Indonesia to Focus on Producing Environmentally Friendly CPO Products
Jakarta. The Indonesian government wants to make sure that all crude palm oil-derived products manufactured in the country meet the highest environmental standards, Trade Minister Enggartiasto Lukita said on Thursday (04/08).
"The government has been stepping up efforts to create a sustainable homegrown palm oil industry, ensuring that our production is environmentally friendly and does not contribute to deforestation or climate change," the minister said in a statement.
The Indonesian government has been campaigning for a more environmentally-friendly approach in palm oil production. "All palm oil companies will be asked to get involved in this campaign," Enggartiasto said.
The stepped-up efforts were taken after the French government decided on July 20 to remove a progressive tax on Indonesia's crude palm oil (CPO) products.
France initially wanted to impose a progressive tax up to three times the normal tariff in 2017, which will increase to seven times the normal tariff by 2019 and nine times by 2020. France currently imposes a general $100 import tax per ton of palm oil products.
The French government will will now issue a new non-discriminating fiscal policy to be implemented by January next year. This new policy will apply to all CPO products, including those already in the country.
The Indonesian government rejected the progressive tax, arguing that it violated the World Trade Organization's 1994 General Agreement on Tariff and Trade. France's decision to withdraw the tax was reached after months of intense lobbying by the Indonesian government.
Indonesia is one of the world's biggest palm oil producers along with Malaysia. According to the Indonesian Palm Oil Association (Gapki), the country's CPO export reached 8.23 million tons in the first three months of this year, up 4.5 percent from the corresponding period last year.
However, Indonesia exports a relatively tiny amount of CPO products to France every year, at 100,000 tons.
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