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Indonesia to file suspension of concessions against EU on palm oil dispute in WTO

Published by Global Banking & Finance Review®

Posted on March 7, 2026

2 min read

Last updated: March 7, 2026

Indonesia to file suspension of concessions against EU on palm oil dispute in WTO - Finance news and analysis from Global Banking & Finance Review

Tags:Finance trade WTO Palm Oil International Relations

Quick Summary

Indonesia has formally requested a suspension-of‑concessions against the EU at the WTO after Brussels failed to comply with a 2025 dispute panel ruling over discriminatory palm oil-based biofuel restrictions.

Indonesia to File WTO Suspension of Concessions Against EU over Palm Oil Dispute

Indonesia's Response to EU's Palm Oil Policy and WTO Ruling

JAKARTA, March 7 (Reuters) - Indonesia's trade ministry said on Saturday that the government will file a suspension-of-concessions request against the European Union at the World Trade Organization's (WTO's) dispute settlement body, citing the block's failure to meet a WTO ruling in a palm oil case.

Key Details of the Suspension Request

Here are the details:

EU's Non-Compliance with WTO Ruling

"This step is taken after the EU could not meet the deadline to adjust its policy or was not fully compliant with the ruling and recommendation of the palm oil dispute settlement body," Trade Minister Budi Santoso said in a statement.
Scope of Concession Suspension

The suspension of concession will be focused on trade in goods, Budi said, adding that the government has not ruled out concession suspension in other sectors.
Indonesia's Approach to Calculating Losses

"We will ensure that the losses are thoroughly calculated and the cases are handled effectively, while maintaining bilateral relations with the EU," Budi said.

Background: WTO Panel Findings

WTO Panel Decision in Favor of EU

In 2025, a WTO panel found largely in favour of the EU in a case brought by Indonesia against the bloc's restrictions on palm oil-based biofuel.
Implications for Palm Oil-Based Diesel

Biofuel Classification and Phase-Out Timeline

The panel ruled that palm oil-based diesel would not be considered a biofuel and its use in transport fuel would effectively be phased out between 2023 and 2030. However, the panel did find fault in the way the EU had prepared, published and administered its measures.

Reporting and Editorial Information

(Reporting by Bernadette Christina; Editing by Himani Sarkar)

Key Takeaways

•Indonesia filed a WTO suspension‑of‑concessions request on March 7, 2026, citing the EU’s non‑compliance with the DS593 ruling (voi.id).
•The WTO panel in January 2025 found EU policies discriminated against Indonesian palm oil biodiesel under WTO nondiscrimination and TBT rules (worldenergynews.com).
•The request targets goods trade initially, with potential to expand to other sectors, while Indonesia pledges careful damage calculations and continued bilateral relations (voi.id).

References

Frequently Asked Questions about Indonesia to file suspension of concessions against EU on palm oil dispute in WTO

1Why is Indonesia filing a suspension of concessions against the EU?

Indonesia is filing the request because the EU failed to fully comply with a WTO ruling regarding its policy on palm oil-based biofuel.

2What areas will Indonesia target in its suspension of concessions?

The suspension of concessions will mainly focus on trade in goods, but other sectors may also be considered.

3What was the outcome of the 2025 WTO panel on the palm oil dispute?

The WTO panel found largely in favor of the EU, ruling that palm oil-based diesel would be phased out as a transport fuel between 2023 and 2030.

4How is Indonesia ensuring losses are managed during this process?

The Indonesian trade ministry stated that losses will be thoroughly calculated and cases handled effectively while maintaining relations with the EU.

5What fault did the WTO panel find in the EU’s measures?

The panel found issues with the way the EU prepared, published, and administered its palm oil measures.

Indonesia's Response to EU's Palm Oil Policy and WTO Ruling

Key Details of the Suspension Request

Here are the details:

EU's Non-Compliance with WTO Ruling

"This step is taken after the EU could not meet the deadline to adjust its policy or was not fully compliant with the ruling and recommendation of the palm oil dispute settlement body," Trade Minister Budi Santoso said in a statement.

Scope of Concession Suspension

The suspension of concession will be focused on trade in goods, Budi said, adding that the government has not ruled out concession suspension in other sectors.

Indonesia's Approach to Calculating Losses

"We will ensure that the losses are thoroughly calculated and the cases are handled effectively, while maintaining bilateral relations with the EU," Budi said.

Background: WTO Panel Findings

WTO Panel Decision in Favor of EU

In 2025, a WTO panel found largely in favour of the EU in a case brought by Indonesia against the bloc's restrictions on palm oil-based biofuel.

Implications for Palm Oil-Based Diesel

Biofuel Classification and Phase-Out Timeline

The panel ruled that palm oil-based diesel would not be considered a biofuel and its use in transport fuel would effectively be phased out between 2023 and 2030. However, the panel did find fault in the way the EU had prepared, published and administered its measures.

Reporting and Editorial Information

(Reporting by Bernadette Christina; Editing by Himani Sarkar)

Key Takeaways

•Indonesia filed a WTO suspension‑of‑concessions request on March 7, 2026, citing the EU’s non‑compliance with the DS593 ruling (voi.id).

•The WTO panel in January 2025 found EU policies discriminated against Indonesian palm oil biodiesel under WTO nondiscrimination and TBT rules (worldenergynews.com).

•The request targets goods trade initially, with potential to expand to other sectors, while Indonesia pledges careful damage calculations and continued bilateral relations (voi.id).

Frequently Asked Questions