EUROPEAN UNION – CERTAIN MEASURES CONCERNING PALM OIL AND OIL PALM CROP-BASED BIOFUELS REQUEST FOR THE ESTABLISHMENT OF A PANEL BY INDONESIA
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 24 March 2020
Document codes: WT/DS593/9
Complainant: Indonesia
Respondent: EU
Third parties: Argentina, Australia, Brazil, Canada, China, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, India, Japan, Malaysia, Norway, Russia, Singapore, South Korea, Thailand, Turkey, U.S.
Dispute stage: Panel
Agreements cited: Art. I:1, III:2, III:4, X:3(a), XI:1  GATT 1994Art. 1.1(a)(ii), 3.1(a), 5, 5(c)  Subsidies and Countervailing Measures (SCM)Art. 2.1, 2.2, 2.4, 2.5, 2.8, 2.9, 5.1.1, 5.1.2, 5.2, 5.6, 5.8, 12.1, 12.3  Technical Barriers to Trade (TBT)

EUROPEAN UNION – CERTAIN MEASURES CONCERNING
PALM OIL AND OIL PALM CROP-BASED BIOFUELS
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY INDONESIA
The following communication, dated 18 March 2020 , from the delegation of Indonesia to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 9 December 2019, Indonesia requested consultations with the European Union pursuant to
Article 4 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes
("DSU"), Article XXII of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), Article 14
of the Agreement on Technical Barriers to Trade ("TBT Agreement") and Article 30 of the Agreement
on Subsidies and Countervailing Measures ("SCM Agreement") regarding certain measures imposed
by the European Union and the EU Member States affecting palm oil and oil palm crop-based biofuels.

Consultations on those measures were held on 19 February 2020. Regretfully, those consultations
have failed to settle the dispute.

Indonesia therefore requests that the Dispute Settlement Body establishes a panel to examine the
matter identified in this request, pursuant to Articles 4.7 and 6 of the DSU, Article XXII I of the
GATT 1994, Article 14.1 of the TBT Agreement and Article 30 of the SCM Agreement.

A. The measures at issue

1. The measures at issue comprise measures adopted by the European Union and by certain
EU Member States.
a. EU measures

2. The EU measures at issue are laid down in the following legal instruments:
i. Directive (EU) 2018/2001 of the European Parliament and of the Counc il of
11 December 2018 on the promotion of the use of energy from renewable sources
(recast), OJ 2018 L 328, p. 80 ("RED II");
ii. Commission Delegated Regulation (EU) 2019/807 of 13 March 2019 supplementing
Directive (EU) 2018/2001 of the European Parliament and of the Council as regards
the determination of high indirect land -use change -risk feedstock for which a
significant expansion of the production area into land with high carbon stock is
observed and the certification of low indirect land-use change-risk biofuels, bioliquids
and biomass fuels, OJ 2019 L 133, p. 1 ("Delegated Regulation 2019/807");
iii. Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009
on the promotion of the use of energy from renewable sources and amending an d
subsequently repealing Directives 2001/77/EC and 2003/30/EC, OJ 2009 L 140, p. 16
("RED I"), as amended by Directive (EU) 2015/1513 of the European Parliament and
of the Council of 9 September 2015 amending Directive 98/70/EC relating to the
quality of petrol and diesel fuels and amending Directive 2009/28/EC on the promotion

