WTO DS618 Panel Faults EU Biodiesel Duties, Rejects Some Indonesian Claims

Geneva — The World Trade Organization (WTO) circulated its panel report on 22 August 2025 in dispute DS618 over European Union countervailing duties on biodiesel imports from Indonesia. The panel found flaws in the European Commission's assessment of crude palm oil supply and the threat of injury to the EU biodiesel industry, while Indonesia did not prevail on several other claims. It recommended that the EU bring its measures into conformity with the Agreement on Subsidies and Countervailing Measures (SCM Agreement).

Different outcomes for palm oil and plantation-fund claims

In European Union — Countervailing Duties on Imports of Biodiesel from Indonesia, the panel examined how the Commission linked Indonesian policies to domestic sales of crude palm oil (CPO). It found that the Commission acted inconsistently with the SCM Agreement when it concluded that a set of measures, including an export tax and levy and the government's alleged de facto price-setting role, induced private CPO suppliers to sell locally and amounted to entrusting or directing them to supply biodiesel producers for less than adequate remuneration.

The panel also found fault with the Commission's determination that those measures constituted income or price support for the biodiesel industry. In light of those findings, it declined to rule on several further Indonesian claims concerning benefit and specificity in relation to CPO supply. The ruling therefore did not resolve every element of the alleged subsidy.

There was a different result for payments from the Oil Palm Plantation Fund (OPPF). Indonesia did not establish that the Commission breached the SCM Agreement when treating the fund's disbursements as government financial contributions in the form of grants that conferred a benefit on biodiesel producers. Several objections regarding the calculation and specificity of those payments also failed. The distinction matters: success on the CPO findings did not overturn every premise of the countervailing-duty investigation.

Threat-of-injury assessment criticised

The panel found that the Commission had not conducted an objective examination based on positive evidence of the effect of Indonesian biodiesel imports on the prices of like EU products. Its finding of significant price depression was inconsistent with SCM rules. The panel also identified shortcomings in the assessment of factors bearing on the domestic industry's condition and in the overall conclusion that subsidised Indonesian imports were likely to aggravate the EU industry's fragile position.

It further found that the Commission had not properly considered a change in circumstances in determining the threat of injury. Indonesia, however, did not establish several other claims, including objections concerning the Commission's treatment of increased import volumes and price comparability. Following its findings on earlier steps of the injury analysis, the panel declined to rule on some additional causation claims.

The panel also found an inconsistency in the Commission's use of facts available for independent CPO suppliers because Indonesia had purportedly failed to ensure their responses were submitted. By contrast, Indonesia did not establish certain claims concerning information about PTPN, the rejection of Wilmar's price undertaking offer, and disclosure of information.

What it means for Indonesia

For Indonesia's palm-based biodiesel export chain, the findings on CPO and threatened injury challenge reasoning used in the EU countervailing-duty investigation. That is the report's direct trade implication; it does not show that the duties had already been withdrawn or that exports would immediately recover. The panel recommended conformity with the SCM Agreement. Its report as circulated on 22 August did not itself announce an automatic tariff change or quantify any effect on CPO or farmers' fresh fruit bunch prices.

DS618 concerns countervailing duties on biodiesel imports. It should not be conflated with a separate dispute over EU rules for palm-based biofuels, nor treated as a direct finding about Indonesian domestic biodiesel blending policy.