The Palm Scribe

Indonesia Mulls Retaliation after EU Imposes 18 percent Duties on Biodiesel

Foto: AFP

Indonesia Minister of Trade, Enggartiasto Lukita said that the government has lodged an objection note to WTO after the European Commission imposed temporary duties of up to 18 percent on imports of biodiesel from Indonesia while thinking about increasing import tariffs on several of EU’s commodities, according to media reports.

“We have sent an objection note to the WTO,” said Enggar after attending the 2019 Annual Session at the parliament complex Jakarta, on Friday last week.

Enggartiasto Lukita on another occasion was also quoted as saying that after discussion with Vice President Jusuf Kalla, plans to impose an increase of import tariffs for dairy products from the European Union, which is still being discussed at the Ministry of Trade.

Currently, Indonesia is trying to shift imports of dairy products to the US, India, Australia and New Zealand.

The European Commission on Tuesday (13/8) imposed temporary duties of 8 percent to 18 percent on imports of subsidized biodiesel from Indonesia, saying the move aimed to restore a level playing field for European Union producers.

“The new import duties are imposed on a provisional basis and the investigation will continue with a possibility to impose definitive measures by mid-December 2019,” the EU executive said in a statement as quoted by Reuters.

The new tariff was effective immediately until the next four months and hit several major producers such as PT Caliandra Perkasa (8 percent), Wilmar Group (15.7 percent), Musim Mas Group (16.3 percent), Permata Group and other exporters (18 percent).

The European Commission, which coordinates trade policy for the EU, launched an anti-subsidy investigation in December following a complaint by the European Biodiesel Board. The Commission said its investigation showed that Indonesian biodiesel producers benefit from grants, tax benefits and access to raw materials below market prices.

The temporary duties are seen as another blow to relations between the European Union and Indonesia have been strained after the regional organization decided in March to go ahead with its Revised Renewable Energy Directive (RED II) that will gradually phase out palm oil-based biodiesel.

Indonesia is the world’s top palm oil producer and exports about 1.5 million tons of palm oil-based biodiesel in 2018. Jakarta and second-largest producer Malaysia, have accused the EU’s RED II of being discriminatory against palm oil and have said they would take the issue to the World Trade Organization.

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