- Greens overlook EPP in EUDR fallout, point finger at Jakarta
- Indonesia Questions EU WTO Biofuels Appeal
- Has Malaysia Gone Soft on Europe?
EUDR Delay Fallout
The Commission’s proposed delay of the EUDR has – as we noted last week – won considerable praise from the European People’s Party (EPP). They went to far to state they “delivered” the delay and “Our efforts have finally been successful”.
This makes complete sense: they are, after all, the largest party in the European Parliament and the political party of EU Commission President Ursula von der Leyen.
Despite this, NGOs such as Mighty Earth attempted to imply that it was, in fact, the Indonesia pulling the strings on the EUDR – because of the Indonesia-EU free trade agreement.
They stated:
“Having proposed a world-class piece of legislation to combat deforestation, the EC has now decided it would rather do trade deals with Trump’s US and Indonesia…”
Those following the Indonesia-EU negotiations – through Palm Oil Monitor or elsewhere – would be aware that the EUDR was close to a dealbreaker for Indonesia, and that many in Jakarta didn’t quite get it what it wanted on EU Green Deal regulations – quite the opposite.
Moreover, within the same week that the Indonesia-EU agreement was signed, and the EUDR was delayed, the EU appealed against their loss at the WTO on the import of Indonesian biofuels (see below).
So, let’s be realistic. Who has more influence over EU trade and environmental policy? The Commission President’s political party? Or an Indonesian industry that is generally reviled by European farmers?
It’s worth noting that the EPP has made its ambitions on revisions clear. They have stated that
“The burden of proof for deforestation-free products should lie exclusively with the first distributor on the European market … In European countries, where clear guidelines are in place and deforestation does not occur, forestry owners and farmers should be exempt from any requirements. This must also apply to third countries where the situation is the same.”
In other words, they are still pushing for the ‘zero risk’ category for products coming from the European Union – and most likely the US, which has been arguing for something similar.
As we’ve noted previously, this will be problematic for legal reasons and will likely rankle trading partners in Asia and Africa.
But, most importantly, they’re pushing for a wholesale revision of the EUDR. And there’s clearly some resistance to this within the Commission.
Euractiv reported that Executive Vire President Teresa Ribera is seeking to avoid revisions, “stress[ing] the need to resolve the technical issue “avoiding opening the regulation and [finding] other alternatives.””
Has Malaysia Taken the Wrong Approach on the Europe?
We’ll explore this in-depth over the coming weeks, but the some folks in Kuala Lumpur are questioning whether the EU’s approach on the European Union has ultimately been correct.
Malaysian officials have in the past had a tendency to believe that technical solutions will ultimately trump political ones. The best example being its approach on the Renewable Energy Directive a number of years ago; it was no secret that Putrajaya believed that its solution on exemptions for smallholders under the RED would maintain the use on Malaysian palm in European biofuels.
And it may well have, save the Europeans’ push to completely exclude palm via its phase-out mechanism. And sure, the RED WTO case went the way of palm exporters, but it wasn’t the technical solution that solved it.
Has Malaysia made a similar bet with the EUDR? Its technical solutions for legality and traceability under MSPO have been elegant, but if the EUDR gets simplified, they may ultimately be unnecessary.
EU Appeals WTO Decision on Palm Biofuels
Indonesia’s victory at the WTO against the EU’s tariffs on palm-based biofuels appears to be short-lived. Although the WTO found multiple problems with both the calculation and the application of the EU’s duties on Indonesian biofuels, the EU has appealed the decision.
Because of current dysfunction within the WTO this means that the appeal will go “into the void” and essentially never be resolved.
Theoretically it can be resolved via the Multi-Party Independent Arbitration (MPIA) mechanism – but only if Indonesia joins this mechanism, which it sees as problematic.
However, Indonesia’s Ambassador to the WTO questioned the timing of the EU’s appeal and the appeal itself:
“The timing of this decision, taken just three days after the conclusion of the Indonesia–EU CEPA in Bali, raises questions. Whether or not this will affect Indonesia–EU relations is not for me to answer.”