The impact of the European Union (EU) renewable energy directive policy on the management of Indonesian palm oil industry

Abstract

This research aims to analyse 1) the interest of the European Union on Renewable Energy Directive; 2) the protection forms of the European Union on Renewable Energy Directive toward Indonesian Palm Oil; 3) the transformation of Indonesia palm oil managerial after of European Union Renewable Energy Directive. The result of this research shows that there is two interest of the European Union in implementing the policy of Renewable Energy Directive, that is in environment protection with simultaneous criteria and palm oil protection in European unions. It is found that trading protection towards Indonesian palm oil is a form of green protectionism. This protection then implements non-tariff protection as a form of trade barrier. It impacts palm oil exports from Indonesia to the European Union. This protection influenced the policy transformation of palm oil management in Indonesia. The policies are RSPO, ISPO, Presidential Directive on Primary Forest and Peatland, and Presidential Directive on Moratorium and Forest Land Allocation. This research proves that palm oil production in Indonesia changed after the implementation of the Renewable Energy Directive in the European Union. This improvement of palm oil production proves that the policy is influenced by the market drives and not an only environmental issue.