Trump's Tailwinds for Palm Oil
- Accusations against palm oil as an unsustainable commodity for food and fuel are increasingly being pushed aside in favor of maintaining economies and geopolitical stability.
- Trade deals in 2025 have left out the question of sustainability due to Trump’s tariffs. These deals may be short lived as US demands on global trade partners are seen as an aberration which will not stand when the Trump presidency ends.
- Meanwhile, investments into recovering palm oil wastes today could position palm oil as a sustainable leader forfeed and fuel if the current tailwinds persist in global trade.
In the long term, palm oil producing majors in Indonesia and Malaysia are preparing for a return to normal where the sustainability of palm oil is debated at the WTO.
Malaysia for example, has vehemently argued that its national commitment to produce palm oil without deforestation, a basic demand of the EU, deserves a listing of “Low Risk.”
According to the Deputy Plantation and Commodities Minister Datuk Chan Foong Hin, Malaysia’s latest forest data, will be submitted to the Food and Agriculture Organisation (FAO) of the United Nations for the Global Forest Resources Assessment report to substantiate Malaysia’s demand of the EU to list it as “Low Risk” under the EU’s Deforestation Regulations.
An assessment of the FAO’s statistics on forests by Hannah Ritchie for Our World In Data places Malaysia in good shape to support the argument as long as Malaysia sticks with its commitment to produce palm oil with no deforestation.
Forests have been lost and regained as Hannah Ritchie explains in the U-shape curve of forest change. What does not change is the role of palm oil in sustaining a booming human population where vegetable oils have a critical role to play for food and fuel.
This fact may have something to do with the EU-Indonesia trade deal IEU-CEPA as the EU created a blockbuster zero tariff rate for Indonesian palm oil. News reports from Indonesia are saying that there will be a quota of one million tonnes of Indonesian crude palm oil allowed with zero tariffs along with whatever volume of palm kernel oil was imported in the previous year.
If the zero tariff rate for Indonesian palm oil goes through in September it will effectively silence the opinions of NGOs like the Environmental Investigations Agency (EIA) and its constant criticisms of Indonesian palm oil.
It will be interesting to see how Norwegian NGO and vocal protestor of biofuels Transport & Environment reacts to the IEU-CEPA zero tariff concession for Indonesian palm oil.
Indonesia’s chief negotiator for IEU-CEPA, Minister Airlangga Hartarto has dropped a hint that biodiesel exports to the EU will not be an issue.
“Regarding the biodiesel, we haven’t yet discussed it, as currently we don’t export biodiesel. We only produce the biodiesel for domestic consumption”
This contrasts sharply with the biodiesel industry’s concern about falling biodiesel exports which is expected to drop further with the implementation of the EU’s Deforestation Regulations.
Indonesia’s biodiesel exports to the EU have been a contentious point which got the World Trade Organization involved in a bitter dispute.
But these are changing times. Who could have seen the EU granting Indonesian palm oil gaining a zero percent tariff entry into the EU?
Will some of this zero-tariff palm oil from Indonesia end up in the EU’s biofuels supply as commonly alleged?
Can the Indonesian palm oil industry prove that palm oil-based biodiesel can really become a clean energy product of the future, and not just a biofuel full of controversy?
How will Indonesia’s plan to restrict palm oil based biodiesel exports to meet its clean energy transitions and zero emissions targets affect the EU’s commitments to decarbonize its transport sector with biofuels?
It is obviously important for Indonesia to prove that its use of palm-based biofuels will support the country’s commitment to fighting climate change. If Indonesia can successfully prove that its use of palm oil in biofuels leads to emission reductions and is therefore essential to the country’s climate commitments, what will that mean for importers of Indonesian palm oil that depend on it to back up shortages of domestic vegetable oils?
The EU for example, as a major importer of palm oil, is struggling to meet its demands for food and biofuels from domestic sources.
This has led to the EU’s failure to address its needs for sustainable food and biofuels from domestic sources.
Read Failure of European Seed Oils in Food vs Fuel Dilemma
Malaysia for example, has vehemently argued that its national commitment to produce palm oil without deforestation, a basic demand of the EU, deserves a listing of “Low Risk.”
According to the Deputy Plantation and Commodities Minister Datuk Chan Foong Hin, Malaysia’s latest forest data, will be submitted to the Food and Agriculture Organisation (FAO) of the United Nations for the Global Forest Resources Assessment report to substantiate Malaysia’s demand of the EU to list it as “Low Risk” under the EU’s Deforestation Regulations.
An assessment of the FAO’s statistics on forests by Hannah Ritchie for Our World In Data places Malaysia in good shape to support the argument as long as Malaysia sticks with its commitment to produce palm oil with no deforestation.
Forests have been lost and regained as Hannah Ritchie explains in the U-shape curve of forest change. What does not change is the role of palm oil in sustaining a booming human population where vegetable oils have a critical role to play for food and fuel.
This fact may have something to do with the EU-Indonesia trade deal IEU-CEPA as the EU created a blockbuster zero tariff rate for Indonesian palm oil. News reports from Indonesia are saying that there will be a quota of one million tonnes of Indonesian crude palm oil allowed with zero tariffs along with whatever volume of palm kernel oil was imported in the previous year.
If the zero tariff rate for Indonesian palm oil goes through in September it will effectively silence the opinions of NGOs like the Environmental Investigations Agency (EIA) and its constant criticisms of Indonesian palm oil.
It will be interesting to see how Norwegian NGO and vocal protestor of biofuels Transport & Environment reacts to the IEU-CEPA zero tariff concession for Indonesian palm oil.
Indonesia’s chief negotiator for IEU-CEPA, Minister Airlangga Hartarto has dropped a hint that biodiesel exports to the EU will not be an issue.
“Regarding the biodiesel, we haven’t yet discussed it, as currently we don’t export biodiesel. We only produce the biodiesel for domestic consumption”
This contrasts sharply with the biodiesel industry’s concern about falling biodiesel exports which is expected to drop further with the implementation of the EU’s Deforestation Regulations.
Indonesia’s biodiesel exports to the EU have been a contentious point which got the World Trade Organization involved in a bitter dispute.
But these are changing times. Who could have seen the EU granting Indonesian palm oil gaining a zero percent tariff entry into the EU?
Will some of this zero-tariff palm oil from Indonesia end up in the EU’s biofuels supply as commonly alleged?
Can the Indonesian palm oil industry prove that palm oil-based biodiesel can really become a clean energy product of the future, and not just a biofuel full of controversy?
How will Indonesia’s plan to restrict palm oil based biodiesel exports to meet its clean energy transitions and zero emissions targets affect the EU’s commitments to decarbonize its transport sector with biofuels?
It is obviously important for Indonesia to prove that its use of palm-based biofuels will support the country’s commitment to fighting climate change. If Indonesia can successfully prove that its use of palm oil in biofuels leads to emission reductions and is therefore essential to the country’s climate commitments, what will that mean for importers of Indonesian palm oil that depend on it to back up shortages of domestic vegetable oils?
The EU for example, as a major importer of palm oil, is struggling to meet its demands for food and biofuels from domestic sources.
This has led to the EU’s failure to address its needs for sustainable food and biofuels from domestic sources.
Read Failure of European Seed Oils in Food vs Fuel Dilemma
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Published August 19, 2025 CSPO Watch