Biodiesel makers in Indonesia look for new export markets

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Biodiesel producers in Indonesia are looking for new export markets, according to Indonesia Investment.

In early November, the US Commerce Department set anti-subsidy rates in the range of 34.45-64.73% for palm oil-based biodiesel imports from Indonesia. This final ruling was slightly lighter compared with the preliminary 41.06-68.28% range that was set in August 2017.

Indonesian stakeholders are now preparing to make an appeal to the Federal Court and the World Trade Organization (WTO), according to Indonesia Investment.

The original problem occurred when US biodiesel producers claimed that Argentina and Indonesia were flooding subsidised and “dumped” biodiesel imports in the country.  The US’ National Biodiesel Board Fair Trade Coalition claimed that this resulted in market share losses and depressed prices for domestic producers.

According to the Coalition, biodiesel imports from and Indonesia surged by 464% from 2014 to 2016, taking 18.3 percentage points of market share from US manufacturers. Imports of biodiesel from Argentina again jumped 144.5% following the filing of the petitions. These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused US producers to pull back on further investments to serve a growing market, according to the Coalition.

According to the US, Indonesian exporters can sell cheap palm oil-based biodiesel on the US market because the Indonesian government subsidizes the production of biodiesel through the B10, B15, and B20 biodiesel programs. Through these government subsidized programs, diesel is blended with a mandatory amount of fatty acid methyl ester (derived from palm oil). These programs aim at limiting imports of fuel into Indonesia. However, Indonesia claims that biodiesel that is produced under these programs is only sold on the domestic market, not exported abroad.

Indonesia  Investment  quoted Paulus Tjakrawan, chairman of the Indonesian Biofuel Producers' Association (Aprobi), when he said Indonesian biodiesel exporters have already stopped shipments to the USA as their products are now much less competitive than biodiesel that is produced in the USA.

In a statement, Indonesia Investment, added : “Indonesia's total annual installed biodiesel production capacity reached 12 million kilolitres (kl), while the domestic market in Indonesia only consumes 3 million kl per year, hence it is important to find new export markets that can replace the United States now biodiesel exports to the world's top economy have ceased. Examples would be China and India.”