After WTO ruling, Indonesia calls on the EU to remove biodiesel countervailing duties

The Indonesian trade ministry urged on Monday the European Union (EU) to remove immediately countervailing duty on biodiesel imported after the World Trade Organization (WTO) backed Indonesia on several key claims made in a complaint filed with the trade body.

In 2023, Indonesia filed a complaint with the WTO alleging that the EU imposed duties on biodiesel imports from Indonesia in violation of the rules of the body.

After the WTO ruling, the Indonesian Trade Minister Budi Santiso issued a statement.

He added, "This victory shows that the Indonesian Government consistently adheres to international trade rules without implementing distorting policies."

Since 2019, the EU, Indonesia's largest market for biodiesel and third-largest market for palm oil, has imposed countervailing duty of between 8% and 18%, alleging that Indonesian biodiesel manufacturers benefit from subsidies, tax incentives, and access to raw material below market prices.

The Trade Ministry said that a WTO panel determined that Indonesian export duties and export levies on palm oil cannot be classified as subsidies, and that EU Commission has failed to prove that imports of Indonesian biodiesel pose a material threat to European biodiesel manufacturers.

Budi stated that "therefore, the WTO panel concluded that the countervailing duties that the EU imposed against Indonesian biodiesel were not based upon objective evidence."

In 2020, Indonesian palm oil-based exports of biodiesel plummeted to 36,000 kilograms from 1.32 millions kilograms in 2019. Indonesia will export 27,000 KL in 2024.

No final decision can be made as the WTO top appeals court no longer exists.

The WTO Appellate Body ceased to function in 2019 as a result of the repeated blocking of judges by the first U.S. administration led by President Donald Trump.

(source: Reuters)