The EU is investigating Indonesian biodiesel to establish whether its circumventing the European Union’s duties by going through China and Britain The bloc highlighted the European Biodiesel Board’s request which contains sufficient evidence that the product is avoiding import duties. Through this probe, the EU reflects its commitment to ensuring fair and transparent trade practices, while addressing environmental and economic concerns.
In 2022, the EBB said the European Commission had failed to consider all relevant data to establish undercutting of duty payments by Indonesia. The European Commission said there’s sufficient evidence that the existing countervailing measures on imports of the biodiesel are being circumvented by imports of the product under investigation.
The EU is the third-largest recipient of palm oil products from Indonesia, and serves as a crucial market for the Asian country’s biodiesel, primarily sourced from palm oil. Indonesia is the world’s largest producer of palm oil.
Earlier this week, Jakarta went to the World Trade Organization because of EU’s imposition of duties on biodiesel imports from Indonesia. The European Commission said it was aligned with WTO regulations and observed a change in the pattern of trade involving exports from Indonesia and China, and the United Kingdom to the EU has taken place following the imposition of the existing countervailing measures. It also expressed willingness to enter into dialogues with Indonesia to resolve the issue.
However, trade relations between Indonesia and EU are tense because of the bloc’s efforts to curtail the influx of commodities linked to deforestation. This will lead to a drop in the EU’s imports of palm oil.