Indonesia urges EU to remove biodiesel import tariffs after WTO ruling

In a ruling on 22 August, the WTO dispute panel said Indonesia’s export duty and export levy on palm oil could not be categorised as a subsidy, the Indonesian Trade Ministry said.

“The EU claimed that Indonesia’s BPDP (the country’s Oil Palm Plantation Fund) operated as a government subsidy that gave unfair advantages to our biodiesel producers. However, the WTO Panel found this was incorrect,” GAPKI chairman Eddy Martono said on 25 August.

“Secondly, the EU claimed there was a ‘threat of injury’ to their industry, but the dispute panel found this was based on assumptions rather than empirical evidence. Without proving real harm, the EU had no valid reason to impose these duties.

“Third, the EU violated transparency rules during their investigation,” Martono added. “They withheld important information from Indonesian exporters, making it impossible for our companies to properly defend themselves.”

The WTO ruling followed a 2023 complaint by the world’s leading palm oil exporter contending that duties levied by the EU – it’s third largest market for palm oil products – broke WTO rules, the 25 August Reuters report said.

The EU introduced duties ranging from 8%-18% from 2019, claiming that Indonesia’s biodiesel producers benefited from grants, tax benefits and access to raw materials below market prices.

GAPKI had called on the European Commission (EC) to re-open the EU market to Indonesian palm-based biofuels and ensure future measures, particularly EU Deforestation Regulation, did not discriminate against Indonesian palm oil, Reuters wrote.

“The Indonesia-EU free trade agreement is likely to be signed soon, and the EU has promised zero tariffs for Indonesian palm oil,” Martono said. “We hope that the EU respects the spirit of that agreement and the future of bilateral relations between our countries.”

After dropping from 1.32M kilolitres in 2019 to 36,000 kilolitres in 2020, Indonesia’s exports of palm oil-based biodiesel totalled 27,000 kilolitres in 2024, Reuters wrote.

The EU has until 22 October to appeal the WTO ruling, the Jakarta Globe said on 28 August.

Tags: Indonesia, European Union, WTO, biodiesel, duty, palm oil, levy, EU Deforestation Regulation, exports