EU parliament unfazed by trade fight over palm biofuel phase-out

(Eco Business, 15 Oct 2019) A European member of parliament says the bloc isn’t concerned about threats by Indonesia and Malaysia to file a trade complaint over an EU policy to phase out palm oil-based biofuels by 2030. The two Southeast Asian countries have denounced the EU policy as discriminatory.

The European Parliament will proceed with phasing out palm oil-based biofuel by 2030 despite threats of retaliatory action by Indonesia and Malaysia, the world’s biggest producers of the ubiquitous vegetable oil.

The policy was adopted earlier this year to curb the use of crops that cause deforestation in transportation fuel, over concerns that their production contributes to global carbon emissions and thus exacerbates climate change. But both Indonesia and Malaysia have warned of restricting European imports and other trade reprisals should the phase-out go ahead.

Bas Eickhout, a Dutch member of the European Parliament, said he’s not worried that Indonesia and Malaysia will take their grievances to the World Trade Organization (WTO).

“To be very honest, bring it on on WTO,” he told reporters at the European Parliament in Brussels. “We have very clear environmental concerns, very clear environmental reasons why we say this [palm oil-based biodiesel] can’t be labeled as renewable.”

Eickhout said he’s confident the WTO would rule in favor of the EU’s meticulously planned palm biofuel phase-out.

“I think if that goes through, Europe will not back track,” he said. “This is a great policy, and the only thing that can challenge it is of course WTO. But as I said, it’s so nuanced draft that we expect WTO will say that it’s allowed in WTO. You are allowed to do specific policies for environmental reasons. We expect WTO will let that happen.”

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Eco Business, 15 Oct 2019: EU parliament unfazed by trade fight over palm biofuel phase-out