31/08/2012 (Jakarta Globe) - Indonesia said it 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 on Friday.

European producers have lodged a formal complaint that millions of tons of Argentine and Indonesian biodiesel are being dumped on the EU 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 percent 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 percent of imports into the EU, according to estimates from Eurostat and the EBB.

Palm oil output from Indonesia, the world’s top producer, is expected this year to be between 23 million and 25 million tons, 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 tons.

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