EU Delays Deforestation Ban but Discards Changes 

 

Negotiators for EU institutions agreed a compromise on Tuesday on a ban on the import of commodities linked to deforestation, which will be delayed by a year but without changes proposed by EU lawmakers. 

 

The European Commission in October proposed a 12-month delay until Dec. 30, 2025 after complaints from 20 EU countries, some companies and countries such as Brazil and Indonesia. EU governments backed the move. 

 

However, EU lawmakers voted last month not only to delay the EU Deforestation Regulation, but also to water it down by proposing a new 'no risk' category of countries with vastly reduced checks. These would principally have been EU members. 

 

Negotiators for EU governments and lawmakers met late on Tuesday and agreed on the 12-month delay, but with no changes to the existing rules. 

 

Large operators and traders will have to respect the obligations from Dec. 30, 2025, and small enterprises six months later, a delay designed to allow companies around the world to adapt. 

 

The Commission committed to assess whether requirements could be simplified for countries that have sustainable forest management practices. 

 

The Commission will also commit to have the online system for companies operational by December 2025 and to propose the country risk classification at least six months before. 

 

The European People's Party, the largest parliamentary group, which pushed for further changes, welcomed these add-ons. 

 

The Greens group described the compromise of a delay with no amendments as a "partial but significant victory". 

 

The deforestation regulation aims to root deforestation out of supply chains for beef, soy, wood, cocoa, palm oil, coffee and rubber sold in Europe, so that EU consumers are not contributing to the destruction of forests from the Amazon to Southeast Asia. 

 

It was hailed as a landmark in the fight against climate change, but emerging market countries from Brazil to Indonesia say it is protectionist and could exclude millions of poor, small-scale farmers from the EU market. 

 

Source: Reuters 

Inflation Drops Further to Just Above Low End of BI Target Range  

 

The BPS revealed on Monday that Indonesia's inflation rate dropped to 1.55 percent in November, just 0.05 percentage point above the lowest end of BI's target range, marking the slowest annual rise since July 2021. 

 

The inflation rate in Indonesia dropped to 1.55 percent in November, according to official data published on Monday, inching closer to the low end of Bank Indonesia's (BI’s) target range of between 1.5 percent and 3.5 percent. 

 

The figure marks the slowest year-on-year (yoy) rise in the consumer price index (CPI) since July 2021, when the country, like most of the world, was reeling economically from the blow of the COVID-19 pandemic. 

 

Statistics Indonesia (BPS) interim head Amalia Adininggar Widyasanti told a press conference on Monday in Jakarta that the CPI for November had increased 0.3 percent month-to-month (mtm), higher than the 0.08 percent monthly increase recorded in October.  

 

The key items driving up overall consumer prices in November were food products like shallots, tomatoes, chicken and cooking oil, but gold jewelry also contributed, she said. 

 

Global spot prices of the precious metal have rallied around 30 percent over the past year. “Gold jewelry commodities have continued to experience inflation over the past 15 months,” Amalia said during Monday’s press conference, which was broadcast live.  

 

She also pointed to a seasonal effect on the shallot harvest that drove up the staple food’s prices in November: “July, August and September are the peak of the dry season. The Agriculture Ministry noted that shallot planting by farmers in the August-September period for harvesting in November was low [...] which led to a decrease in shallot production.” 

 

Core inflation, which strips out government-controlled prices and volatile food prices from the headline figure, reached 2.21 percent in November, the highest since July 2023.  

 

BI does not have a target for core inflation, but its officials often say the central bank’s interest rate policy is also aimed at managing core inflation, which better reflects demand pressures.  

 

In a statement issued on Monday, Bank Danamon predicted that BI was likely to remain cautious amid easing domestic inflation, as its focus remained on preventing excessive currency movements.  

 

“However, there is room for a rate cut in December in line with expectations of a 25-basis-point [bps] reduction during the Federal Reserve’s FOMC meeting from Dec. 17 to 18,” the statement said, referring to the Federal Open Market Committee of the United States central bank.  

 

Gold traded lower on Monday on a firmer dollar and profit booking while investors awaited key US economic data for cues on the Fed’s monetary policy outlook, Reuters reported. 

 

Key US economic data is due to be released this week that could influence market expectations for monetary policy, while speeches from Fed officials including chairman Jerome Powell will also draw attention, Reuters reported. 

 

Indonesia’s central bank projected an economic growth range of 4.7-5.5 percent for 2024, with a subsequent increase to 4.8-5.6 percent in 2025 and then to 4.9-5.7 percent in 2026, BI Governor Perry Warjiyo said during the BI Annual Meeting 2024 on Friday. 

 

Source: The Jakarta Post 

ExxonMobil Commits USD 15 Bn to Indonesia's Carbon Capture Efforts 

 

The US-based multinational oil and gas company ExxonMobil is committed to pumping USD 15 billion in investment into advancing carbon capture and storage (CCS) technology in Indonesia. 

 

Minister of Investment and Downstream and Head of the Investment Coordinating Board Rosan Roeslani affirmed that ExxonMobil President Director Carole Gall expressed her interest to President Prabowo Subianto during a meeting with dozens of other US businessmen at the State Palace on Tuesday. 

 

"She also conveyed her commitment with a quite significant figure," Roeslani remarked in a press statement at the Presidential Palace on Tuesday. 

 

The investment interest came from ExxonMobil which had stated that the British oil and gas company, British Petroleum (BP), had also expressed its investment commitment in Indonesia worth USD 7.7 billion, he said. 

 

Responding to BP's investment, ExxonMobil committed to a significantly larger $15 billion investment in the country, as Roeslani clarified. 

 

During the meeting, Prabowo emphasized no tolerance for corruption that has the potential to hinder investment. 

 

Roeslani said the president also promised those entrepreneurs that enforcing legal regulations would provide a sense of comfort for investors in Indonesia. 

 

He revealed that some investors were keen to invest in Indonesia. However, they are eager to increase the investment value since the Indonesian government has committed to supporting an optimal investment climate. 

 

"They said they would invest more because they believed in President Prabowo's administration, which has shown its commitment to improve the investment climate in Indonesia and develop the ease of doing business here," the minister explained. 

 

Entrepreneurs from various industries, such as healthcare, food and beverage, tourism, pharmaceuticals and medicines, minerals, oil and gas, and digitalization, attended the meeting and expressed their enthusiasm regarding the investments. 

 

Other attendees at the meeting comprised Minister of Foreign Affairs Sugiono, Coordinating Minister for Economic Affairs Airlangga Hartanto, US Ambassador to Indonesia Kamala Shirin Lakhdir, and Chairman of the Advisory Board of the Indonesian Chamber of Commerce and Industry Hashim Djojohadikusumo. 

 

Deputy Minister of Finance Thomas Djiwandono and President and CEO of the US-ASEAN Business Council Ambassador Ted Osius were also present at the meeting. 

 

Source: Antara News