The World Trade Organization (WTO) has ruled in favor of Indonesia in its trade dispute against the European Union (EU) over countervailing duties imposed on palm oil-based biodiesel products. 

The WTO panel decision, circulated on August 22, 2025, declared that the EU’s measures were inconsistent with WTO provisions and must be adjusted accordingly.

“This decision confirms that the EU’s allegations were unfounded and that their measures were discriminatory against Indonesian biodiesel exports,” Djatmiko Bris Witjaksono, Director General for International Trade Negotiations at the Ministry of Trade, told a media conference in Jakarta on Thursday, August 28, 2025.

The case, registered as DS618: European Union – Countervailing Duties on Biodiesel from Indonesia, dates back to 2019 when the EU imposed countervailing duties ranging from 8 to 18 percent on Indonesian biodiesel. The EU alleged that Indonesia’s biodiesel industry benefited from illegal subsidies, causing material injury to European producers.

According to Djatmiko, the dispute underwent a lengthy process − starting with consultations and progressing to panel proceedings in Geneva,

“From the outset, we maintained that Indonesia’s policies regarding the Palm Oil Plantation Fund did not violate WTO rules. The panel has now confirmed this,” he said.

Key findings

The WTO panel outlined three critical findings in its ruling:

1. Indonesia’s export levies and management of the Palm Oil Plantation Fund cannot be classified as illegal subsidies.

2. There was no evidence that the Indonesian government directed producers to sell biodiesel feedstock below market value.

3. The EU failed to prove that imports of Indonesian biodiesel caused material injury to its domestic biodiesel industry.

“The panel’s decision is objective and evidence-based. We will ensure that the EU complies with the recommendations and adjusts its measures accordingly,” Djatmiko said.

Next steps

Under WTO procedures, both parties have up to 60 days to either accept the ruling or file an appeal. If no appeal is made, the EU must revoke its countervailing duties within a reasonable period, which WTO guidelines set at a maximum of 15 months.

“We hope the EU will accept the ruling and comply promptly. However, if they choose to appeal, Indonesia is fully prepared to defend its case in the next stage,” Djatmiko said.

Strategic economic asset

Palm oil remains one of Indonesia’s top export commodities, generating more than US$30 billion in export earnings in 2024. The sector provides direct and indirect employment for over 16 million people and supports downstream industries such as biodiesel, oleochemicals, and food production.

“This victory is crucial not only for our biodiesel industry but also for the sustainability of our national economy and the livelihoods of millions of smallholder farmers,” Djatmiko cited.

Significance for Indonesia

The government views this ruling as a reinforcement of Indonesia’s commitment to defending its trade interests through multilateral mechanisms. WTO remains an essential platform for resolving disputes and ensuring fairness in global trade.

“The WTO plays a vital role in maintaining a fair multilateral trading system. Indonesia will continue to utilize this mechanism to protect its national interests,” Djatmiko concluded.