Proposed EC anti-subsidy duties on Indonesian biodiesel “too low”

Preliminary anti-subsidy duties imposed on Indonesian biodiesel will not reduce EU imports of palm oil-based biodiesel, according to Germany’s Union for the Promotion of Oil and Protein Plants (UFOP).

The 8%-18% duties, due to come into force by 6 September, would not raise the price of palm oil methyl ester (PME) to that of rapeseed methyl ester (RME), UFOP said on 6 August.

“In other words, European rapeseed production – as a feedstock source for biodiesel – will not benefit from the step taken.”

The European Commission (EC) proposed the duties on 23 July after it launched an anti-subsidy investigation against Indonesia in December following a complaint by the European Biodiesel Board (EBB).

The proposed import duty rates are 8% for Ciliandra Perkasa, 15.7% for Wilmar Group, 16.3% for Musim Mas Group and 18% for Permata Group, according to Reuters.

The EC said there was evidence that producers in Indonesia benefited from subsidies in the form of export financing, tax breaks and provision of palm oil at artificially low prices.

The measures were provisional, pending the conclusion of the EU investigation, Reuters said. Definitive duties, usually applied for five years at the end of an investigation, would need to be set by 4 January 2020.

The EU imposed anti-dumping duties on Argentine and Indonesian biodiesel in 2013 but had to remove most of them in 2017 after losing challenges at the World Trade Organization and the European Court of Justice.

Following an EBB request for further investigations, the EC proposed anti-subsidy duties of 25-33.4% on Argentine biodiesel but then reached an agreement with eight Argentine biodiesel producers in January to allow up to 1.2M tonnes/year of tariff-free Argentine biodiesel imports at a set minimum price. The eight companies that signed up to the agreement were Aceitera General Deheza, Bunge Argentina, LDC Argentina, Molinos Agro, Oleaginosa Moreno Hermanos, Vicentin, Cargill and COFCO International Argentina.

UFOP has urged the EC to impose higher tariffs on Indonesia.