Awaiting Final US Ruling over Indonesia's Alleged Biodiesel Dumping
Stakeholders in Indonesia's biodiesel industry are waiting for the final ruling of the US Commerce Department regarding the dumping of biodiesel products on the American market. The USA accuses Indonesia and Argentina of subsidizing biodiesel exports, hence leading to uncompetitive US vegetable oils (particularly soybean oil).
On 7 November 2017 the US Commerce Department will issue its final ruling. In the worst case scenario (for Indonesian biodiesel exporters) the US will impose 45 percent import duties on biodiesel products that are shipped from Indonesia into the USA.
However, there are signs that diplomatic discussions between both sides (US Commerce Department and Indonesia's Trade Ministry) have eased the problems. Whereas the US initially ventilated eight reasons for its biodiesel dumping allegations, the number has been reduced to two reasons.
Oke Nurwan, Foreign Trade Director at Indonesia’s Trade Ministry, said his side continues to engage in diplomatic efforts to solve the issue.
The two issues that remain unresolved are US' allegations that the Indonesian government's B10, B15, and B20 biodiesel programs basically imply that biodiesel shipments from Indonesia are subsidized (hence implying unfair trading). Under Indonesia's subsidized biodiesel program diesel is blended with a mandatory amount of fatty acid methyl ester, derived from palm oil). However, Indonesia's Trade Ministry emphasized that the biodiesel subsidy program is only allowed for biodiesel that is sold on the domestic market. Biodiesel that is exported, on the other hand, does not fall under the scope of the program.
Secondly, the US claims that Indonesia's easy export tax policy for biodiesel exports also forms the basis for unfair competition on the global market. However, Indonesia says the low export tax for biodiesel is actually a tool to encourage the development of downstream processing facilities in the domestic palm oil industry.