EU-Indonesia Relations - Palm Oil Issue

The European Union established the Renewable Energy Directive in 2018, which regulates all renewables policies and limits the use of palm oil-based biofuels. As palm oil production is considered not to promote sustainable development, the entry of palm oil into the European market has been limited. The main supplier of palm oil to the countries of the European Union is Indonesia, which perceives the European Union directive as an obstacle to its trade. Indonesia is also the world's largest producer of palm oil, and its exports represent a significant benefit to the Indonesian economy. Indonesia has therefore referred the case to the World Trade Organization, claiming that the European Union is discriminating against the Articles of the General Agreement on Tariffs and Trade. This thesis aims to evaluate the impact of the Renewable Energy Directive on diplomatic relations between Indonesia and the European Union. The goal was achieved through qualitative research, using the method of a single-case study. To achieve this goal, the development of negotiations between the European Union and Indonesia following the implementation of the Renewable Energy Directive is monitored. As a result, palm oil and its sustainability have complicated negotiations on the Comprehensive Economic Partnership Agreement between the European Union and Indonesia, but both entities are still determined to reach a consensus. Within the framework of EU-ASEAN cooperation, a Joint Working Group on Palm Oil has been established to resolve the issue as effectively as possible.