I

ndonesian biodiesel producers will soon lodge a protest against the European Union'€™s (EU) move to impose temporary anti-dumping duties on Indonesia'€™s biodiesel, which becomes effective today.

The domestic producers rejected the claim that they had dumped their biodiesel products in the European market, arguing that they could sell their products at lower prices because they had lower production costs.

According to them, with the use of palm oil as the raw material for diesel oil production, they can sell their products at more competitive prices compared to their rivals, which use other vegetable oils, such as soybean and rapeseed.

Indonesia is expecting its biodiesel installed capacity to reach 3.6 million tons this year, accounting for 9 percent of worldwide supply, according to the Indonesian Vegetable Oil Refiners Association (GIMNI).

Togar Sitanggang, a senior manager of Musim Mas, said his firm would exercise its rights to reject the EU'€™s ruling and provide supporting evidence to prove it did not dump biodiesel in the European market.

'€œSince the start of the investigation, we'€™ve rejected the claim that we'€™ve dumped our product. We'€™ll hope that we can lower the margin so it will be less 2 percent and be annulled,'€ he said.

To offset the impact on its domestic biodiesel makers, the EU trade authority is charging levies ranging from 2.8 percent to 9.6 percent on a number of companies from Indonesia that export biodiesel to the bloc.

The lowest duty of 2.8 percent goes to Musim Mas, which is a major local palm oil industry group, while the highest duty is charged to Wilmar Bioenergi, Wilmar Nabati Indonesia and other companies.

A 5.3 percent duty is placed on Pelita Agung Agrindustri, a subsidiary of another major palm oil producer Permata Hijau Group, whereas a 6.5 percent duty is imposed on other cooperating companies. However, one Indonesian exporter, Ciliandra Perkasa, is charged with 0 percent duty.

Hendra Gondawidjaja, the general manager of Permata Hijau Group, said the firm also planned to submit a similar objection to the EU as the additional duties would hamper its access to the market.

'€œWe will assess the calculation made by the EU first. Based on our estimate the margin is still less than 2 percent. We'€™ll opt to defend our interest,'€ he said.

The EU European Commission, announced on Tuesday in its official journal that it would enforce anti-dumping duties on a number of companies from Indonesia that exported biodiesel to the 27-member bloc.

The commission argued that imported biodiesel from Indonesia, along with Argentina, had caused material injury to European domestic manufacturers as the overseas fuel was priced lower than its production costs.

The imposition of the provisional levies lasting six months is based on initial results of an inquiry initiated by the commission last August, following a complaint by the European Biodiesel Board on behalf of manufacturers supplying above 60 percent of EU biodiesel output.

In its complaint, the board said that a rise in biodiesel imports from Indonesia and Argentina had caused bankruptcy, pushed European producers to sell their output below actual production cost and lowered production.

Imports from Indonesia jumped considerably from the low level of 157,915 tons in 2008 to 1.09 million tons in 2011, prompting its market share to rise dramatically from 1.4 percent to 9.7 percent within the designated period, according to EU statistics agency Eurostat and the biodiesel board.

The EU is set to issue a final ruling on whether to turn the provisional duties into permanent levies that may end in five years after a full investigation is finished in the next few months.