Indonesia on Monday urged the European Union to lift its countervailing duties on Indonesian biodiesel imports following a panel ruling on the DS618 trade dispute at the World Trade Organization (WTO).
“We urge the EU to immediately revoke the countervailing duties that are not in line with WTO rules,” Indonesian Trade Minister Budi Santoso said in a statement.
On Friday, a WTO panel upheld Jakarta’s claims, concluding that the EU’s countervailing duties on Indonesian biodiesel imports did not align with several principles of the organization’s trade rules.
In August 2019, the European Union imposed anti-subsidy duties ranging from 8 to 18% on biodiesel imports from Indonesia. Under WTO rules, such duties are permitted only if a formal investigation confirms foreign governments are subsidizing the exports. The European Commission introduced the tariffs, alleging that the Indonesian government was granting unfair subsidies to its biodiesel producers.
According to the EU, the subsidies were delivered through various mechanisms, including policies on raw material access, export taxes and levies, and the setting of reference prices in the palm oil industry. The bloc argued that the measures disrupted market dynamics and negatively impacted its domestic biodiesel industry.
The European Commission conducted an inquiry revealing that biodiesel manufacturers in Indonesia were benefiting from substantial government support ranging from financial grants and tax incentives to preferential access to raw materials. These advantages allowed them to offer the products at reduced prices. The Commission further alleged that such subsidized imports pose a risk to domestic producers within the EU.
The countervailing duties led Jakarta to file a lawsuit against the EU in 2023. A WTO panel determined that the EU had not conducted an objective assessment during its investigation, especially concerning whether the imports could cause harm to European biodiesel producers. Although the ruling remains open to appeal, the WTO’s appellate body, responsible for handling such cases, is currently non-operational.
The European Union has not yet released an official statement regarding the WTO ruling. However, Budi Santoso declared that Indonesia has won the case.
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