The World Trade Organization (WTO) has issued a ruling that supports Indonesia in its dispute with the European Union (EU) over countervailing duties on biodiesel imports. The case, initiated by Indonesia in 2023, challenged the EU’s decision to impose tariffs on biodiesel made from Indonesian palm oil, arguing that such measures violated WTO rules under the Agreement on Subsidies and Countervailing Measures.

In its findings, the WTO panel concluded that several of Indonesia’s claims were valid and recommended that the EU bring its measures into compliance with international trade obligations. The ruling carries significant weight, as the EU is the third-largest export destination for Indonesian palm oil products and a key market for its palm oil–based biodiesel. For Indonesia, the world’s top palm oil producer, the decision represents a potential boost to its biodiesel exports and a step toward reducing trade barriers.

Indonesia’s Chief Economic Minister Airlangga Hartarto welcomed the ruling, noting that preparations are underway for its implementation, though he declined to provide further details. While the EU technically has the option to appeal, the WTO’s appellate body is currently non-functional, making a final resolution unlikely. This case not only highlights ongoing trade tensions between the EU and Indonesia but also underscores the challenges facing the multilateral trading system in resolving disputes amid institutional deadlock.