The European Union said on Thursday (17/8) that it was conducting an investigation to find out whether Indonesian biodiesel was trying to avoid EU duties by shipping it via China and the UK.
The European Union is Indonesia’s third largest destination for palm oil products and an important market for its biodiesel, which is made from palm oil. Indonesia is the world’s largest palm oil producer.
The European Union launched the investigation following a request from the European Biodiesel Council, an association of European producers.
“The request has sufficient evidence that the existing countermeasures on the import of the product in question were counteracted by the import of the product under investigation,” the European Commission said in its official European Union journal.
“Changes in trade patterns involving exports from Indonesia and the People’s Republic of China and the United Kingdom to the (European) Union occurred after the implementation of the countermeasures in force,” he added.
The Indonesian government will monitor the investigation and take strategic steps if there are things that are not in accordance with the rules of the World Trade Organization (WTO), Djatmiko Bris Witjaksono, Director General of International Trade Negotiations at the Indonesian Ministry of Trade, told Reuters, Friday (18/8 ).
Last week, the government requested a consultation session regarding the WTO dispute with the European Union over the imposition of import duties on biodiesel imports from Indonesia.
Asked about the situation, a spokesperson for the European Commission told reporters that the European Union believed that some of the duties imposed on Indonesia were fully in accordance with WTO rules and that the European Union was ready to discuss the matter with Indonesia.
President Jokowi inaugurated the PT Jhonlin Group biodiesel factory in Tanah Bumbu, South Kalimantan, October 21, 2021. (Photo: Agus Suparto/Twitter@Jokowi)
Trade relations between the European Union and Indonesia have soured recently after the bloc of European countries restricted imports of commodities linked to deforestation. The regulation is expected to reduce EU palm oil imports from the world’s main suppliers, namely Indonesia and Malaysia.
Welcoming the European Commission’s investigation, the European Biodiesel Council said it estimated that duty-evading imports could have cost the EU last year around 221 million euros or around IDR 3.68 trillion at current exchange rates.
The association is also working with European Union authorities to address allegations of fraudulent imports of biodiesel from China, it added in a statement.
Germany earlier this year asked the European Commission to investigate shipments from China amid industry concerns that imported biodiesel claimed to be based on recycled feedstock may contain cheaper oil. (ah/ft)
