Gap Analysis on Sustainable Supply Chain Model Derived from EU RED II and Ispo 2015
Palm oil today is consumed not only for health, cooking, and other daily product but also converted into biodiesel. The EU has included the use of biodiesel as part of their clean energy for transportation and one of its sources is palm oil. However, with the release of the EU RED II, the food and feedstock used for biodiesel are selected more stringent today. The EU requires the food and feedstock sourced for biodiesel to be categorized as low indirect land-use change (ILUC) risk and those categorized as high ILUC-risk shall be gradually phased out to 0% by 2030. This provision applies to Indonesia’s palm oil making the two countries come to file a dispute to the World Trade Organization (WTO). This paper aims to analyze the lacking of Indonesia’s palm oil sustainable cultivation measures that make Indonesia’s palm oil usage in the EU threatened to be phased out to 0% by 2030. With an extensive literature review and analysis of the two law products, this paper is analyzing the gap between the EU regulation and the ISPO certification system. It is found that there are 16 main points of difference highly concentrated on carbon emission calculation mismatch. In the end, this paper is proposing a new SCOR to be implemented in Indonesia palm oil cultivation while adjusting to its condition to ensure the low ILUC-risk and pursue the trade with the EU as the second biggest market for palm oil in the world.
Basiron, Y. (2007) Palm oil production through sustainable plantations. European Journal of Lipid Science and Technology, 109, 289-295.
Carter, C., Finley, W., Fry, J., Jackson, D. and Willis, L. (2007) Palm oil markets and future supply. European Journal of Lipid Science and Technology, 109, 307-314.
Carter, Craig. (2008). A Framework of Sustainable Supply Chain Management – Moving Toward New Theory. DOI: 10.1108/09600030810882816
Craw, M. (2019). Palm Oil Smallholders and Land-use Change in Indonesia and Malaysia: Implications for the Draft EU Delegated Act of the Recast Renewable Energy Directive. Reported commissioned by Rainforest Foundation Norway
Dewi, Rosita. (2013). Implementasi Renewable Energy Directive Uni Eropa Sebagai Hambatan Non Tarif Perdagangan. Interdependence Jurnal Hubungan International Vol.1 No.2, May-August 2013
ECOFYS Final Report. (2016). Methodologies for the Identification and Certification of low ILUC risk biofuels. Ecofys 2016 by order of European Commission
Eur-Lex. (2016). Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Promotion of the Use of Energy From Renewable Sources.Official Journal of The EU. Accessed from https://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX%3A52016PC0767
Eur-Lex. (2018). DIRECTIVE (EU) 2018/2001 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the promotion of the use of energy from renewable source. Official Journal of the EU. Accessed from https://eur-lex.europa.eu/legalcontent/EN/TXT/?qid=1563498455369&uri=CELEX:32018L2001
Fritz, Morgane M.C. (2019). Sustainable Supply Chain Management. DOI:10.1007/978-3-319-71062-4_21-1
Gallagher, E. (2008) The Gallagher Review of the indirect effects of biofuels production. Renewable Fuels Agency. St Leonards-on-Sea. 90p.
GAPKI. (2017). Industri Sawit Merupakan Industri Strategis Nasional. Gabungan Pengusaha Kelapa Sawit Indonesia. Accessed from https://gapki.id/news/1860/industri-minyak-sawitmerupakan-industri-strategis-nasional
GAPKI. (2017). Resolusi Minyak Sawit Uni Eropa & Isu Deforestasi. Accessed from https://gapki.id/news/2389/resolusi-minyak-sawit-uni-eropa-isu-deforestasi
Glenday, Skye. Et.al (2015). Central Kalimantan’s Oil Palm Value Chain – Opportunities for Productivity, Profitability and Sustainability Gains. Working Paper of A CPI, PILAR and Greenworks Asia.
