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6 March 2010

Netherlands to help promote Indonesia’s crude palm oil

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The Netherlands has agreed to provide Indonesia with capacity building programs to help deal with a new European Union directive on imports of crude palm oil (CPO), the Jakarta Post reported.

“There’s an EU directive. The Netherlands has promised to help us, firstly, to understand the EU directive and help us meet the criteria stipulated in the EU directive,” Indonesian Trade Minister Mari Elka Pangestu said Thursday following the 20th session of the mixed commission on bilateral economic cooperation between Indonesia and the Netherlands.

“The aid will be in capacity building programs,” she added. According to the EU directive, bio-fuels and bio-liquids should not be produced using raw materials from land with high biodiversity value or with high carbon stocks.            

This directive on the criteria for the import and use of energy from renewable sources was approved by the European Parliament last year.

Dutch Minister for the Economy Maria van der Hoeven  said at the meeting that Indonesia might face “an issue” on the enforcement of the directive, with the putting into place of stainability criteria on palm oil.

The Indonesian Foreign Ministry’s director general for Europe and America, Retno Marsudi said Indonesia was concerned that the directive would consequently cause its CPO exports to the EU to fall, though this would only affect CPO exported for bio-fuel, not for food products.

But under the cooperation between Indonesia and the Netherlands, she said, any matters that related to Indonesia’s CPO exports to the EU could be solved “bilaterally”. Retno said the bilateral cooperation on palm oil was crucial as Indonesia exported its CPO to the EU via the Netherlands’ port of  Rotterdam.

Indonesia — the world’s largest CPO producer — exports CPO and its derivatives to at least 15 EU member states, including the Netherlands, Germany, Italy, France, the United Kingdom, Spain and Denmark. The EU is Indonesia’s second CPO export destination after India.

Indonesian Palm Oil Producers’ Association (Gapki) data shows that Indonesia’s CPO exports to the EU stood at 968,205 tons in 2008, out of a total 7.9 million tons globally. Indonesia’s other global CPO export destinations included China and Singapore.

During the session, the Netherlands also pledged to support Indonesia by investing more than 40 million euro in renewable energy projects between 2010 and 2013, according to a press statement released by the Foreign Ministry.

Apart from the EU directive, Forestry Ministry head of research and development Tachrir Fathoni had earlier said his ministry was drafting a decree to allow oil palm plantations in the forest sector.

He said the policy, believed not to lead to massive forest conversion, was part of Indonesia’s attempt to comply with international standards in mitigating climate change and to “anticipate” the implementation of the scheme to reduce emissions from deforestation and degradation (REDD).


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