WTO Rules in Favor of Indonesia in Biodiesel Dispute with EU, Boosting CPO Outlook
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JAKARTA, Investortrust.id — The World Trade Organization (WTO) panel has ruled in favor of Indonesia on Saturday, Aug. 23, 2025, in a dispute with the European Union over countervailing duties imposed on biodiesel imports from Indonesia. The decision strengthens Jakarta’s position that the EU’s tariffs were inconsistent with global trade rules and is expected to bolster the outlook for palm oil and biodiesel producers.
In its decision, the WTO recommended that the European Union bring its measures into conformity with its obligations under the Agreement on Subsidies and Countervailing Measures, or SCM Agreement. The EU is a key export destination for Indonesia’s crude palm oil (CPO) and biodiesel, where the country is the world’s largest palm oil producer. The ruling underscores Indonesia’s push for fairer market access for its leading export commodities.
“This is good news as the WTO panel supported Indonesia in the decision regarding the imposition of dumping duties on biodiesel in Europe. As a consequence, the EU should revoke those measures. Now, Indonesia is waiting to see how the EU will respond to the WTO ruling,” said Coordinating Minister for Economic Affairs Airlangga Hartarto in a press statement in Jakarta.
Airlangga emphasized that the government would prepare a measured implementation plan following the ruling. He stressed that the decision was a positive catalyst for Indonesia’s flagship export commodities, particularly biodiesel and palm oil derivatives.
Looking ahead, Airlangga said the government would continue to safeguard the follow-up process with a constructive approach, upholding international cooperation while prioritizing Indonesia’s national interests in global trade.
The ruling also comes as Indonesia and the European Union near the final stage of negotiations for the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), which has been in discussion for nine years. Airlangga described the prospective deal as a crucial milestone at a time when global economic conditions remain uncertain.
Economic ties between Indonesia and the EU have strengthened in recent years. Bilateral trade reached $30.1 billion in 2024, making the EU Indonesia’s fifth-largest trading partner. Indonesia ranked as the EU’s 33rd trading partner, with the balance of trade showing a surplus for Indonesia. That surplus rose from $2.5 billion in 2023 to $4.5 billion in 2024.
Domestically, legal preparations for the IEU-CEPA are underway, expected to take at least six months. Formal signing is targeted for the second or third quarter of 2026, followed by ratification, though it remains undecided whether this will proceed through legislation or a presidential decree.
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