The European Union (EU) has enforced counteractive duties ranging from 8% to 18% on Indonesian biodiesel since 2019, as confirmed by Djatmiko Bris Witjaksono, the Director General of International Trade Cooperations at Indonesia's trade ministry.

In response to this action, Indonesia has initiated dispute consultations with the European Union through the World Trade Organization (WTO), a disclosure made by the international trade organization on Tuesday.

Indonesia views its biodiesel exports as strategically significant within the EU, with the Southeast Asian country designating the bloc as its third most vital market for palm oil products. Moreover, the EU serves as a pivotal market for Indonesian biodiesel, which is derived from palm oil, a key export commodity for Indonesia as the world's leading palm oil producer.

The formal request for dispute consultations was officially distributed to WTO members on August 15. In this request, Indonesia underscores its assertion that the EU's imposition of countervailing duties and the subsequent investigation leading to their implementation stand in violation of WTO provisions. By taking this step, Indonesia seeks to address what it perceives as inconsistencies within the EU's approach.

The EU's imposition of countervailing duties on Indonesian biodiesel has unfolded in tiers, ranging from 8% to 18%, over the course of several years, as detailed by Djatmiko Bris Witjaksono. He also highlighted the adverse consequences of this measure, particularly given the global economic recovery in the aftermath of the COVID-19 pandemic. Djatmiko, speaking on behalf of Indonesia's trade ministry, emphasized that these duties have significantly harmed the Indonesian industry, impeding its growth at a crucial juncture.

Countervailing duties, as outlined by WTO regulations, are intended to counteract the detrimental impacts of subsidies. The impact of these measures was keenly felt by Indonesia's biodiesel exports, which encountered a notable decrease of 28% in 2019 when contrasted with the previous year's figures. This translated to a total of 1.2 million tonnes, as reported by the country's official statistics bureau.

The EU's role in Indonesia's biodiesel trade is substantial, with the bloc accounting for approximately 52% of the nation's biodiesel shipments in 2018 and 45% in 2019. In 2022, Indonesia dispatched a total of 435,827 tonnes of biodiesel, with 22.47% of this volume directed towards the EU market.

By seeking dispute consultations through the WTO, Indonesia is aiming to address its concerns over the EU's countervailing duties and associated investigative procedures. This action signals Indonesia's resolve to uphold trade agreements and norms while advocating for the interests of its biodiesel industry within the context of global trade dynamics.