Habibie, Dedi. (2018). Political Economy of Indonesia Sustainable Palm Oil in Riau Province. DOI: 10.2991/aapa-18.2018.3
Harsono, Dina. (2012). Analysis on Indonesian Sustainable Palm Oil (ISPO): A Qualitative Assessment on the Success Factors for ISPO. Jurnal Manajemen & Agribisnis, Vol.9 No. Edisi Khusus Juni 2012
Hutabarat, Sakti. (2017) ISPO Certification and Indonesian Oil Palm Competitiveness in Global Market Smallholder Challenges Toward ISPO Certification. Agro Ekonomi Journal Vol. 28/No.2, December 2017
Khatiwada, Dilip. Et.al (2018). Evaluating The Palm Oil Demand in Indonesia: Producting Trends, Yields and Emerging Issues. DOI: 10.1080/17597269.2018.1461520
Liu, Weihua et al. (2017). A Framework of Sustainable Service Supply Chain Management: A Literature Review and Research Agenda. DOI: 10.3390/su9030421
Malins, Chris. (2018). Driving Deforestation – The Impact of Expanding Palm Oil Demand Through Biofuel Policy. Cerulogy: Regnskogfondet, Norway.
Muller, M and Stefan Seuring. (2008). From a literature review to a conceptual framework for sustainable supply chain management. DOI: 10.1016/j.jclepro.2008.04.020
Murdiyarso, D., Van Noordwijk, M., Wasrin, U., Tomich, T. and Gillison, A. (2002) Environmental benefits and sustainable land-use options in the Jambi transect, Sumatra. Journal of Vegetation Science, 13, 429-438.
Paoli G.D., P. Gillespie, P.L. Wells, L. Hovani, A.E. Sileuw, N. Franklin and J. Schweithelm (2013) Oil Palm in Indonesia: Governance, Decision Making and Implications for Sustainable Development. The Nature Conservancy, Jakarta, Indonesia.
Presiden Republik Indonesia. (2020). Peraturan Presiden Republik Indonesia Nomor 44 Tahun 2020 Tentang Sistem Sertifikasi Perkebunan Kelapa Sawit Berkelanjutan Indonesia
Rainforest Foundation Norway. (2019). Palm Oil Smallholders and Lad-Use Change in Indonesia and Malaysia. Rainforest Foundation Norway: Oslo, Norway
Schoneveld et.al (2019). Certification, good agricultural practice and smallholder heterogeneity: Differentiated pathways for resolving compliance gaps in the Indonesian oil palm sector. DOI: 10.1016/j.gloenvcha.2019.101933
Searie, Stephanie and Jacopo Gluntoli. (2018). Analysis of High and Low Indirect Land Use Change Definitions in European Union Renewable Fuel Policy. The International Council on Clean Transportation Working Paper 2017
Sunaryati, Ridwannulloh. (2018). Determinants of Indonesian Crude Palm Oil Export: Gravity Model Approach. DOI: 10.18196/jesp.19.2.5004
Syah, Rahmadha Akbar. (2019). Mengatasi Embargo Minyak Sawit oleh Uni Eropa: Strategi Indonesia ke Pasar Turki Melalui Diplomasi Ekonomi. Final Project of International Relations study in Pertamina University
Tullis, Paul. (2019). How the World got Hooked on Palm Oil. The Guardian accessed from https://www.theguardian.com/news/2019/feb/19/palm-oil-ingredient-biscuits-shampoo-environmental
Van der Vorst, J.G.A.J. (2004). Supply Chain Management: Theory and Practices. The Emerging World of Chains and Networks, Elsevier, Hoofdstuk 2.1
Verstegen, Judith A., Carina, Stefan C., Andre P.C., Maria J.S. (2019). Recent and Projected Impacts of Land Use and Land Cover Changes on Carbon Stocks and Biodiversity in East Kalimantan, Indonesia. Ecological Indicators 103 (2019) 563–575.
This work is licensed under a Creative Commons Attribution 4.0 International License.