Geneva: The Dispute Settlement Board (DSB) of the World Trade Organization (WTO) today affirmed the European Union’s authority to implement actions that prevent its renewable fuel policies from increasing greenhouse gas emissions linked to indirect land-use changes.
The DSB adopted a panel ruling in a dispute initiated by Indonesia regarding the European Union’s measures concerning palm oil and oil palm crop-based biofuels. Indonesia noted the panel ruling circulated on January 10, 2025, which found that the European Union’s 2018 renewable energy directive and related regulations unfairly discriminated against Indonesia’s palm oil biofuels. Jakarta further claimed the economic impact of these discriminatory measures was substantial and had severely affected Indonesian palm oil exports, impacting millions of farmers and businesses. It called on the EU to adjust its policy and the measures at issue so that they were in line with the WTO agreements; Indonesia will closely monitor implementation and expects swift compliance.
Concerning the EU measures at issue, the Panel found that Indonesia had failed to establish its claims that included the 7% maximum share and the high Indirect land use change ILUC)-risk cap and phase-out were inconsistent with the obligation in Article 2.4 of the TBT Agreement to use relevant international standards as a basis for technical regulations, and that the 7% maximum share and the high ILUC-risk cap and phase-out were inconsistent with the obligation in Article 2.2 of the TBT Agreement to ensure that technical regulations are not more trade-restrictive than necessary to fulfil a legitimate objective.
The European Union today expressed its approval of the panel’s conclusions, despite noting some reservations about certain aspects of the panel’s findings. It acknowledged that the panel recognized the EU’s measures as targeting valid environmental goals and being grounded in scientific evidence.
On December 9, 2019, Indonesia requested consultations with the European Union regarding certain measures imposed by the European Union and its member States concerning palm oil and oil palm crop-based biofuels from Indonesia.
Indonesia claimed that the measures imposed by the European Union appear to be inconsistent with certain TBT Act provisions.
Indonesia requested the establishment of a panel on March 18, 2020. At its meeting on June 29, 2020, the DSB deferred the matter.
At its meeting on 29 July 2020, the DSB established a panel. Argentina, Brazil, Canada, China, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, India, Japan, Korea, Malaysia, Norway, Russia, Singapore, Thailand, Turkey and the United States reserved their third-party rights.
On November 2, 2020, Indonesia requested that the composition of the panel be determined according to Article 8.7 of the DSU. On November 12, 2020, Deputy Director-General Yonov Frederick Agah, acting in place of the Director-General, composed the panel.
On June 8, 2021, the Chair of the panel informed the DSB that per the timetable adopted by the panel, after consultations with the parties, the panel estimated to issue its final report to the parties not before the second quarter of 2022. The Chair apprised the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation. On 22 February 2023, the Chair of the panel informed the DSB that in light of the complexity of the legal and factual issues that had arisen in the dispute, the panel expected to issue its final report to the parties, not before the third quarter of 2023.
On March 5, 2024, the Chair of the panel informed the DSB that the panel had granted Indonesia’s request of March 4, 2024, that the panel suspend its work under Article 12.12 of the DSU for two months. Subsequently, the Chair informed the DSB of several requests from Indonesia to extend the suspension of the panel’s work. In its most recent communication, dated November 8, 2024, the Chair informed the DSB that the panel had granted Indonesia’s request of November 6, 2024, to extend the suspension of the panel’s work until January 9, 2025. The Chair indicated that the panel would resume its work and circulate the panel report on January 10, 2025. On January 10, 2025, the panel report was circulated to Members.
– global bihari bureau
