Biodiesel Producers in Indonesia Looking for New Export Markets

author : Administrator

Indonesian biodiesel producers are in search of new export markets after the USA announced to introduce heavy anti-dumping duties and anti-subsidy rates on palm oil-based biodiesel imports from Indonesia. The Trade Ministry said Indonesia exported USD $255.6 million worth of biodiesel to the USA in 2016. This constitutes 89.2 percent of Indonesia's total biodiesel shipments.

In early November the US Commerce Department set anti-subsidy rates in the range of 34.45 - 64.73 percent for palm oil-based biodiesel imports from Indonesia. This final ruling was slightly lighter compared with the preliminary 41.06 - 68.28 percent range that was set in August 2017. Indonesian stakeholders are now preparing to make an appeal at the Federal Court as well as at the World Trade Organization (WTO).

Problems started when US biodiesel producers complained about - what is in their eyes - the dumping of biodiesel on the US market by Indonesian and Argentinean biodiesel exporters. These exporters, allegedly, are even able to sell their biodiesel products below the market value.

According to the USA, 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.

Paulus Tjakrawan, Chairman of the Indonesian Biofuel Producers' Association (Aprobi), 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.

Indonesia's total annual installed biodiesel production capacity reached 12 million kiloliters (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.

Source: Indonesia Investment




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