JAKARTA – The palm oil is not a newcomer in the global history of vegetable oils. It can be indicated by the fact that the palm oil has been used to meet a variety of human needs, from foods to oleo-chemical, and to renewable energy products.
Based on the report of Elaeis.co, the global per capita consumption of palm oil averaged at 17 pounds in 2015. Indonesia is one of the world’s main palm oil consuming countries, together with India, China, and countries of European Union (EU). Indonesia is also the world’s largest producer of palm oil with its average annual production at around 40 million tons.
But despite the fact, Time Toast reported that on 01 January 2007, the United Nations (UN) said that the palm oil production is the main cause of deforestation in Indonesia, where illegal loggings and planting of oil palm trees were common practices in 37 of 41 national parks. As a result, in April 2017, the EU parliament issued a resolution to gradually ban the use of biodiesel produced from palm oil.
The EU decided that transportation fuel in 2020 should be fulfilled from renewable energy sources, such as biodiesel. But EU banned the use of certain crops, including palm oil, as the raw materials to produce the biofuel and suggested that the preferred raw materials are soybean and rapeseeds.
Unfortunately, analysts saw the step taken by the EU will increase the prices of global foods and will harm the interest of the general public, especially those of low income ones. The EU ban against palm oil will hurt the livelihoods of oil palm smallholders. In Indonesia, the oil palm plantations involve more than 4.0 million smallholders, and employ more than 12 million workers along the supply chain.
The EU had also issued the delegated regulation, which is the implementing regulation of the Renewable Energy Directive II (RED II). The regulation sees palm oil as having the high risk of causing deforestation or Indirect Land-Use Change (ILUC). Then, the EU Commission also published the EU Journal, which said that the import of subsidized biodiesel from Indonesia is possible to cause material loss to EU industries.
As a result, the governments of EU had slapped import tariffs against eight biodiesel producers in Indonesia. The step has also complicated the position of Indonesia and other palm oil producing countries.
The Indonesian government has been continually approaching the EU with the aim to find a solution to the problem. The government has also filed a lawsuit against the EU discrimination at the World Trade Organization (WTO). (*)
Source: wartaekonomi.co.id | Featured image via Theborneopost.com