The Palm Scribe

Indonesia prepares for negotiations with EU on ILUC and Deforestation

Indonesia is currently preparing its formal position for discussions with the European Union regarding the Indirect Land Usage Conversion (ILUC) criteria and deforestation, two issues used by the regional organization to base its decision to gradually phase out palm oil-based biofuels from its renewable energy program.

Joko Supriyanto, Chairman of the Indonesian Association of Palm Oil Producers (GAPKI) said that the Coordinating Ministry for the Economy has formed a team of experts to work and produce a short study of data on ILUC and Deforestation.

“It looks like it is almost completed. So, this study by the expert team will become material for discussions with the EU,” Joko said on the margin of a luncheon organized by the Jakarta Foreign Correspondent Club in Jakarta recently (17/9).

He said that the team, headed by Musdalifah Machmud, Deputy to the Coordinating Minister for the Economy, and comprised of academics and experts both from Indonesia and overseas.

“All these (studies) will then be consolidated so that it will become an Indonesian position on deforestation and ILUC,” he said.

Indonesia and Malaysia, the world’s top palm oil producers which account for some 85 percent of global supply, have criticized the European Union’s use of ILUC in formulating policies in its Renewable Energy Directive II arguing that ILUC was not an internationally-recognized and tested parameter and was only used by the European Union and the United States.

Officials in Indonesia have also said that the use of the ILUC criteria could keep Indonesian palm oil biodiesel out from Renewable Energy Directive II and literally close the European Union market to the commodity. Such moves, Jakarta said, would be in contravention of the international rules and agreements, including those of the World Trade Organization (WTO).

The European Commission is currently working on criteria that would classify as either high risk or low risk, for ILUCs. This is where Indonesia’s concern lays, with officials pointing out the under such classification, Indonesian palm oil would come as a high ILUC risk.

The EU has said that it would consult producing countries, including Indonesia and Malaysia, in preparing the ILUC criteria but also added that the final word would, of course, remained with the Union.

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