Environmental Dispute: Indonesia to quit Paris climate deal over palm oil export worries

World
Europe

03:02

The European Union is planning to slowly phase out palm oil as a renewable fuel by 2030. That plan is already putting pressure on Indonesia, one of the world's largest producers of the crop. The country's economy relies heavily on exporting palm oil and completely stopping it would have a major impact on the economy. CGTN's Silkina Ahluwalia has more from Jakarta.

Indonesia is one of the largest producers of palm oil. An estimate of 50 million Indonesians depend their daily lives on palm oil and its by-products, both directly and indirectly.

But the country has been grappling with the consequences of producing the crop.

In the past ten years alone, the forests of Borneo have shown massive changes.

Lush greeneries have been burned down to make way for palm oil plantations, destroying the habitat of endangered animals such as orangutans.

YUYUN IDRADI ENVIRONMENTALIST "Indonesia has a rich biodiversity. We are one of the world's top 3 in that regard. Cutting down rainforests do not only affect our biodiversity, but it keeps increasing our greenhouse gas emissions which contributes to climate change. Instead, we should be leaders in decreasing emissions and stopping relevant parties from burning down our forests."

Those are one of the reasons the European Union is planning to phase out palm oil as a renewable transportation fuel by 2030.

SILKINA AHLUWALIA JAKARTA, INDONESIA "Indonesia is already planning to take legal action at the World Trade Organisation to challenge the EU. The Indonesian government says palm oil requires far less land to produce compared to other crops like soy and rapeseed."

The EU's decision has prompted Indonesia to consider leaving the Paris climate deal. Under the deal, Indonesia has already committed to reducing its greenhouse gas emissions by 29 percent by 2030.

JOSUA PARDEDE ECONOMIST "Palm oil is an export commodity, which accounts for 10 to 15 percent of our total exports. So if the demand from EU will be stopped by 2030, beyond that our export performance particularly with this commodity will be slowing down. So it will impact negatively on our export performance and next, it will impact our trade balance and also current account deficit."

Experts believe the government needs to adopt sustainable policies that could help to reduce greenhouse gas emissions while increasing economic growth. Silkina Ahluwalia, CGTN, Jakarta.