EUROPEAN UNION – COUNTERVAILING DUTIES ON IMPORTS OF BIODIESEL FROM INDONESIA REQUEST FOR THE ESTABLISHMENT OF A PANEL BY INDONESIA
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 13 October 2023
Document codes: WT/DS618/2
Complainant: Indonesia
Respondent: EU
Third parties: Argentina, Australia, Brazil, Canada, China, Japan, Norway, Russia, Singapore, Thailand, Türkiye, United Kingdom, U.S.
Dispute stage: Panel
Agreements cited: Art. 1, 4  Dispute Settlement Understanding (DSU)Art. 30  Subsidies and Countervailing Measures (SCM)Art. XIII:1  GATT 1994

EUROPEAN UNION – COUNTERVAILING DUTIES ON IMPORTS OF BIODIESEL FROM
INDONESIA
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY INDONESIA
The following communication, dated 13 October 2023, from the delegation of Indonesia to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 11 August 2023, Indonesia requested consultations with the European Union ("EU") pursuant to
Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
("DSU"), Article 30 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"),
and Article XXIII of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), concerning
the imposition of countervailing duties on imports of biodiesel from Indonesia.
The consultations took place in Geneva on 4 October 2023 and failed to resolve the dispute. Hence,
Indonesia is requesting the establishment of a Panel pursuant to Article 4.7 and 6 of the DSU.
The measures at issue are the definitive countervailing duties on imports of biodiesel from Indonesia
as well as the underlying investigation that led to the imposition of these measures (hereafter
"countervailing measures"), which include, a mongst others, the actions taken or omitted by the
European Commission ("Commission") during the course of – or in relation to – the investigations.
The countervailing measures are evidenced by the Commission Implementing Regulation (EU)
2019/2092 of 28 November 2019 imposing a definitive countervailing duty on imports of biodiesel
originating in Indonesia 1 ("the Biodiesel Definitive CVD Regulation") as well as the Commission
Implementing Regulation (EU) 2019/1344 of 12 August 2019 imposing a provisional countervailing
duty on imports of biodiesel originating in Indonesia ("the Biodiesel Provisional CVD Regu lation").2
The legality of countervailing measures should also be reviewed in light of the findings and
determination reached by the EU in the regulations imposing anti -subsidy measures on imports of
biodiesel from Argentina.3
Indonesia is concerned that the Biodiesel Definitive CVD Regulation, the Biodiesel Provisional
CVD Regulation and the investigation leading to the imposition of the countervailing measures are
inconsistent with the following provisions of the SCM Agreement and the GATT 1994:

1 Commission Implementing Regulation (EU) 2019/2092 of 28 November 2019 imposing a definitive
countervailing duty on imports of biodiesel originating in Indonesia, Official Journal of the European Union,
L 317, p. 42-95, dated 9 December 2019.
2 Commission Implementing Regulation (EU) 2019/1344 of 12 August 2019 imposing a provisional
countervailing duty on imports of biodiesel originating in Indonesia, Official Journal of the European Union,
L 212, p. 1-52, dated 13 August 2019.
3 Commission Implementing Decision (EU) 2019/245 of 11 February 2019 accepting undertaking offers
following the imposition of definitive countervailing duties on imports of biodiesel originating in Argentina.
Official Journal of the European Union, L 40, p. 71-77, dated 12 February 2019; Commission Implementing
Regulation (EU) 2019/244 of 11 February 2019 imposing a definitive countervailing duty on imports of
biodiesel originating in Argentina, Official Journal of the European Union, L 40, p. 1-70, dated
12 February 2019.

