Indonesia to Stop Complying with European Union's Palm Oil Standards
The Indonesian government will (temporarily) stop using sustainability standards designed by the European Union regarding crude palm oil (CPO). Indonesian Minister of Maritime Affairs Rizal Ramli said the current strict standards of the European Union hurt the domestic palm oil industry, especially smallholders. Moreover, Indonesia and Malaysia, the world's two largest CPO producers and exporters, are to set up a new intergovernmental palm oil council that will design new rules and standards regarding sustainable palm oil production.
Last week it was announced that Indonesia and Malaysia agreed to set up the new palm oil council (called the Council of Palm Oil Producer Countries). This council aims to control the global palm oil supply, stabilize CPO prices and promote sustainable practices in the palm oil industry, partly by harmonizing existing standards of Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO). Indonesia and Malaysia account for about 85 percent of the world's CPO output.
Rizal is confident that demand for Indonesian CPO will not decline due to the moratorium on applying the European Union's palm oil standards. The Indonesian government will lobby the governments of China and India to use the palm oil standards that are to be developed by the Council of Palm Oil Producer Countries (CPOP).
Indonesian Palm Oil Production and Export:
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015¹ | |
| Production (million metric tons) |
19.2 | 19.4 | 21.8 | 23.5 | 26.5 | 27.0 | 31.0 | 31.5 |
| Export (million metric tons) |
15.1 | 17.1 | 17.1 | 17.6 | 18.2 | 21.2 | 20.0 | 19.5 |
| Export (in USD billion) |
15.6 | 10.0 | 16.4 | 20.2 | 21.6 | 19.0 | 21.0 |
¹ indicates forecast
Sources: Food and Agriculture Organization of the United Nations, Indonesian Palm Oil Producers Association (Gapki) and Indonesian Ministry of Agriculture
Further Reading:
• Overview of the Palm Oil Industry of Indonesia