The 12-month window for the European Union to comply with a World Trade Organization ruling in favour of Indonesian palm oil expired on Tuesday, February 24, 2026, clearing the way for Jakarta to assess whether Brussels has dismantled its discriminatory biofuel rules.

Trade Minister Budi Santoso confirmed the expiry of the reasonable period of time (RPT) that the WTO dispute settlement panel granted the EU to amend regulations inconsistent with global trade norms. The ruling was adopted on February 24, 2025.

The WTO panel issued its decision on January 10, 2025 in dispute case DS593. It found that EU policies unfairly discriminated against biodiesel made from Indonesian palm oil, treating Indonesian biofuels less favourably than similar products from the EU and other countries and thereby violating the WTO's principle of nondiscrimination.

"We urge the EU to immediately comply with the WTO panel ruling so that market access for Indonesian palm oil products in the EU can be quickly restored," Budi said in a statement on Tuesday.

What is Indonesia reviewing?

Jakarta is preparing to scrutinise Brussels' policy adjustments, focusing on the bloc's controversial Indirect Land Use Change (ILUC) rules in the Renewable Energy Directive II (RED II) and related implementing regulations.

The compliance assessment will cover:

• Any regulatory changes the EU has made;
• Methodological adjustments;
• Tangible impacts on trade flows.

The EU itself has conceded ground. At a regular session of the WTO's Dispute Settlement Body on January 27, 2026, the bloc admitted that its policy adjustments to accommodate the ruling were incomplete at that time.

"Indonesia has prepared various scenario options if, upon the expiration of the RPT, the EU has not demonstrated full compliance," Budi said. "The Indonesian government is ready to discuss with the EU to ensure legal and technical readiness, should further steps be required."

The government is coordinating with business associations and stakeholders to ensure legal certainty for the domestic palm oil industry.

What did the WTO actually find?

The stakes are substantial. The EU ranks as the third-largest destination for Indonesian palm oil products and a major market for Indonesian biofuels. Since 2019, the bloc has imposed countervailing duties of 8 to 18 per cent, alleging that biodiesel producers in Southeast Asia's largest economy benefited from grants, tax incentives and below-market raw material prices.

According to the Trade Ministry, the WTO assessed that Indonesia's palm oil export duties and levies could not be categorised as a subsidy. The European Commission also failed to prove that Indonesian biodiesel imports posed a "threat of material harm" to European biofuel producers.

Budi stressed that Indonesia remains committed to environmental sustainability and the global energy transition, but these "cannot justify protectionist measures".

"Sustainability policies cannot be used as a basis for implementing measures that contradict the fundamental principle of nondiscrimination in the multilateral trading system," he said.

What does the expiry mean for practitioners?

For trade counsel on both sides, the expiry of the RPT marks a procedural inflection point. If Indonesia finds the EU has not achieved full compliance, Jakarta can pursue enforcement steps under WTO dispute settlement procedures, including potential retaliation authorisation — a route Budi's reference to "scenario options" signals Jakarta has mapped out. Trade lawyers advising EU-side clients will now need to audit RED II implementing measures against the panel's findings, while counsel for Indonesian exporters should track any DSB proceedings and prepare documentation on trade-flow impacts to support Jakarta's assessment.

The commercial backdrop is already optimistic. Following the legal victory, the government set a 6.7 per cent growth target for biodiesel exports to the EU in 2026.

Djatmiko Bris Witjaksono, the Trade Ministry's director general of international trade negotiations, said the target aligns with the average export growth for biodiesel recorded over the past four years. "If possible, we will maintain that figure going forward," he said in Jakarta on August 28, 2025, as quoted by Bloomberg Technoz.