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Indonesia ready to fight EU claim

KUALA LUMPUR: INDONESIA is ready to fight a complaint by European biodiesel producers of dumping in the European market, if necessary, but will first ask EU regulators to clarify their allegations, trade ministry officials said yesterday.

European producers have lodged a formal complaint that millions of tonnes of Argentine and Indonesian biodiesel are being dumped on the European Union market.

“We have informed all biodiesel exporters about the case and we have asked them to be cooperative and answer all the questions proposed by EU Commission,” said Deddy Saleh, director general of foreign trade at the trade ministry.

“We have questioned the EU allegation and have asked them to clarify the reasons for it,” he added. “We will fight the allegation if the reasons are not reasonable.”

The head of the European Biodiesel Board (EBB), which represents 75 producers and nearly 80 per cent of European biofuels output, on Thursday said the body was also “actively working” on getting EU emergency procedures imposed.

The EBB said the EU had experienced a surge in Argentine and Indonesian imports, leading to several bankruptcies, forcing European producers to sell below cost and to cut annual production.

From very low levels in 2008, imports from the two countries progressively rose to around 2.5 million tonnes in 2011, or more than 90 per cent of imports into the EU, according to Eurostat and EBB estimates.

“Prices of soyabeans, the raw material, are more expensive in Europe than biodiesel imported from Indonesia and Argentina,” Raffaello Garofalo, EEB secretary general, said on Thursday. “It’s like saying steel costs more than a car. It’s impossible to compete.”

The EBB, citing market sources, said Argentine and Indonesian imports have been sold for between US$60 and US$110 (RM188 and RM344) less than the EU biodiesel, while soyabean oil had sold for around US$100 a tonne more than imported soyabean-based biodiesel.

The European Commission announced in its Official Journal the complaint that Argentinian and Indonesian biodiesel was being sold very cheaply and “thereby causing material injury to the Union industry.”

Palm oil output from Indonesia, the world’s top producer, is expected this year to be between 23 million and 25 million tonnes, compared with 22.5 million in 2011.

Lower export taxes for palm-based biofuel have spurred Indonesian firms to turn palm oil into the renewable fuel and corner the European market.

The Association of Indonesian Biofuel Producers said there were 24 Indonesian companies named in the European complaint sent to the Indonesian government.

Of the 24 companies, many had already stopped operations, while others only produced biodiesel for domestic consumption or for export markets other than the EU, said APROBI secretary general Paulus Tjakrawan. “All the companies on the list will make clarifications to EU on these allegations,” he said.

According to Reuters calculations, Indonesia shipped out 679,274 tonnes of palm-based biodiesel last year, compared with 244,418 tonnes in 2010. From January to July this year, the figure was about 400,000 tonnes.

Most of Indonesia’s biodiesel is palm-oil based and about 90 per cent of exports go to Europe, with Spain and Italy the top buyers. —Reuters

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