Indonesia urges EU to remove countervailing duty on biodiesel after WTO ruling

Indonesia’s trade ministry on Monday (Aug 25) urged the European Union to immediately remove countervailing duties on biodiesel imports, after the World Trade Organization (WTO) backed the South-east Asian country on several key claims in a complaint to the trade body.

Indonesia brought its complaint to the WTO in 2023, alleging the EU’s imposition of duties on imports of its biodiesel broke the body’s rules.

“We urge the EU to immediately revoke these countervailing import duties that are not WTO-compliant,” said Indonesian Trade Minister Budi Santoso in a statement, after the WTO’s ruling last week.

“This victory proves that the Indonesian government consistently complies with international trade rules without implementing distorting trade policies,” he added.

The EU, Indonesia’s third-largest destination for palm oil products and one of Indonesia’s major markets for biodiesel, has imposed countervailing duties of 8 to 18 per cent since 2019, alleging Indonesian biodiesel producers benefit from grants, tax benefits and access to raw materials below market prices.

The trade ministry said that the WTO panel had assessed that Indonesia’s export duty and export levy on palm oil could not be categorised as a subsidy, and that the EU Commission failed to prove a threat of material harm to European biodiesel producers caused by Indonesian biodiesel imports.

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“Therefore, WTO panel determined that the countervailing duty that the EU imposed on Indonesian biodiesel was not based on objective evidence,” Budi said.

Indonesia’s palm oil-based biodiesel exports plunged to 36,000 kilolitres in 2020 from 1.32 million kilolitres in 2019. In 2024, Indonesia exported 27,000 KL of biodiesel.

The finding can be appealed, but no final ruling is possible since the WTO’s top appeals court is no longer operational.

The WTO Appellate Body ceased functioning in 2019 due to repeated blockages of judge appointments by the first administration of US President Donald Trump. REUTERS