GAPKI: WTO ruling against EU biodiesel tariffs ‘shows pattern of discrimination’ against Indonesian palm

Following the World Trade Organization’s ruling against the European Union’s tariffs on Indonesian palm oil, Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono said GAPKI welcomed the WTO Dispute Panel’s clear ruling, which found that the EU’s countervailing duties on Indonesian biodiesel were “simply wrong,” he said.    

“Unfortunately, the latest WTO ruling shows a clear pattern by the European Union in blocking access to the European market for Indonesian palm oil and palm products,” Martono said. “It has consistently discriminated illegally against Indonesian palm oil for more than a decade.”  

 According to GAPKI, the WTO ruling showed that the EU: 

• Mischaracterized Indonesia’s support scheme for farmers and failed to prove any trade-distorting benefit to Indonesian biodiesel producers. 

• Could not demonstrate any injury to European industry—only a threat of injury. 

• Violated basic WTO transparency and due-process obligations. 

“GAPKI calls on the European Commission to quickly remedy the situation and reopen the EU market to Indonesian palm-based biofuels,” Martono said. “GAPKI also calls on the EU to ensure that its future measures impacting palm oil—particularly the forthcoming EU deforestation regulation (EUDR)—do not discriminate against Indonesian palm oil. We also call on the commission to ensure Indonesia’s 2.7 million palm-oil smallholders are accommodated under the new regulations, whether through certification or clear exemption.” 

Martono said the Indonesia-EU free trade agreement is likely to be signed soon.  

“The EU has promised zero tariffs for Indonesian palm oil and special treatment for Indonesian products,” he said. “We hope that the EU respects the spirit of that agreement and the future of bilateral relations between our countries.”    

The WTO Dispute Panel made a clear ruling in DS618, which found that the European Union’s countervailing duties on Indonesian palm biodiesel were wrong on multiple grounds, GAPKI explained.   

First, the EU completely misunderstood how Indonesia’s biodiesel support system works.  

The EU claimed that Indonesia's Oil Palm Plantation Fund operated as a government subsidy that gave unfair advantages to the country’s biodiesel producers, but the WTO panel found this was incorrect.  

The OPPF is not a direct government payment, according to GAPKI, but rather it is a system where the palm-oil industry supports itself through export levies that are redistributed within the sector.  

The EU couldn’t prove that Indonesian biodiesel producers actually received any unfair advantage compared to normal market conditions, the organization stated.   

Second, the EU failed to show that Indonesian biodiesel was harming European producers.  

The EU claimed there was a “threat of injury” to their industry, GAPKI pointed out, but the panel found this was based on assumptions rather than empirical evidence.  

The EU made predictions about future Indonesian exports without clear and emperical data and was unable to explain how Indonesian biodiesel would impact EU prices.  

“Without proving real harm, the EU had no valid reason to impose these duties,” GAPKI said.

Third, the EU violated basic fairness and transparency rules during their investigation, the Indonesian Palm Oil Association stated.  

“They withheld important information from Indonesian exporters, making it impossible for our companies to properly defend themselves,” GAPKI stated. “The documents they did share were often too vague to be useful. They also refused to let Indonesian parties suggest alternative ways to assess the situation, keeping crucial data hidden until it was too late in the process.”  

In short, the WTO found that the EU’s duties against Indonesian biodiesel had no proper legal basis and must be removed to comply with international trade rules.   

This ruling, according to GAPKI, is part of “a clear pattern of discrimination by the EU against Indonesia’s palm oil industry.”   

The association stated, “Repeated WTO ruling against the EU show that Brussels keeps trying different ways to block Indonesian palm oil from their market—whether through countervailing duties, antidumping measures or environmental regulations. Each time, the WTO finds these measures are unjustified and illegal.”  

GAPKI added that, “While this ruling should reopen the EU market for Indonesian palm oil-based biofuel, we remain concerned about whether the EU will actually follow through. The EU has been very slow to comply with previous WTO rulings, especially regarding RED II. We call on the EU to respect international trade law and immediately implement all WTO decisions. We thank the Indonesian government, especially the Coordinating Ministry for Economic Affairs, for consistently defending our palm-oil industry’s rights in international forums. Indonesia will continue to fight any unfair trade measures that target our sustainable palm-oil sector. Indonesia is committed to sustainable palm-oil production and deserves fair treatment in global markets under WTO rules. The EU must stop protecting its own industries at the expense of developing countries like Indonesia.”