Indonesia won six of the seven legal challenges it set against the European Union (EU) regarding the latter’s anti-dumping (AD) duties on the Southeast Asian country’s biodiesel exports.
On January 25, 2018, the World Trade Organization (WTO) ruled largely in favor of Indonesia, paving the way for the country to revitalize its biodiesel exports to the EU.
“The decision will subsequently reopen Indonesia’s market and revive our biodiesel exports to the EU, which have declined sharply due to the anti-dumping duties imposed by the EU,” Trade Minister Enggartiasto Lukita said in a statement on February 2.
Enggartiasto said that after the WTO ruling, Indonesian biodiesel exports to the EU should now be able to reach US$386 million in 2019 and surge further to $1.7 billion by 2022.
The ruling is the latest in a series of legal challenges against import duties imposed by the EU on biodiesel imports from Indonesia and Argentina in 2013. Similar to the WTO ruling for Argentina, the panel ruled in favor of several challenges to the AD duties for Indonesia. For instance, the panel determined that the EU should have used the prices recorded by the producers and failed to calculate correctly a normal profit margin.
The EU imposed final anti-dumping duties in the range of 8.8% to 20.5% on biodiesel shipments from Indonesia in 2013. According to the EU, biodiesel producers in Indonesia had such low production costs that they could “dump” their products at unfairly low prices in the EU.
As a result of the duties, shipments from Indonesia contracted from US$649 million in 2013 to US$150 million in 2016.
In 2014, Indonesia challenged the EU’s anti-dumping duties on seven points. A panel of the WTO has now ruled in favor of Indonesia for six points; the seventh was rejected.
Overall, it means the WTO urges the EU to bring its measures into conformity with WTO agreements.
For Indonesian biofuel producers and exporters as well as crude palm oil producers, the WTO ruling gives rise to optimism as the EU is a big market for biofuels.
Based on data from the Association of Indonesian Biofuel Producers, Indonesia produced a total of 3.1 million kiloliters of biodiesel in the first 11 months of 2017. Meanwhile, domestic consumption of biodiesel in Indonesia only stood at 2.3 million kiloliters over the same period.
“We are currently waiting for the EU to revoke their biodiesel import duties that have been in place since 2013,” said the Trade Ministry.
Photo: GeoffreyWhiteway