1. DETERMINATIONS CONCERNING THE OIL PALM PLANTATION FUND ("OPPF")
(a) Article 1.1(a)(1)(i) of the SCM Agreement because the EU determined that OPPF
payments constituted a financial contribution by a public body;
(b) Article 1.1(a)(1)(i) of the SCM Agr eement because the EU determined that OPPF
payments constituted grants and not purchases of biodiesel by the Government of
Indonesia;
(c) Article 1.1(b) of the SCM Agreement because the EU determined that OPPF
payments conferred a benefit on biodiesel prod ucers and in particular because the
EU selected a wrong counterfactual to analyse the situation of the recipient on the
marketplace, absent the financial contribution; wrongly concluded that absent the
OPPF payments, the biodiesel reference price would be lower; failed to consider the
export levies paid by biodiesel producers; and failed to consider that the benefit, if
any, was passed through to biodiesel blenders;
(d) Articles 19.1, 19.4 and 21.1 of the SCM Agreement, Article VI:3 and Article XVI:1 of
the GATT 1994 because the EU failed to properly allocate the alleged subsidy
amounts resulting from OPPF payments and thus failed to accurately determine the
per unit subsidy amount and to impose countervailing duties at the level not
exceeding that amount;
(e) Articles 1.1(a)(1)(ii), 14, 19.3, 19.4 and 32.1 of the SCM Agreement and Article VI:3
of the GATT 1994 because the EU failed to adjust the amount of the alleged subsidy
to account for discounts granted as well as export levies, transport and credit costs
and thus failed to adequately explain its benefit calculation method, to ascertain as
accurately as possible the amount of subsidization bestowed on the investigated
products and to levy countervailing duties in the appropriate amounts;
(f) Articles 1.2, 2.1 and 2.4 of the SCM Agreement because the EU determined that
through a set of measures the Government of Indonesia provided support to the
biodiesel industry including through direct transfer of funds via the 'Biodiesel Subsidy
Fund' conferring a benefit to the recipients which is de jure and de facto specific;
(g) Articles 22.3, 22.4 and 22.5 of the SCM Agreement because on multiple occasions
throughout its analysis of OPPF payments the EU failed to adequately state the
reasons on which its conclusion s are based and failed to provide sufficient
explanations why certain claims made by interested parties were rejected.
2. DETERMINATIONS CONCERNING THE ALLEGED GOVERNMENT SUPPORT FOR THE
PROVISION OF CRUDE PALM OIL ("CPO")
(a) Article 1.1(a)(1)(iv) of the SCM Agreement because the EU determined that the
provision of CPO located on Indonesian soil to the Indonesian biodiesel industry is a
function which is normally vested in the government;
(b) Article 1.1(a)(1)(iv) of the SCM Agreement because the EU determined that through
a set of measures, including the export taxes and levy, and by de facto acting as a
price setter on the market the Government of Indonesia 'induced' the domestic CPO
producers to sell CPO locally and 'entrusted' or 'directed' them to provide CPO to
biodiesel producers in Indonesia for less than adequate remuneration;
(c) Article 1.1(b) and Article 14(d) of the SCM Agreement because the EU disregarded,
without a reasoned and adequate explanation, domestic prices for CPO in Indonesia;
selected a benchmark that neither reflects the prevailing market conditions in
Indonesia, nor the conditions pursuant to which the goods or services at issue would,
under market conditions, be exchanged in Indonesia; and thus determined that CPO
suppliers and producers provided CPO for less than adequate remuneration resulting
in a benefit being conferred;

(d) Articles 12.7 and 12.11 of the SCM Agreement because the EU decided to resort to
facts available with regard to PT Perkebunan Nusantara ("PTPN") as well as with
regard to all producers and distributors of CPO based, in particular, on PTPN's alleged
non-cooperation and because the EU establ ished facts available in a way that did
not reasonably replace the allegedly missing information;
(e) Articles 1.1(a)(2) and 32.1 of the SCM Agreement and Article XVI:1 of the GATT
1994 because the EU determined that the Government of Indonesia put in plac e a
set of measures, including direct subsidies to CPO producers, in order to intervene
in the market ensuring a particular result, i.e. that the biodiesel producers benefit
from artificially low prices for CPO and that through that set of measures, the
Government of Indonesia provides income or price support to the biodiesel industry;
(f) Articles 1.2, 2.1 and 2.4 of the SCM Agreement because the EU determined that the
provision of CPO and provision of income or price support to the biodiesel industry
are specific.
(g) Articles 22.3, 22.4 and 22.5 of the SCM Agreement because on multiple occasions
throughout its analysis of alleged provision of CPO and income or price support to
the biodiesel industry the EU failed to adequately state the reasons on which i ts
conclusions are based and by failing to provide sufficient explanations why certain
claims made by interested parties were rejected.
3. DETERMINATIONS CONCERNING THE EXISTENCE OF A THREAT OF MATERIAL
INJURY AND A CAUSAL LINK
(a) Articles 15.1 and 15.2 of the SCM Agreement because the EU failed to ensure price
comparability when examining the effect of imports from Indonesia on the prices of
domestic like products, failed to establish price undercutting for the product as a
whole and thus failed to establish the existence of significant price undercutting by
means of Indonesian imports;
(b) Articles 15.1 and 15.2 of the SCM Agreement because the EU failed to make an
objective examination, on the basis of positive evidence, of the effect of the allegedly
subsidized imports on prices of EU producers, and thus improperly found significant
price undercutting and price depression;
(c) Articles 15.1, 15.4, 15.7 and 15.8 of the SCM Agreement because the EU failed to
make an objective examination, on the basis of pos itive evidence, of a threat of
injury and of a fragile economic condition of its domestic industry, in particular by
failing to make an objective examination, on the basis of positive evidence, of the
factors having a bearing on the state of the domestic industry, including those listed
in Articles 15.4 and 15.7 of the SCM Agreement;
(d) Articles 15.1, 15.4, 15.7 and 15.8 of the SCM Agreement because the EU failed to
make an objective examination, on the basis of positive evidence, of the nature of
the subsidies in question and the trade effects likely to arise therefrom;
(e) Articles 15.1, 15.4, 15.7 and 15.8 of the SCM Agreement be cause the EU failed to
make an objective examination, on the basis of positive evidence, of whether
Indonesian imports were entering the EU at prices that will have a significant
depressing or suppressing effect on domestic prices, and would likely increas e
demand for further imports;
(f) Articles 15.1, 15.4, 15.7 and 15.8 of the SCM Agreement because the EU failed to
make an objective examination, on the basis of positive evidence, of a rate of
increase of Indonesian imports into the EU market indicating t he likelihood of
substantially increased importation;

