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EU sets tariffs on Indonesia biodiesel imports over subsidies

The European Union confirmed on Monday that it will impose tariffs on imports of biodiesel from Indonesia to counter what it sees as unfair subsidies, concluding a case that has lasted seven years.

The duties, normally in place for five years, have been set at between 8 and 18%, the same level as the provisional rates proposed in August.

Confirmation of the duties are another blow to Indonesian biodiesel producers after the EU said in March that palm oil should be phased out of renewable transport fuels due to palm plantations’ contribution to deforestation.

The European Commission, which coordinates trade policy for the EU, has said its investigation found Indonesian biodiesel producers benefit from grants, tax benefits and access to raw materials below market prices.

The EU biodiesel market is worth an estimated 9 billion euros ($10 billion) a year, with imports from Indonesia worth about 400 million euros, the Commission said. Indonesian producers, it said, sold at unfairly low prices, driving EU producers into losses.

The EU and China are Indonesia’s biggest markets for its biodiesel exports.

Indonesia has threatened to impose its own tariffs on EU dairy products.

The European Union also has imposed anti-subsidy duties on Argentine biodiesel producers, although it has tariff-free access for about 1.2 million tonnes as long as they sell no lower than a set minimum price.

The EU began looking into biodiesel from both major producers in 2012 and imposed anti-dumping duties on companies in 2013. However, the firms subsequently won challenges at the European Court of Justice and the World Trade Organization.

This prompted the EU to remove duties on most biodiesel imports from the two countries, but the Commission also started an investigation into possible unfair subsidies.
Source: Reuters (By Philip Blenkinsop)

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