EU Sets 8%–18% Countervailing Duties on Indonesian Biodiesel

Brussels — The European Union announced definitive countervailing duties of 8%–18% on biodiesel imports originating in Indonesia on 9 December 2019, when a European Commission regulation appeared in the EU's Official Journal. The rate depends on the producer. The measure follows provisional countervailing duties imposed in August, while the head of Indonesia's biofuel producers' association told Reuters his group would ask the government to challenge the decision at the World Trade Organization (WTO).

Commission Implementing Regulation (EU) 2019/2092 is dated 28 November 2019 and was published on 9 December. Under Article 3, it enters into force on the day after publication. The date of the regulation, its publication date and the date it takes effect are therefore not interchangeable.

Company-specific rates, not an across-the-board levy

Article 1 assigns an 8% duty to PT Ciliandra Perkasa, 16.3% to the Musim Mas Group, 18% to the Permata Group and 15.7% to the Wilmar Group. Other companies face 18%. The percentages apply to the net free-at-EU-frontier price before duty for the products covered by the regulation. They should not be read as a single rate for all Indonesian biodiesel exporters.

The Commission opened its anti-subsidy investigation in December 2018 following a complaint by the European Biodiesel Board and imposed provisional countervailing duties on 14 August 2019. The definitive regulation also releases the amounts secured under the provisional measure rather than definitively collecting them. This distinction matters when assessing the costs attached to the provisional period.

The December measure is a countervailing duty arising from a subsidy investigation, not an anti-dumping duty. Anti-dumping is a separate trade-remedy track. Reuters noted that the EU had imposed anti-dumping duties on Indonesian and Argentine biodiesel in 2013, but that earlier history should not be confused with the legal basis of the 2019 decision.

Commission findings and the Indonesian response

In its regulation, the Commission concluded that Indonesian biodiesel producers benefited from payments under the oil palm plantation fund and access to crude palm oil at prices below the benchmark it used. Reuters summarised the Commission's findings as grants, tax benefits and access to raw materials below market prices. These are findings and allegations in the Commission's trade investigation, not independent editorial conclusions that the contested points have been settled beyond dispute.

The regulation records objections from the Indonesian government and exporters, including arguments that the plantation fund should not be classified as public funds and that payments to producers were part of a purchase arrangement rather than grants. The Commission rejected those positions. It concluded that the imports threatened material injury to the EU industry; the Indonesian government disputed the asserted causal link.

Master Parulian Tumanggor, chairman of the Indonesian Biofuel Producers Association (APROBI), told Reuters that the group would ask the government to file a WTO challenge. That was a stated intention at the time, not confirmation that a case had already been filed or decided.

What it means for Indonesia

For Indonesian exporters, the immediate consequence is a company-dependent cost of entry into the EU market for products covered by Article 1. Reuters cited a Commission estimate that Indonesian biodiesel imports were worth about €400 million to the EU market. This establishes the market's significance at the time, but neither source quantifies any subsequent loss of export volume or change in farm-gate palm prices. The duty rate alone cannot establish those effects.

The dispute also puts Indonesia's palm-based biodiesel financing and feedstock arrangements under international trade scrutiny. APROBI's proposed WTO route was a possible response, not a suspension of the regulation. The operative text and each producer's applicable rate remained the relevant starting points for assessing shipments to the EU.