Indonesia is preparing for a worst-case scenario should the European Parliament’s draft of a ban on the use of palm oil in biofuels get approved by the European Commission and European Council. In January, members of European Parliament voted in favour to phase out the use of biofuels made from palm oil by 2021 to fulfil the EU’s Renewable Energy Directive, which aims to reach a renewable energy target of 27 percent by 2030, including in transport fuels. A decision on whether the ban will be legally imposed in all EU country members will be made in 2019. If approved, Indonesia and Malaysia, who together produce nearly 90 percent of the world’s palm oil, will suffer a hard blow. The EU is the second largest export market for Indonesian palm oil, importing around 5 million tons of the key Nutella ingredient each year. The Council of Palm Oil Producing Countries has subsequently commissioned several research institutions and universities to help evaluate the opportunities and risks associated with stopping exports of palm oil from Indonesia to the EU.

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