Adoption of the palm oil moratorium policy in response to the EU’s red II : Indonesia case

Abstract

How did RED II push the Indonesian government to implement a moratorium policy for the palm oil industry? This research investigate how RED II regulations pressured the Indonesian government to adopt the palm oil moratorium policy and why this happened. RED II, or Renewable Energy Directive II, is a continuation policy from the previous RED implemented by the European Union to regulate the use of renewable energy and aims to reduce greenhouse gas emissions. RED II is considered stricter, especially in regulating the use of biofuels derived from palm oil, and the moratorium policy is one of the efforts made by Indonesia after facing various regulations that affect the presence of palm oil in Indonesia. This research uses a qualitative approach to explore the factors that influence Indonesia's decision making in responding to global demands for the sustainability of the palm oil industry, especially after the emergence of RED II. By using Spalding's policy adoption approach, the research results show that the adoption of the moratorium policy in Indonesia is influenced by significant pressure from the European Union, especially the RED II policy, which limits palm oil imports because of its impact on deforestation and climate change. However, these factors are not enough to explain how Indonesia adopted the moratorium and why it happened, thus there are internal factors, namely related to socio-economic conditions and bureaucratic aspects in Indonesia which encourage massive expansion of oil palm plantations. Specifically, the availability of large areas of land encourages continuous expansion because it provides greater economic opportunities. On the bureaucratic side, it refers to the internal dynamics where the moratorium emerged as a response to the government's difficulties and challenges in overcoming the oil palm issue. These internal dynamics can be seen from the overlapping regulations and agencies which are also influenced by the decentralized system in Indonesia and makes coordination between central and regional institutions difficult. This research concludes that these external and internal factors influence each other, thus encouraging Indonesia to adopt a moratorium policy as an effort to overcome difficulties and challenges regarding the sustainability issues of the palm oil industry.