Friday, February 23, 2024

WTO forms panel to review EU import duties on Indonesian biodiesel

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The World Trade Organization’s (WTO) dispute settlement body has agreed to form a panel to review the import duties imposed by the European Union (EU) on biodiesel imports from Indonesia. 

This panel formation follows Indonesia’s claim that it has been adversely affected by the EU’s policy, which has imposed duties for five years from December 10, 2019, to December 10, 2024.

Indonesia had requested WTO dispute consultations with the EU regarding the imposition of import duties on biodiesel imports from the Southeast Asian country in August 2023. The consultation request failed to reach an agreement. 

Indonesia then re-requested the WTO to establish a dispute settlement body last month, even though this request had been rejected previously.

“Appealing this case to the WTO is very strategic to maintain market access for Indonesian biodiesel products in the EU market, which is currently subject to countervailing duties ranging from 8% to 18%,” said Budi Santoso, Director General of Foreign Trade, on November 28, 2023.

Paulus Tjakrawan, Chairman of the Indonesian Biofuel Producers Association, stated that the import duties are burdensome for Indonesian biodiesel exporters. They hope the WTO panel can start the legal process promptly.

The WTO stated on Monday night that the United States, the United Kingdom, Norway, the Russian Federation, Thailand, Singapore, Japan, Canada, China, Argentina, and Turkey have submitted their rights to participate in the panel as third parties.

On the other hand, in August 2023, the European Union initiated an investigation into biodiesel from Indonesia, suspecting that it evaded customs duties or import charges in the region by passing through China and the UK. This investigation was conducted following an initial request from the European Biodiesel Board, an association of biodiesel producers in Europe.

“This request contains sufficient evidence that the existing balancing measures against the imports of the product in question have been circumvented by the imports of the product under investigation,” stated the European Commission.

The European Union is the third-largest destination for Indonesian palm oil products. Meanwhile, Indonesia is the world’s largest producer of palm oil.

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