of the use of ener gy from renewable sources, OJ 2015 L 239, p. 1 ( "Directive
2015/1513");
iv. Regulation (EU) 2018/1999 of the European Parliament and of the Council of
11 December 2018 on the Governance of the Energy Union and Climate Action,
amending Regulations (EC) No 663/2 009 and (EC) No 715/2009 of the
European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC,
2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament
and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing
Regulation (EU) No 525/2013 of the European Parliament and of the Council,
OJ 2018 L 328, p. 1 ("Regulation 2018/1999");
v. Palm oil and deforestation of rainforests, European Parliament resolution of
4 April 2017 on palm oil and deforestat ion of rainforests (2016/2222(INI)),
OJ 2018 C 298, p. 2 ("Resolution of 4 April 2017");
vi. Report from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions on the status of
production expansion of relevant food and feed crops worldwide, COM(2019) 142 final
(13 March 2019) ("Status Report"); and
any annexes thereto, amendments, supplements, replacements, renewals, extensions,
implementing measures (including any implementing measure s envisaged in the above-mentioned
legal instruments) or any other related measures, and any exemptions applied.
3. RED II was adopted on 11 December 2018 and entered into force on 24 December 2018. It
must be transposed by the EU Member States by 30 June 2021.1 It is a recast version of RED I which
was amended in 2015 by Directive 2015/1513.
4. RED II envisages the adoption by the Commission of notably delegated and implementing
acts. Several provisions, such as Article 30(8) of EU RED II, refer to further action to be taken by
the Commission. Those provisions apply together with Articles 32 ( "Implementing acts ") and
35 ("Exercise of the delegation"). Any such measures adopted or actions taken by the Commission,
acting on the basis of EU RED II, are also covered by this panel request.
5. The Commission's initial proposal for RED II2 laid down a new EU target of at least 27 % for
the share of renewable energy consumption in the European Union in 2030. Article 7 of that proposal
put forward, as part of the rules for calculating the share of energy from renewable sources, a model
of a decreasing maximum share of biofuels and bioliquids produced from food or feed crops starting
from 2021, allowing EU Member States to impose lower limits and to distinguish between different
types of biofuel and bioliquid.
6. On 4 April 2017, the European Parliament adopted a resolution on palm oil and deforestation
of rainforests. In that resolution, the European Parliament acknowledged that "the total GHG
emissions from palm oil -related land use change is unknown " and that "it is necessary to improve
scientific assessments in this regard ".3 It also referred to the fact that "there are no reliable data
available in producer countries on the areas of land given over to the cultivation of oil palms ".4 As
part of its general considerations, the European Parliament observed that "other plant-based oils
produced from soybeans, rapeseed and other crops have a much higher environmental footprint and
require much more extensive land use than palm oil" and noted that "other oil crops typically entail
a more intensive use of pesticides and fertiliser".5 Furthermore, it recognised the complexity of the
oil palm issue and emphasised "the importance of developing a global solution based on the
collectively responsibility of many actors ".6 The resolution nonetheless called for, inter alia , the
introduction of minimum sustainability criteria for specifically palm oil and products containing palm

1 Article 36(1) of RED II.
2 European Commission, Proposal for a Directive of the European Parliament and of the Council on the
promotion of the use of energy from renewable sources (recast), COM(2016) 767 final (30 November 2016).
3 Recital T in the preamble to Resolution of 4 April 2017.
4 Recital U in the preamble to Resolution of 4 April 2017.

oil that enter the EU market,7 introducing tariffs and non-tariff barriers based on the carbon footprint
of palm oil;8 and phasing out the use of vegetable oils that drive deforestation, including palm oil,
as a component of biofuels, preferably by 2020. 9 The European Parliament further recommended
promoting the production of EU oil crops, in particular "finding and promo ting more sustainable
alternatives for biofuel use, such as European oils produced from domestically cultivated rape and
sunflower seeds".10
7. On 17 January 2018, the European Parliament called for the phasing out, by 2021, of palm oil
crop-based biofuels for calculating EU renewable energy targets and adopted amendments that
significantly altered the European Commission's initial proposal for RED II.11 Apart from proposing a
Union-wide binding target of at least a 35 % share of renewable energy to be accompani ed by
national targets and including a reference to its resolution of 4 April 2017, the European Parliament
supported treating differently crop-based biofuels with high GHG efficiency and a low risk of indirect
land use change ("ILUC"). It also instructed the Commission to develop a methodology for certifying
low ILUC -risk biofuels and bioliquids. In any event, the European Parliament proposed that the
contribution of biofuels and bioliquids produced from specifically palm oil be 0 % from 2021.
Binding EU renewable energy targets