(g) Articles 15.1, 15.4, 15.7 and 15.8 of the SCM Agreement because the EU failed to
make an objective examination, on the basis of positive evidence, of freely
disposable production capacity in Indones ia and because the EU improperly
determined that Indonesian producers are likely to direct their spare capacities to
the Union market, causing further injury to the Union industry;
(h) Articles 15.1, 15.2, 15.5 and 15.7 of the SCM Agreement because the EU failed to
make an objective examination, on the basis of positive evidence, of the volume of
allegedly subsidized imports from Indonesia, in particular, by disregarding the fact
that there was no correlation between the evolution of Indonesian imports and the
evolution of the Union industry's market shares or profitability, either during or after
the period under consideration;
(i) Articles 15.1, 15.5, 15.7 and 15.8 of the SCM Agreement because the EU failed to
make an objective examination, on the basis of positive evidence, that allegedly
subsidized imports are, through the effects of subsidization, threatening to cause
injury to the domestic industry; and because the EU failed to ensure that the threat
of injury caused to the domestic industry by other fa ctors, such as imports from
Argentina, was not attributed to allegedly subsidized imports;
(j) Articles 12.1, 12.3 and 15.1 of the SCM Agreement because the EU failed to provide
the necessary information to interested parties, including necessary informati on to
propose alternative methodologies to determine the existence of price undercutting
and because the EU provided a late disclosure of essential information concerning,
among others, price elasticity and changes in the Union market;
(k) Articles 12.1, 12.3, 12.4 and 12.4.1 of the SCM Agreement because the EU failed to
provide a meaningful non -confidential summary of the EU producers' responses to
the post-investigation period questionnaire;
(l) Articles 15.1, 15.8, 22.3, 22.4 and 22.5 of the SCM Agreement because the EU based
its threat of injury determination on information provided by one interested party,
the European Biodiesel Board ("EBB"), while disregarding contradictory information
provided by the Government of Indonesia and Indonesian exporters;
(m) Articles 12.3, 22.3, 22.4 and 22.5 of the SCM Agreement because in its threat of
injury determination the EU provided explanations for some trends concerning the
Union industry's profitability, when they supported its conclusion of a threat of injury
while ignoring other trends that did not support this conclusion and because the EU
failed to explain why arguments made by interested parties in this regard were
rejected.
4. REJECTION OF A PRICE UNDERTAKING OFFER
(a) Articles 15.8, 18.3, and 19.3 of the SCM Agreement and Articles I:1 and VI of the
GATT 1994 because the EU considered that the monitoring of the undertaking
offered by an Indonesian exporting producer to be impracticable and unworkable
and because the EU rejected such offer while accepting it from Argentinean exporting
producers, thus treating imports of the same product from different WTO Members
differently.
As a result of these inconsistencies, the EU's measures also appear to nullify or impair the benefits
accruing to Indonesia, directly or indirectly, under the covered agreements.
Accordingly, Indonesia respectfully requests the Dispute Settlement Body to establish a panel to
examine this matter, with standards terms of reference as set out in Article 7.1 of the DSU.
The Government of Indonesi a reserves the right to raise additional factual and legal issues during
the course of the consultations and in any request for the establishment of a Panel, in light of the
information the European Union may provide.

This panel request relates to the measures at issue and any amendments, supplements, extensions,
replacement measures, renewal measures, implementing measures, and any future action or other
measures the EU may take in connection with the measures at issue.
Indonesia asks that this request be placed on the agenda for the meeting of the Dispute Settlement
Body to be held on 26 October 2023.