JAKARTA – The Indonesian government has been asked to prepare retaliation policy against the products of European Union (EU) as a response to the application of EU deforestation-free regulation (EUDR), which obstructs the trading of Indonesia’s palm oil in EU market.
Agribusiness Expert and the Palm Oil Agribusiness Strategic Policy Institute (PASPI) Executive Director Tungkot Sipayung said that despite the fact that the EU market is only the third or fourth largest export market of Indonesia’s palm oil, the EUDR has developed a negative image of palm oil that could negatively affect other countries or regions in the long term. “Currently, the EUDR has been used by global traders to press down the price of crude palm oil,” he said.
Tungkot said that in dealing with such condition, all palm oil stakeholders should be united in taking all necessary steps against the regulation. “The government should be more assertive in rejecting the EUDR as it is contradictory to the fair trade principles set by the World Trade Organization (WTO). Second, the government needs to prepare a retaliation policy against the products of EU imported to Indonesia with the argumentation of embodied carbon emissions,” Tungkot said in Jakarta on Wednesday, 07 June 2023.
He also said that Indonesia needs to gradually prepare an exit strategy from the EU market by diversifying its export markets to other countries or other regions, such as Africa, Eastern Europe, Central Asia, South Asia, and East Asia. Besides, the government also needs to increase domestic absorption of palm oil by optimizing the implementation of B35 mandatory program, partially realizing the B40 program, and pushing up other diversifications in the downstream palm oil sector.
“ASEAN and CPOPC (Council of Palm Oil Producing Countries) need to adopt a joint program, such as mandatory biodiesel 30% (B30) program, substitution of petrochemical imports with the oleochemical in ASEAN and among member countries of CPOPC,” he said.
He further said that all related palm oil stakeholders should be more intensive in educating the public to strengthen the palm oil image and counter the negative issues against palm oil as a result of the EUDR at domestic and global markets.
“In addition to that, Indonesia should further improve productivity, efficiency and increase certification of sustainability to increase competitiveness and positive image at international market,” said Tungkot.
Due to the application of the EUDR, Indonesian exporters of palm oil have to have certifications that prove that their products do not cause deforestation or damage environment. Besides palm oil, other products that are blocked by the EUDR are rubber, beef, and forestry products. The EUDR was approved last month and it will be effective in the next 18 months or in December 2024. (*)
Source: Bisnis.com
