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Abstract
The European Commission proposes a minimum of 10 % biofuels in the total transport fuel use by
2020. The new 10% minimum target in 2020 is combined with the existing regulation, which fixes the
target at 5.75% in 2010. This paper will in particular investigates how a full implementation of the 20-
10-20 targets would affect production and trade of oil plants in the EU and its main trade partners on
this commodity markets, particularly Malaysia and Indonesia. The global general equilibrium model
GLOBE is used to carry out the policy scenarios and to assess the effects on oil palm plantation area
in Malaysia and Indonesia. The results show that the increased EU bio-diesel target will not
significantly influence the expansion of palm oil production in Indonesia and Malaysia.