Indonesia and Malaysia form task force with EU to address deforestation regulation
08/08/2023 (Energy Portal EU) - Indonesia and Malaysia, which account for approximately 85% of global palm oil trade, have agreed to establish an ad hoc task force with the European Union (EU) to address issues related to the EU Deforestation Regulation (EUDR), according to Indonesia’s Coordinating Ministry for Economic Affairs. The EUDR, which came into effect on June 29, imposes traceability and due diligence requirements on imports of palm oil, among other commodities, and restricts products produced on land subject to deforestation since December 31, 2020. The task force held its inaugural meeting in Jakarta on August 4, where participants agreed on terms of reference, including smallholders in the supply chain, national certification schemes, and scientific data on deforestation and forest degradation. The three parties have set a deadline of the end of 2024 for the task force to complete its work, with the next meeting scheduled for November 2023.
The EU is projected to import approximately 8.9 million metric tons of vegetable oils in the 2023-24 marketing year, with palm oil accounting for 4.8 million metric tons, according to data from the US Foreign Agricultural Service. In the previous marketing year, the EU imported 4.05 million metric tons of palm oil, an 18% decline compared to the previous year. The implementation of the EUDR, combined with the Renewable Energy Directive, which restricts the use of palm oil for biofuels in EU markets beginning in 2030, has faced criticism from palm oil producing countries, including Indonesia and Malaysia. Both countries have expressed concerns that the legislation places a heavy burden on farmers and disregards existing anti-deforestation measures and sustainability certifications. In June, Indonesia’s President Joko Widodo and Malaysia’s Prime Minister Anwar Ibrahim released a joint statement pledging to collaborate and oppose the EU’s “highly discriminatory measures against palm oil.”