Jakarta (Brussels Morning Newspaper) – Indonesia called on the European Union on Monday to immediately eliminate countervailing duties on biodiesel imports, following the World Trade Organization’s support for several of Jakarta’s key claims in its complaint.
“We urge the EU to immediately revoke these countervailing import duties that are not WTO-compliant,”
Indonesian Trade Minister Budi Santoso stated in a statement.
The trade ministry said the WTO panel found that Indonesia’s export tax and levy on palm oil are not a subsidy. The world’s largest palm oil exporter noted in its complaint in 2023 that the EU, Indonesia’s third biggest market for palm oil products, had breached the WTO’s rules and regulations by imposing a tariff.
Why did the EU impose duties on Indonesian producers?
The EU has levied duties on Indonesia’s biodiesel industry from 8% to 18% since 2019, because it believes Indonesian producers have been benefiting from unfair government handouts. They also highlighted that Southeast Asia biodiesel manufacturers benefit from grants, tax advantages, and access to raw materials at market price.
As reported, the European Commission found that Indonesian biodiesel producers did receive public grants, tax exemptions, and access to raw materials at or below the market rate. Resultantly, it created an unfair competitive advantage to the EU biodiesel producers, according to the EU. It was decided by the European Commission that these subsidies had an economic impact on the EU Biodiesel Industry.
What did the WTO ruling decide on biodiesel duties?
The WTO panel concluded that the EU’s duties, which ranged from 8% to 18% and have been in place since 2019, violated WTO rules. The panel found that Indonesia’s export duties and levies on palm oil do not qualify as subsidies under WTO rules, and the EU failed to provide sufficient evidence that Indonesian biodiesel imports caused material harm to European producers.
The WTO recommended that the EU bring its measures into compliance with WTO obligations. The Indonesian Palm Oil Association, GAPKI, expressed its support for the WTO ruling and urged the European Commission to ensure that upcoming regulations, especially the EU deforestation regulation, do not discriminate against Indonesian palm oil.
