Palm Oil Industry Faces New Setback

Summary

The palm oil industry, especially the biodiesel sector, is facing new setbacks from the European Union (EU) countries. In January 2021, they will impose the latest regulation on renewable energy or Renewable Energi Directive/RED II, one of which clauses discredits Indonesia’s palm oil industry.

A year after announcing the RED II in 2018, the European Commissioner issued a regulation on Indirect Land Use Change (ILUC). The commissioner assessed that the ILUC phenomena existed because of the palm-oil-based biodiesel industry, notoriously known for its massive land clearing. The EU members decided to gradually reduce the usage of palm-oil-based fuel by implementing the RED II in 2021. They agreed that biodiesel is harmful to climate change and food availability.

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