Indonesia’s trade ministry has called on the European Union to remove countervailing duties on biodiesel imports following a favorable ruling by the World Trade Organization (WTO). The WTO supported several of Indonesia’s key claims in its complaint, which argued that the EU’s duties violated international trade rules. Trade Minister Budi Santoso emphasized that the EU should immediately revoke the duties, stressing that the decision proves Indonesia’s commitment to fair trade practices without resorting to market-distorting policies.
The dispute began in 2023 when Indonesia challenged the EU’s imposition of duties ranging from 8 to 18 percent on its biodiesel, which had been in place since 2019. The EU argued that Indonesian biodiesel producers benefitted from subsidies such as grants, tax incentives, and cheaper raw materials. However, the WTO panel determined that Indonesia’s export duty and levy on palm oil could not be classified as subsidies and that the EU failed to provide objective evidence showing material harm to European producers.
As a result of the duties, Indonesia’s biodiesel exports to the EU have dropped sharply, falling from 1.32 million kilolitres in 2019 to just 36,000 KL in 2020, with only 27,000 KL exported in 2024. Despite the WTO ruling, the case may not reach a final conclusion since the WTO’s Appellate Body has been non-functional since 2019, following repeated blockages of judge appointments by the administration of former U.S. President Donald Trump.
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