8. RED II lays down two main types of binding renewable energy target.12
9. First, Article 3(1) of RED II imposes a new binding EU target of a share of at least 32 % of
renewable energy in the EU gross final consumption of energy by 2030.13 From 1 January 2021, the
share of energy from renewable sources in each EU Member State 's gross final consumption of
energy may not be lower than the baseline share included in the third column of the table in Part A
of Annex I to RED II.14
10. Second, Article 25(1) of RED II sets a distinct target for mainstreaming the use of renewable
energy in the transport sector. Each EU Member State must require fuel suppliers to ensure that the
share of renewable energy within the final consumption of energy in the transport sector is at least
14 % by 2030.15 The calculation of that share is subject to the rules found in Articles 26 and 27 of
RED II.
11. Articles 26 and 27 of RED II lay down, inter alia, specific limitations on the use of crop-based
biofuels, bioliquids and biomass fuels for the purposes of meeting the EU renewable energy targets
in the transport sector. These limitations are mostly linked to the notion of ILUC.
12. RED II applies together with Regulation 2018/1999 which further details the processes for,
inter alia , monitoring and ensuring compliance with the binding EU renewable energy targets,
including the mandatory base-line requirements.
The 7 % limitation

13. Article 26(1) of RED II states that, for the calculation of an EU Member State 's gross final
consumption of energy from renewable sources referred to in Article 7 and the minimum share
referred to in the first subparagraph of Article 25(1), the share of biofuels, bioliquids and biomass
fuels consumed in transport, where produced from food and feed crops, may not be more than one
percentage point higher than the share of such fuels in the final consumption of energy in the road
and rail transport sectors in 2020 in that Member State, with a maximum of 7 % of final consumption

11 See http://www.europarl.europa.eu/doceo/document/TA-8-2018-0009_EN.html?redirect; An
overview of the proposed amendments is available here: http://www.europarl.europa.eu/doceo/document/A-8-
2017-0392_EN.html?redirect#title1.
12 The rules governing the calculation of the share of renewable energy are laid down, in particular, in
Articles 7, 26 and 27 of RED II. Other targets apply in respect of, for example, the share of renewable energy
in the heating and cooling sector (Article 23 of RED II).
13 See also recital 8 in the preamble to RED II.
14 Article 3(4) of RED II.
15 Article 25(1) of RED II.

of energy in the road and rail transport sectors in that Member State. The 7 % limitation applies
solely to biofuels produced from food and feed crops. That limitation was first introduced in R ED I,
as amended by Directive 2015/1513.
14. Article 26(1) allows EU Member States to set limits that are lower than the 7 % limitation. In
setting lower limits, Article 26(1) expressly recognises that EU Member States may differentiate
between biofuels, bioli quids and biomass fuels produced from food and feed crops. Thus,
Article 26(1) enables EU Member States to treat differently biofuels made from, for example, oil
crops or specifically palm oil.
15. For the purposes of this panel request, the 7% limitation includes also more restrictive limits
set by EU Member States.
16. The 7 % limitation including any measures further limiting the share of biofuels, bioliquids and
biomass fuels consumed in transport, where produced from food and feed crops, restrict imports of
palm oil and oil palm crop -based biofuels from Indonesia into the European Union. The design and
operation of these measures mean that the quantity of imports of palm oil and oil palm crop -based
biofuels into the EU market are severely restricted and result in unnecessary obstacles to trade in
palm oil and oil palm crop-based biofuels.
17. Despite requests to that effect, the European Union has failed to adequately explain the
justification of these measures.
The high ILUC-risk cap and phase-out, and the criteria for determining and certifying low ILUC-risk
biofuels

