The impact of the European Union (EU) renewable energy directive policy on the management of Indonesian palm oil industry

Arief, Rifiana; Cangara, A. R.; Badu, Manoj; Baharuddin, Azizan; Apriliani, Astrid

doi:10.1088/1755-1315/575/1/012230

Cited by 10 publications

(16 citation statements)

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“…However, the policy they have implemented has a negative impact on Indonesia's palm oil exports, this policy is a form of green protectionism that applies non-tariff protection. The author in his article proves that there have been changes to Indonesian palm oil production after the adoption of the Renewable Energy Guidelines in the European Union (Arief, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

The Phenomenon of Green Trade Protectionism: Analysis of the Eu Palm Oil Import Ban in the Asean Region

Umarach

2021

JEBA

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Introduction: The policy issued by the European Union is the Renewable Energy Directive (RED) that turn creates barriers to palm oil exports from other countries to the European Union. The policy to ban palm oil under the pretext of protecting the environment is considered to be a new obstacle to trade. One of the rejection responses came from the ASEAN region. However, even though it has received a lot of protests and rejections, until 2020 the European Union has not changed its policy regarding the ban on the use of palm oil for biodiesel in the European region.Methods: This article focuses on the reasons for the European Union implementing protectionism policies towards the Palm Oil sector in the ASEAN region. The explanation regarding this focus is explained using the Neo Mercantilism approach.Results: The policy to ban palm oil imports can be analyzed to respond to the EU's ambition and concern that the climate emergency will jeopardize the trade process in the future. The European Union research group considers that oil palm plants have a high contribution to the problem of deforestation and forest and peatland diversion in the world, especially ASEAN. Howeever, it can also be seen that there are ambitions to protect the domestic production of biofuels from the EU sunflower and radishes from global competition. The above concerns and motivations then prompted the European Union to formulate protectionism for regional economic stability.Conclusion and suggestion: ASEAN, especially Indonesia and Malaysia, have become quite vocal actors in responding to this policy. Indonesia and Malaysia are the biggest contributors of palm oil exports to Europe. As well as causing an oversupply of global palm oil supplies, this policy is considered to discriminate against and violate free-trade norms.

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Section: Literature Reviewmentioning

confidence: 99%

The Phenomenon of Green Trade Protectionism: Analysis of the Eu Palm Oil Import Ban in the Asean Region

Umarach

2021

JEBA

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“…The outcomes of these arrangements effectively attempt to block access of less powerful states (palm oil producers) to the benefits of trade with the EU, with implications for environmental and trade (in)justice which has been described as "green protectionism" Afionis and Stringer (2012), Arief et al (2020), Erixon & Abbott (2009), Meredity (2012), and Ponte and Daugbjerg (2015). In response to such developments, weaker states will often try to mobilise to resist resource capture and enclosure by these more powerful actors (Miller et al, 2020).…”

Section: Market-based Resistance and Cooperation Among Producer Statesmentioning

confidence: 99%

“…Both countries have argued that the EU RED II violates the principle of nondiscrimination in the WTO (Arief et al, 2020) and has the potential to damage the reputation of palm oil in non-biofuel EU markets (Siahaan, 2020). The WTO's basic free trade tenets are understood such that if a foreign product looks like a domestic product, it should not be taxed or sanctioned differently from that domestic product.…”

Section: Market-based Resistance and Cooperation Among Producer Statesmentioning

confidence: 99%

“…The market-based mechanisms may speak more directly to underlying economic and trade interests of the EU. The EU's response, suggesting that EU RED II fulfilled WTO regulations by establishing sustainability criteria for biofuels that are global, objective, and nondiscriminatory to meet the EU's renewable energy targets and not limit access to the EU biofuels market (Arief et al, 2020), would seem to be once again leveraging upon its position as a global normative leader to justify its policy choices. However, the recent establishment of the EU and ASEAN Joint Working Group on Palm Oil and its first meeting held in early 2021 significantly marks a possible 'softening' of the EU's stance in the face of mobilisation and resistance (Roozen, 2021).…”

Section: Market-based Resistance and Cooperation Among Producer Statesmentioning

confidence: 99%

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Transboundary Environmental Governance in the Eu and Southeast Asia: Contesting Hybridity in the Biofuels and Palm Oil Regimes

Varkkey

2021

J. ASEAN Studies

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The research addresses the complexities of the European Union’s Renewable Energy Directives (EU RED and RED II), contextualising them within the palm oil sector in Southeast Asia, in which Indonesia and Malaysia are known to be the two largest producers and exporters of palm oil. It aims to question the effect of this expanding role of markets on power dynamics and political processes. Examining these developments at different organisational scales highlights the asymmetrical power relations that circulate through such transboundary networks to shape patterns of resource access and the distribution of environmental risks. Employing a qualitative approach, the research uses case study method to reflect on how market forces and broad political dynamics establish the hybrid environmental governance regime of biofuels. The research concludes that this transboundary market approach to biofuels and palm oil should be regarded with caution, as it (1) lowers regulatory quality within the biofuels sustainability regime, (2) undermines the sustainable palm oil market, and (3) indirectly bolsters unsustainable practices outside the palm oil sector.

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“…Additionally, Hinkes (2019) This puts the EU in a difficult situation regarding their reasoning and has allowed many scientists to publish research countering the EU's findings. Recent articles criticize the ambiguity of the Delegated Regulation 2019/807 and the fact that palm oil is singled out as the only high-ILUC risk biofuel through RED II (Arief et al, 2020;Tyson & Meganingtyas, 2020). The articles frame this different treatment as protectionist due to crops like the palm oil that are grown in the EU such as rapeseed and sunflower seed which were not listed as high-ILUC risk.…”

Section: Environmental Protectionism and Indirect Land Use Change Riskmentioning

confidence: 99%

Sustainability or protectionism in palm oil trade: The case (DS593) of Indonesia vs. the EU

Radmann¹

2021

ARBE

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This paper examines the case DS593 to understand whether the developments in question represent an attempt to further well-justified policy objectives relating to sustainability or represent protectionism in disguise. DS593 came as Indonesia’s reaction to the EU Renewable Energy Directive II (RED II) that limits and bans palm-oil imports for the “foreseeable future”. Indonesia’s strong economic dependence on palm oil exports led it to look at the justification of RED II critically and thus to highlight some inconsist- encies. These inconsistencies center around the EU’s definition of high and low Indirect Land Use Change (ILUC) risk biofuels. A review of already existing literature on the subject, in combination with the actual WTO agreements were studied to query the issue. It is argued that further deliberation is needed on the side of the EU on what constitutes high or low ILUC risk and on other biofuels apart from palm-oil which are considered unsustainable for EU regulations to not be considered protectionist. Keywords: biomass fuel, palm-oil, WTO, international trade. JEL Classification: Q2, Q270.

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The impact of the European Union (EU) renewable energy directive policy on the management of Indonesian palm oil industry

Cited by 10 publications

References 0 publications

The Phenomenon of Green Trade Protectionism: Analysis of the Eu Palm Oil Import Ban in the Asean Region

The Phenomenon of Green Trade Protectionism: Analysis of the Eu Palm Oil Import Ban in the Asean Region

Transboundary Environmental Governance in the Eu and Southeast Asia: Contesting Hybridity in the Biofuels and Palm Oil Regimes

Sustainability or protectionism in palm oil trade: The case (DS593) of Indonesia vs. the EU

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