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Indonesia in fight with EU over biofuel, again
The European Commission (EC) has imposed temporary duties ranging from 8 to 18 percent on imports of biodiesel produced by Indonesian companies.
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A 20-percent blended biodiesel (B20) gas pump. (Courtesy of/The Indonesian Palm Oil Producers Association (Gapki) )
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ndonesia is facing a fresh round of accusations over its management of its palm oil industry from one of its biggest importers, the European Union (EU), adding to the prolonged feud between the two trading partners over the commodity.
On July 23, the European Commission (EC) proposed imposing temporary duties ranging from 8 to 18 percent on imports of biodiesel produced by Indonesian companies. The companies include PT Ciliandra Perkasa, which faces an 8 percent import duty, PT Musim Mas, which faces a 16.3 percent duty, and PT Wilmar Bioenergi Indonesia, which faces an 18 percent duty. One type of biodiesel is made from palm oil.
The duties have been proposed through an EC provisional measure and follow allegations that palm oil companies in Indonesia receive various incentives and special subsidies from the government. These alleged incentives include subsidies from the Indonesian Oil Palm Estate Fund (BPDP-KS) and export financing from Indonesia Eximbank.
This latest blow to Indonesia’s palm oil industry comes just months after the EC decided that all palm oil products, including biofuel, should be phased out by 2030 because of concerns over deforestation.
In 2018, the EU was Indonesia's second largest palm oil export destinations behind India, importing 4.78 million tons of the commodity, according to Indonesian Palm Oil Producers Association (Gapki) data.
Pradnyawati, the Trade Ministry’s director for trade security, said the temporary duties were indicative of a clear protectionist tendency from the EU amid its continued attempts to limit imports of Indonesian palm oil.
“Yes, this is clearly structured, systematic and massive protectionism [by the EU]. They don't want their products to lose to ours, so we are being ambushed from all directions using all kinds of instruments,” Pradnyawati said at a press conference at the Trade Ministry on Friday.