The high ILUC-risk cap and phase-out

18. Article 26(2) of RED II addresses the alleged risk of ILUC. Recital 81 in the preamble to RED
II states that ILUC "occurs when the cultivation of crops for biofue ls, bioliquids and biomass fuels
displaces traditional product of crops for food and feed purposes ". The European Union takes the
view, as recital 81 explains, that "[s]uch additional demand increases the pressure on land and can
lead to the extension of agricultural land into areas with high-carbon stock, such as forests, wetland
and peatland, causing additional greenhouse gas emissions ". That recital also relies on
Directive 2015/1513, in which the European Union previously recognised that "it is likely t hat
greenhouse gas emissions linked to indirect land-use change are significant, and could negate some
or all of the greenhouse gas emission savings of individual biofuels".16 Furthermore, recital 82 in the
preamble to RED II refers to the fact that, although the level of GHG emissions caused by ILUC
"cannot be unequivocally determined ", "the highest risk of indirect land -use change have been
identified for biofuels … produced from feedstock for which a significant expansion of the production
area into land with high-carbon stock is observed".
19. Article 26(2) of RED II states that, for the calculation of an EU Member State's gross final
consumption of energy from renewable sources referred to in Article 7 and the minimum share
referred to in the first subparagraph of Article 25(1), the share of high ILUC-risk biofuels, bioliquids
or biomass fuels produced from food and feed crops for which a significant expansion of the
production area into land with high -carbon stock is observed shall not exceed the level of
consumption of such fuels in that Member State in 2019. Furthermore, from 31 December 2023 until
31 December 2030, that limit is to decrease gradually to 0%. RED II, in particu lar when read
together with Delegated Regulation 2019/807, gives effect to the European Parliament proposal of
17 January 2018, which proposed that the contribution of biofuels and bioliquids produced from
specifically palm oil be 0 % from 2021, and the Resolution of 4 April 2017. The same rule is included
in RED II even if the period for the phase-out is longer.
20. On 13 March 2019, the European Commission adopted Delegated Regulation 2019/807
supplementing RED II, as envisaged by Article 26(2) of RED II. Tha t regulation entered into force
on 10 June 2019. The European Commission adopted Delegated Regulation 2019/807 without having
carried out any impact assessment. This was done "despite the political importance of the file" and

16 Recital 5 in the preamble to Directive 2015/1513.

in light of the short time fra me between the entry into force of RED II and the deadline set in
Article 26(2) of RED II.17
21. Similar to RED II, Delegated Regulation 2019/807 states that ILUC "can occur when land
previously devoted to food or feed production is converted to produce biofuel s, bioliquids and
biomass fuels" but, taking into account that food and feed demands still need to be satisfied, "may
lead to the extension of agricultural land into areas with high carbons stock such as forests, wetlands
and peatland, causing additional greenhouse gas emissions".18
22. Delegated Regulation 2019/807 establishes criteria for determining what are high ILUC -risk
feedstock and low ILUC-risk biofuels, bioliquids or biomass fuels.
23. Article 3 identifies the cumulative criteria that apply for determining what is high ILUC -risk
feedstock for which a significant expansion of the production area into land with high -carbon stock
is observed. In particular, high ILUC-risk feedstock is identified by reference to the average annual
expansion of the production area since 2008 and a formula express ing the share of that expansion
into land with high-carbon stock.
24. Article 3 must be read together with the Annex to Delegated Regulation 2019/807. That annex,
organised according to three categories of food or feedstock (cereals, sugar crops and oil crops) and
individual types of oil crops (such as rapeseed, palm oil, soybean and sunflower oil crops), lists fixed
values for: (i) the first criterion in Article 3(a) expressed in kilo hectare (kha) and percentage points
and (ii) the shares operating as constan ts in the formula. Article 3 sets the fixed value of the
productivity factor for each individual type of feedstock. When the fixed values and constants are
used for, for example, the various oil crops, the criteria set out in Article 3 mean that only palm oil
is considered to be a high ILUC-risk feedstock.
25. As a result, in accordance with Article 26(2) of RED II read together with Delegated Regulation
2019/807, palm oil is the only feedstock that is high ILUC-risk and of which the share in the target
of renewable energy must be gradually reduced and, ultimately, fully eliminated by 2030. For other
feedstock, the same limitation and phase-out requirements do not apply.
26. Although the European Union has produced a report on the status of production expansion of
relevant food and feed crops worldwide, that Status Report offers no adequate (scientific) basis for
the criteria defined in Article 3 of Delegated Regulation 2019/807 and the fixed values and constants
used in that provision and in the Annex to Delegated Regulation 2019/807.
27. These measures are concerned with regulating trade in biofuels without finding a basis in the
performance of such biofuels.
28. They discriminate against palm oil and oil palm crop -based biofuels which are primarily
imported into the European Union, in favour of like products that are either of EU origin or imported.
They also discourage imports of palm oil and oil palm crop -based biofuels into the European Union
and eventually will result in excluding palm oil and oil palm crop-based biofuels from the EU market.
Given that Indonesia is the largest exporter of palm oil to the European Union, these measures affect
particularly Indonesia. The European Union relies on the concept of ILUC but it accepts that there is
no sound scientific basis f or this concept because "ILUC cannot be observed or measured ".19 The
European Union has also acknowledged that "ILUC emissions cannot be measured with the level of
precision required to be included in the EU GHG emission calculation methodology".20
29. By relying on ILUC, the European Union has also departed from relevant standards adopted
by, inter alia, the International Organization for Standardization ( "ISO"). The European Union has
done so without providing the required publication and notification of these measures and organising
an adequate process for commenting. The European Union has also prepared and adopted these
measures without taking into account circumstances specific to the developing countries where palm

