- Indonesia’s trade minister calls the EU’s WTO appeal on biodiesel ‘irrelevant’;
- Officials are concerned as to whether the EU will actually comply with WTO rulings, particularly on palm products
Indonesian Trade Minister Budi Santoso has expressed deep disappointment with the European Union’s decision to appeal the World Trade Organization’s ruling in its biodiesel dispute, calling the move “irrelevant” and inconsistent with the spirit of strengthening economic relations between the two trading partners.
Minister Santoso stated: “The EU’s decision to appeal the DS618 Dispute Panel decision is irrelevant. The panel’s decision-making process has been carried out according to procedures, and led by experienced and credible panelists. This appeal step is not in line with the spirit of strengthening economic relations,”
The Minister’s frustration stems from the fact that the EU has chosen to appeal to the WTO Appellate Body, which has been paralyzed and non-functioning since 2019.
This appeal therefore exists in a legal vacuum — what amounts to an “appeal into the void” — and appears to be yet another attempt to delay compliance with international trade law rather than a genuine legal remedy.
In August 2025, the WTO Dispute Panel issued a decisive ruling finding that the EU’s countervailing duties on Indonesian biodiesel — ranging from 8% to 18% — were unjustified and illegal. Rather than accepting this ruling and bringing its measures into conformity with WTO obligations, the EU has chosen this procedural move – which raises serious questions about its goodwill and commitment.
The WTO Panel’s ruling in the case was comprehensive and unambiguous.
First, it found that Completely mischaracterized Indonesia’s support system. The EU claimed that Indonesia’s Oil Palm Plantation Fund (BPDP) operated as a government subsidy giving unfair advantages to biodiesel producers. The Panel found this was incorrect.
Second, it failed to demonstrate actual injury to European industry. The EU claimed there was a “threat of injury” to their biodiesel producers, but the Panel found this was based on assumptions rather than empirical evidence. The EU made predictions about future Indonesian exports without clear data and was unable to explain how Indonesian biodiesel would impact EU prices.
And third, it violated basic transparency and due process obligations. The EU withheld important information from Indonesian exporters, making it impossible for Indonesian companies to properly defend themselves.
While winning these cases is important, Indonesia remains deeply concerned about whether the EU will actually comply with WTO rulings. The EU has been extremely slow to implement previous WTO decisions, particularly regarding RED II. Despite clear WTO findings that RED II discriminates against Indonesian palm oil, the regulation remains in force, continuing to harm Indonesia’s palm oil industry and particularly our 2.7 million smallholder farmers.
Minister Budi Santoso made clear that “Indonesia encourages the EU to cooperate constructively, adopt the panel’s decision, and help overcome the paralysis of the WTO dispute settlement system.” Indonesia will continue to take strategic steps to secure and expand biodiesel market access to the EU market, using all available diplomatic and legal channels.
The timing of this appeal is particularly disappointing given that the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) was recently finalized.