The World Trade Organization's (WTO) dispute settlement body (DSB) has agreed to Indonesia's second request to set up a panel examining the European Union's palm policies in biofuels.
Indonesia's first request was blocked at the DSB meeting on 29 June but was granted at the second time of asking last week.
Indonesia, the world's largest palm oil producer, maintains that Europe's Renewable Energy Directive (RED) II unfairly discriminates against the vegetable oil and is inconsistent with provisions in the WTO's goods, subsidies and technical barriers to trade agreements.
Malaysia also backed the claim as RED II, which will effectively phase out palm oil from European biofuels by 2030 based on indirect land use change criteria, prohibits its use and restricts trade.
The EU said it was confident it would prevail in the dispute and was ready to discuss reciprocal interim arrangements to maintain the appeals process. The WTO currently does not have a functioning appellate body, complicating the arbitration process.
The panel will have six to nine months to issue its findings. The United States, Malaysia, Norway, Turkey, Singapore, Thailand, Russia, Japan, Korea, India, Honduras, Guatemala, Costa Rica, Colombia, China, Canada, Brazil and Argentina reserved their third party rights to participate in the proceedings.