17 European Commission, Explanatory Memorandum to the Commission's proposal for Delegated
Regulation 2019/807, C(2019) 2055 final (13 March 2019), p. 1.
18 Recital 2 in the preamble to the Delegated Regulation.
19 Status Report, p. 4.
20 Status Report, p. 4. See also recital 81 in the preamble to RED II.

oil and oil palm crop -based biofuels are produced. These measure lack also transparency and an
objective basis.
30. Despite requests to that effect, the European Union has failed to adequately explain the
justification of these measures.
The criteria for determining and certifying low ILUC-risk biofuels

31. Under RED II, an exemption to the high ILUC -risk cap and phase -out applies for biofuels,
bioliquids or biomass fuels certified as "low ILUC-risk". Low ILUC-risk biofuels, bioliquids and biomass
are defined as "biofuels, bioliquids and biomass fue ls, the feedstock of which was produced within
schemes which avoid displacement effects of food and feed -crop based biofuels, bioliquids and
biomass fuels through improved agricultural practices as well as through the cultivation of crops on
areas which we re previously not used for cultivation of crops, and which were produced in
accordance with the sustainability criteria for biofuels, bioliquids and biomass fuels laid down in
Article 29".21
32. Article 4, read together with Article 5, of Delegated Regulation 2019/807 identifies the
cumulative criteria that must be met in order to classify biofuels, bioliquids and biomass fuels as low
ILUC-risk. These criteria include the sustainability and GHG emission savings criteria and the need
to comply with additionality requirements. Because of the criteria set out in Article 3, all of the
conditions laid down in Articles 4 and 5 of Delegated Regulation 2019/807 apply solely to biofuels
made from oil palm crops. It follows that only oil palm crop -based biofuels must be classified, and
certified, as low ILUC-risk in order to count towards the EU renewable energy targets or benefit from
Member States ' support schemes. In any event, the conditions set out in Articles 4 and 5 of
Delegated Regulation 2019/807 are designed in a manner so as to preclude any oil palm crop-based
biofuels from meeting them.
33. In order to establish conformity with the low ILUC -risk criteria, and obtain certification,
Article 6 refers to the need to submit reliable information, to arrange for an adequa te standard of
independent auditing and proof of auditing and to comply with Article 30 of RED II. Additional rules
governing certification of biofuels, bioliquids and biomass fuels as low ILUC -risk will be adopted by
the Commission. Those additional rules to be adopted are also covered by this panel request.
34. These procedures are discriminatory in respect of suppliers of oil palm crop -based biofuels
from Indonesia and restrict imports of Indonesian palm oil and oil palm crop-based biofuels.
35. While it appears that the criteria for low ILUC -risk biofuels exclude the possibility of oil palm
crop-based biofuels meeting those criteria, adequate certification procedures, in any event, appear
to be lacking. In laying down the conditions for assessing conformity with the low ILUC-risk criteria,
and obtain certification, the European Union has not respected relevant international standards.
36. The European Union has done so without providing the required publication and notification
of these measures and organising an adequate process for commenting. The European Union has
also prepared and adopted these measures without taking into account circumstances specific to the
developing countries where palm oil and oil palm crop-based biofuels are produced.
37. Despite requests to that effect, the European Union has failed to adequately expl ain the
justification of these measures.
The sustainability and GHG emission savings criteria

38. Biofuels, bioliquids and biomass fuels must fulfil, inter alia , the sustainability and GHG
emission savings criteria in RED II, which expand on the criteria foun d in RED I. The sustainability
criteria are laid down in Article 29(2) -(7); the GHG emission savings criteria are found in
Article 29(10). Those criteria apply to biofuels, bioliquids and biomass used for meeting the EU
renewable energy targets, measuring compliance with renewable energy obligations or being eligible

