EU tariffs on Indonesian biodiesel welcomed with caution

The EU Commission recently decided to introduce temporary countervailing duties on biodiesel imports from Indonesia, which will be determined on a company-specific basis varying between 8 and 18 percent. Germany’s Union for the Promotion of Oil and Protein Plants (UFOP) welcomed the decision but warns that a suspension or slowdown of biodiesel imports from Indonesia must not lead to European biodiesel producers using palm oil as a raw material instead.

“The introduction of customs duties on biodiesel from Indonesia leads to a market vacuum that is filled by imports of palm oil by European biodiesel producers,” Dieter Bockey with UFOP told Biodiesel Magazine. “This does not benefit European rapeseed cultivation—the introduction of customs duties serves exclusively to secure the market share of European biodiesel producers. We therefore appeal to the responsibility of these companies to use rapeseed oil instead of palm oil so that this vacuum is closed by a ‘European’ raw material.”

Although UFOP naturally desires European biodiesel producers to rely on domestically produced rapeseed oil, Bockey said in Germany and elsewhere drought is causing problems. “In Germany we will probably only harvest 3 million [metric] tons of rapeseed,” he said.

According to Bockey, the critical discussion about palm oil has led to considerable damage. “But if the biodiesel industry nevertheless increasingly switches to palm oil, the environmental associations will publicly denounce this,” he said. “I fear that, regardless of the raw material, biodiesel will then be dead.”

This fear, Bockey said, can be seen from the fact that the EU Commission expressly excludes renewable raw materials from cultivated biomass from all funding options, especially for energy use. “This is now so widespread that even within the framework of the [German] national strategy for the decarbonization of transport, the committees to be set up by the federal government are only in favor of biofuels from residual materials,” he said. “Biofuels from cultivated biomass are practically ignored.”

UFOP also highlighted that import pressure resulting from the effects of the antisubsidy measures against Argentina should be considered.

“The EU Commission has set company-specific penalty tariffs, yet 1.2 million [metric] tons of tariff-free soya methyl ester imports were allowed at the same time,” UFOP stated. “The UFOP fears that this compromise could possibly form the blueprint for the final arrangement with Indonesia.”