Indonesia Threatens to Withdraw from Paris Agreement over Palm Oil Dispute with the European Union

JAKARTA, PINUS PRESS - Luhut Pandjaitan, Indonesia Coordinating Minister of Maritime Affairs, said that Indonesia could consider exiting the Paris agreement under the United Nations Framework Convention on Climate Change if the European Union (EU) goes ahead with plans to phase out the consumption of palm oil as renewable fuel. “The EU should not underestimate Indonesia," said Luhut at a palm oil forum.

The European Commission has classified crude palm oil (CPO) as an unsustainable fuel source, removing it from the list of eco-friendly materials. The EU Parliament will decide in a few months whether this classification will be enforced by 2030, thus phasing out its use.

Indonesia and Malaysia are the world’s biggest palm oil producer, with 85 percent of the world’s production between them. Around 20 million Indonesians rely on the palm oil sector, which has helped alleviate people from poverty. However, palm oil production has been heavily linked to deforestation, resulting in high carbon emission and ecological devastation.

Under the Paris climate accord, Indonesia has committed to reduce its greenhouse gas emissions unconditionally by 29 percent and conditionally by 41 percent by 2030. The consideration of withdrawal of Indonesia is also influenced by the recent withdrawal of United States from the Paris agreement. Indonesia has said it is preparing to challenge the EU and its Renewable Energy Directive (RED II) at the World Trade Organization as soon as it is implemented.

Written by: Peter Sidajaya