21 Article 2(37) of RED II.

for financial support under the support schemes for the consumption of biofuels, bioliquids and
biomass fuels.22
39. Compliance with the sustainability and GHG emission savings criteria is to be ve rified.
Voluntary national or international standard setting schemes may be used subject to the
Commission's approval.23
40. Those measures, including through (but not limited to) the use of default values in calculating
GHG emission savings, discriminate against palm oil and oil palm crop -based biofuels which are
primarily imported into the European Union, in favour of like products that are either of EU origin or
imported. They also discourage imports of palm oil and oil palm crop -based biofuels into the
European Union and eventually will exclude palm oil and oil palm crop -based biofuels from the EU
market. Given that Indonesia is t he largest exporter of palm oil to the European Union, these
measures affect particularly Indonesia.
b. EU Member States' measures

41. The EU Member States' measures are laid down in the following legal instruments:
i. Article 266 quindecies of the French Customs Code, as modified by Article 192 of the
Law no 2018-1317 on 28 December 2018 for 2019 finances;24
ii. Article L. 661-2 of the French Energy Code;25
iii. French D ecree no 2019 -570 of 7 June 2019 on the incentive tax relating to the
incorporation of biofuels, JORF no 0133 of 9 June 2019, no. 13;26
iv. French Decision of 23 November 2011 modified taking into account the application of
the order n° 2011 -1105 of 14 Septembe r 2011 and Decree no 2011 -1468 of
9 November 2011, relating to the sustainability of biofuels and bioliquids;27
v. French Decision of 2 May 2012 relating to the energy content of biofuels and fuels.28
vi. French Circulaire of 12 June 2019 – Tax relating to the incorporation of biofuels
("TRIB"), NOR: CPAD1917078C;29 and
any annexes thereto, amendments, supplements, replacements, r enewals, extensions,
implementing (including any implementing measures envisaged in the above -mentioned legal
instruments) measures or any other related measures, and any exemptions applied.
42. Since the entry into force of RED I and its recast version, RED II, Member States have adopted
and are likely to adopt legislation excluding palm oil and/or oil palm crop -based biofuels from
measures taken to meet the renewable energy targets.
43. These measures include, but are not limited to, tax measures adopted by Fran ce that
incentivise the consumption of biofuels in order to meet the targets imposed by EU law. In particular,
France has introduced an annual tax on the making available of fuel for consumption ( "the French

22 Articles 7(1) and 29 of RED II. See also recital 94 in the preamble to RED II.
23 Article 30(4)-(7) of RED II.
24 Available at:
https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000037993315&cidTexte=LEGITEXT00
0006071570&dateTexte=20190101.
25 Available at
https://www.legifrance.gouv.fr/affichCodeArticle.do?idArticle=LEGIARTI000028418337&cidTexte=LEGITEXT00
0023983208&dateTexte=20160101.
26 Available, at:
https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000038566562&categorieLien=id.
27 Available at: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000024851601.
28 Available at:
https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000025838709&categorieLien=id.
29 Available at: http://circulaires.legifrance.gouv.fr/pdf/2019/06/cir_44749.pdf.

fuel tax "). The French fuel tax applies when the designated products are released for fuel
consumption within the territory of France.
44. The French fuel tax is designed and structured in such a manner that the rate of that tax
decreases as the share of renewable energy sources in the fuel increases. For the purpose of that
legislation, biofuel is sustainable if it satisfies the sustainability criteria in RED I (which are now
included and expanded upon in RED II). However, the benefit that would accrue as a result of those
tax measures is, starting from 1 January 2020, not available in respect of palm oil because French
law expressly excludes from the definition of biofuels oil palm crop -based biofuels, regardless of
whether they are sustainable or not. The introduction of that exclusion is linked to RED II and
Delegated Regulation 2019/807. As a result, for the purpose of the French fuel tax, oil palm
crop-based biofuels are excluded from the concept of biofuels. The Circulaire of 12 June 2019 further
confirms the intention of the French legislator to exclu de products based on palm oil from the
definition of biofuels and the concept of renewable energy.
45. By not making the reductions to the fuel tax available for oil palm crop -based biofuels, the
French measures discriminate against oil palm crop -based biofuels, which are primarily imported
into the European Union, in favour of other crop -based biofuels that are either produced in the
European Union or imported.
46. By providing for reductions to the fuel tax for biofuels from specific feedstock, France in effect
foregoes government revenue that is otherwise due and thereby confers a benefit to the producers
of those biofuels. By excluding oil palm crop -based biofuels from those tax reductions , the French
fuel tax is designed and operates in such a manner so as to impede and displace imports of oil palm
crop-based biofuels from Indonesia into the French market. The French fuel tax also results in lost
sales of oil palm crop-based biofuels from Indonesia in the French market.
B. Legal basis for the complaint in respect of the EU measures

