JAKARTA – Based on the ministry of energy and mineral resources’ (MEMR) regulation (Permen ESDM) No.11/2019, the Indonesian government has prohibited the export of nickel ore as of 01 January 2020 as part of efforts to boost the expansion of the country’s local smelting industry.
Indonesia was the world’s largest exporter of nickel ore with a market share of 28 percent in 2019. In the European Union (EU), Indonesia was the second largest exporter of nickel ore to meet the need of the EU’s steel industry.
The data shows that EU is highly reliant on the nickel from Indonesia. Regarding the nickel export ban, the EU has filed a protest to the World Trade Organization (WTO) as it considers the Indonesian policy hurting its stainless steel industry.
It means that the EU has followed the step taken by Indonesian government that has filed a lawsuit against three policies of the EU, namely RED II ILUC, Delegated Regulation (DR) and French Fuel Tax at the WTO at the end of 2019.
The RED II ILUC and DR categorizes Indonesian palm oil as high risk indirect land use change (ILUC) and as a result it will gradually phase out palm oil as feedstock of biodiesel in EU until 2030.
The French Fuel Tax policy was applied by French government which excluded the palm oil based biodiesel from the tax tariff reduction scheme on production of renewable and sustainable biofuel, despite the palm oil used as feedstock derived from sustainable palm oil.
But the EU’s moves are contradictory and unfair. EU badly needs nickel from Indonesia, but it bans the use of palm oil in its region. In fact, nickel ores are non-renewable mining products. But palm oil is a renewable product which has the ability to preserve soil nutrients and hydrological function, save and conserve water, absorb carbon emissions, produce oxygen, and also reduce emissions through development of palm oil based biofuel.
EU asked Indonesia to keep exporting nickel ore to feed its steel industry which directly employs 30,000 workers and indirectly 200,000 workers. But, they forget that their discrimination of palm oil is potential to negatively affect the public welfare of 3.0 million workers under direct employment and 17 million workers under indirect employment in the palm oil industry.
“This has shown that the steps taken by Indonesia and the EU are just normal in defending their respective national interests. All countries involving in global trade should be in partnerships and cooperate in improving the governance (including sustainability aspect) to meet market preferences. But many policies or actions taken by the governments have hindered or even harmed the trading of certain products by utilizing certain issues to divert attention from the truth,” Palm Oil Indonesia said in a news story published in its website. (*)
Source: wartaekonomi.co.id
