only apply to palm oil, while vegetable oils such as soybeans, rapeseeds, and sunflower seeds can be freely traded without certain standardization.
Speaking of deforestation and indirect land use (ILUC), based on the results of the study of the International Palm Oil Task Force of the Union for Conservation of Nature (IUCN) it was revealed that other vegetable oil commodities require nine times the land area compared to oil palm. The total land area of four commodities of world vegetable oil producer (soybean, palm oil, and sunflower) is 200.5 million hectares in 2016.
Soybean plantation land is in the top position with an area of 121 million hectares or 61% of all land, but only produces 53 million tons of oil or one third of world vegetable oil production. Compare this with palm oil, on an area of 20 million hectares it can produce 65 million tons or 40% of world vegetable oil production. Palm oil efficiency is nine times seen in production per hectare per year, palm oil 4.27 tons, rapeseed 0.69, sunflower 0.52 tons, and soybeans 0.45 tons.
In accordance with the Sustainable Development Goals (SDGs), the first point is to reduce poverty and hunger. Indonesia now has 20 million workers in the palm oil sector and 2.3 million farmers of palm oil.
The palm oil industry is proven to be able to reduce poverty and move the economy in remote areas throughout Indonesia. Therefore, it is impossible for the Indonesian government not to fight because the government’s obligation is to defend its people.