47. The EU measures appear to be inconsistent with the following obligations under the
TBT Agreement and the GATT 1994, in particular:
TBT Agreement

i. by limiting and phasing out the use of oil palm crop -based biofuels for meeting EU
renewable energy targets, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
and by imposing the 7 % limitation, the measures at issue appear to creat e
unnecessary obstacles to international trade in palm oil and oil palm crop -based
biofuels going beyond what is required for achieving a legitimate objective, in violation
of Article 2.2 of the TBT Agreement;
ii. by limiting and phasing out the use of oil pal m crop-based biofuels for meeting EU
renewable energy targets, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
without defining other crops as high ILUC-risk and subjecting other like biofuels to the
low ILUC-risk criteria, the measures at issue appear to discriminate among like biofuels
of different origins, in violation of Article 2.1 of the TBT Agreement;
iii. by limiting and phasing out the use of oil palm crop -based biofuels for meeting EU
renewable energy targets, taking into account also the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
without defining other crops as high ILUC-risk and subjecting other like biofuels to the
low ILUC-risk criteria, the measures at issue appear to discriminate between imported
oil palm crop-based biofuels and like biofuels of EU origin, in violation of Article 2.1 of
the TBT Agreement;
iv. by limiting and pha sing out the use of oil palm crop -based biofuels for meeting EU
renewable energy targets, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
and by imposing the 7 % limitation, without using relevant international standards,

the European Union appears to have failed to use relevant international standards as
a basis for its technical regulations, in violation of Article 2.4 of the TBT Agreement;
v. by preparing, adopting or applying the limitation and phasing out requirements for oil
palm crop -based biofuels, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
the European Union appears to have failed, upon the request of Indonesia, to explain
the justification for those measures in terms of Articles 2.2 to 2.4 of the
TBT Agreement, in violation of Article 2.5 of the TBT Agreement;
vi. by regulating trade in biofuels based on a de scription of an abstract and
unsubstantiated high-ILUC risk concept instead of the performance of such biofuels,
the European Union appears to have failed to act in accordance with Article 2.8 of the
TBT Agreement;
vii. by adopting a technical regulation that h as a significant effect on trade of other
Members in circumstances where either a relevant international standard does not
exist or the content of the technical regulation does not accord with a relevant
international standard without the required publicat ion and notification of that
regulation and organising an adequate process for commenting, the European Union
appears to have failed to act in accordance with Article 2.9 of the TBT Agreement;
viii. by preparing, adopting or applying conformity assessment proced ures for certifying
only oil palm crop -based biofuels as low ILUC -risk, the European Union appears to
treat suppliers of oil palm crop -based biofuels from Indonesia less favourably than
suppliers of like biofuels from other countries, in a comparable situa tion, in violation
of Article 5.1.1 of the TBT Agreement;
ix. by preparing, adopting or applying conformity assessment procedures for certifying oil
palm crop -based biofuels as low ILUC -risk, the European Union appears to create
unnecessary obstacles to intern ational trade, in violation of Article 5.1.2 of the
TBT Agreement;
x. by failing to make available conformity assessment procedures for certifying oil palm
crop-based biofuels as low ILUC -risk, the European Union appears to have failed to
comply with the obligations under Article 5.2 of the TBT Agreement;
xi. by requiring certification that has a significant effect on trade of other Members in
circumstances where either a relevant international standard does not exist or the
content of the conformity assessment pr ocedures does not accord with a relevant
international standard without the required publication and notification of that
certification procedure and organising an adequate process for commenting, the
European Union appears to have failed to act in accorda nce with Article 5.6 of the
TBT Agreement;
xii. by failing to publish promptly or otherwise make available the conformity assessment
procedures for low ILUC-risk certification, the European Union appears to have acted
contrary to Article 5.8 of the TBT Agreement.
xiii. by failing to take into account, in the preparation and application of the technical
regulations and conformity assessment procedures at issue, circumstances specific to
the developing countries where palm oil and oil palm crop-based biofuel are produced,
the European Union appears to have failed to ensure that those measures do not create
unnecessary obstacles to exports from developing country Members, in violation of
Articles 12.1 and 12.3 of the TBT Agreement;
GATT 1994

