Indonesia wants European Union to end duties on biodiesel import

The Indonesian government has called on the European Union (EU) to lift countervailing duties (CD) on its biodiesel exports. The request follows a favourable World Trade Organization (WTO) ruling in a long-running trade dispute.

Trade Minister of Indonesia Budi Santoso said the duties—ranging from 8% to 18% since 2019—violate WTO rules. The minister urged the EU to immediately revoke these countervailing import duties that are not WTO-compliant.

The EU had argued that Indonesian biodiesel producers benefited from subsidies such as tax breaks, grants, and low-cost raw materials. However, Indonesia disputed this claim in a 2023 complaint, insisting that its palm oil export duty and levy did not qualify as subsidies under WTO definitions. The WTO panel sided with the Indonesian government, ruling that Brussels failed to demonstrate how Indonesian biodiesel imports caused “material injury” to European producers.

The impact of the countervailing duties was that it sharply reduced Indonesia’s biodiesel exports to the EU—from 1.32 million kilolitres in 2019 to just 27,000 kl in 2024. As the world’s largest palm oil exporter, Indonesia sees the measures as part of a broader pattern of EU trade restrictions, including its new anti-deforestation law, which Jakarta fears will further limit palm oil shipments.

Despite the legal victory, industry players remain wary. Catra de Thouars of the Indonesia Biofuel Producers Association said that they must stay alert for any decision by the European Union after the WTO ruling.

The Indonesian government is nonetheless hopeful that the recently agreed EU–Indonesia free trade pact, concluded in principle in July, will pave the way for better market access for palm oil and related products.

Indonesia has about 20 million kilolitres of biodiesel production owing to strong growth in palm oil cultivation in the country. Besides boosting exports, the country is reducing its reliance of oil imports through its recently announced B40 mandate.