xiv. by limiting and phasing out the use of oil palm crop -based biofuels for meeting EU
renewable energy targets, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,

by imposing the 7 % limitation, and by imposing the sustainability criteria and the
GHG emission savings criteria, the measures at issue appear to restrict importation of
palm oil and oil palm crop-based biofuels, in violation of Article XI:1 of the GATT 1994;
xv. by limiting and phasing out the use of oil palm crop -based biofuels for meeting EU
renewable energy targets, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
without defining other crops as high ILUC-risk and subjecting other biofuels to the low
ILUC-risk criteria, and by imposing the sustainability criteria and the GHG emission
savings criteria, the measures at issue appear to discriminate among like crops and
biofuels originating in third countries, in violation of Article I:1 of the GATT 1994;
xvi. by limiting and phasing out the use of oil palm crop -based biofuels for meeting EU
renewable energy targets, taking into account the criteria for determining high
ILUC-risk feedstock and the criteria for classifying and certifying low ILUC-risk biofuels,
without defining other feedstock as high ILUC-risk and subjecting other like biofuels to
the low ILUC -risk criteria, and by imposing the sustainability criteria and the GHG
emission savings criteria, the measures at issue appear to discriminate between
imported palm oil and oil palm crop -based biofuels and like products of EU origin, in
violation of Article III:4 of the GATT 1994; and
xvii. by adopting the criteria laid down in Articles 3 t o 5 of Delegated Regulation
2019/807, the European Union appears to have failed to administer RED II in a
reasonable, impartial and uniform manner, in violation of Article X:3(a) of the
GATT 1994.
C. Legal basis for the complaint in respect of the EU Member States' measures

48. The EU Member States ' measures appear to be inconsistent with the following obligations
under the GATT 1994 and the SCM Agreement:
i. by making reductions to the fuel tax available for oil crop-based biofuels but excluding
oil palm cr op-based biofuels from those reductions, such measures appear to
discriminate among like biofuels originating in third countries, in violation of Article I:1
of the GATT 1994;
ii. by making reductions to the fuel tax available for oil crop-based biofuels but excluding
oil palm crop -based biofuels from those reductions, such measures appear to
discriminate between imported oil palm crop -based biofuels and other biofuels of
domestic origin, in violation of Article III:2 of the GATT 1994; and
iii. by making reductions to the fuel tax available for crop-based biofuels but excluding oil
palm crop-based biofuels from those reductions, such measures appear to amount to
a subsidy within the meaning of Article 1.1(a)(ii) of the SCM Agreement, that confers
a benefit on produce rs of biofuels other than palm oil -based biofuels and is specific
within the meaning of Article 2 of the SCM Agreement, that has an adverse effect on
the interests of Indonesia and, in particular, constitutes serious prejudice to the
interests of Indonesia pursuant to Article 5(c) of the SCM Agreement, apparently
contrary to Articles 3.1(b) and 5 of the SCM Agreement.
D. Conclusion

49. Accordingly, Indonesia respectfully requests that the Dispute Settlement Body establishes a
panel to examine this matter, with standard terms of reference as set out in Article 7.1 of the DSU.
In light of your communication dated 17 March 2020 regarding the postponement of Dispute
Settlement Body meeting scheduled for 30 March 2020, we respectfully ask that this request of
panel est ablishment could be inscribed in the agenda of the earliest Dispute Settlement Body
meeting held after the date of this request.

Please accept, Mr. Chairperson, the assurances of my highest consideration.