indonesia.SA.NOTES

MY.LETTER OF COMMENT TO EC

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-Interested parties (e.g., producers, importers, associations) must submit comments within 37 days from the ojeu publication >>

>TL = 12 jan 25

i ask:
you are the world’s best competition lawyer. you are working for a charity called The COCOO. your goal is to enforce competition law and policy. Choose which, if any, of the parties (in the attached document), and support your arguments with points of law and points of fact

1. Parties Involved

  • European Biodiesel Board (Applicant): Representing the EU biodiesel producers, alleging ongoing subsidization by Indonesia.
  • Indonesian Exporters: Likely advocating for the removal of anti-subsidy measures.

2. Legal Framework

  • Article 18 of Regulation (EU) 2016/1037 empowers the EU to impose countervailing duties if subsidies distort trade and harm EU producers​.
  • Market Analysis: The relevant market for biodiesel includes fatty-acid mono-alkyl esters and paraffinic gasoils of non-fossil origin​​.

3. Competition Law and Policy Considerations

  • Harm to EU Producers: If subsidies from Indonesia allow unfair competition, EU biodiesel producers may face price suppression, reduced market share, and potential exits. This would contravene EU competition goals to maintain a fair and competitive market​​.
  • Market Power Concerns: Allowing subsidized imports might give Indonesian producers undue dominance, harming long-term market dynamics​​.

4. Economic and Sustainability Impact

  • Economic Impact: The subsidies may create dependency on imported biodiesel, undermining EU production capacity and employment in the sector​.
  • Sustainability: Supporting EU biodiesel aligns with the European Green Deal objectives to foster local, sustainable industries​.

5. Recommendation

  • Support the European Biodiesel Board: Based on the principles of fair competition and market balance, maintaining anti-subsidy measures ensures a level playing field. This is consistent with Article 101(3) TFEU, which permits agreements and measures that protect competition and consumer welfare when market distortions arise​​.
  • Arguments Against Indonesian Exporters: Continued subsidies distort fair trade and risk reducing competition in the EU by enabling predatory pricing practices.

Conclusion

Enforcing the continuation of anti-subsidy measures aligns with EU competition law principles, supports local industry sustainability, and protects against market distortions. This approach promotes a competitive and balanced internal market consistent with EU regulations and broader policy objectives.

You said:
in this particular case, is there a risk of harm to the consumer interest and/or the public interest ?
In this case concerning the expiry review of anti-subsidy measures on biodiesel imports from Indonesia, the risk of harm to consumer interest and/or public interest can be evaluated as follows:

1. Risk of Harm to Consumer Interest

  • Price Increases: Maintaining anti-subsidy measures may lead to higher prices for biodiesel if EU producers cannot compete with lower-cost imports from Indonesia. This could affect consumers (e.g., fuel users and industrial buyers), who might face increased costs.
  • Reduced Choice: If Indonesian exporters are restricted, the range of biodiesel suppliers available to consumers may shrink, potentially limiting competition and choice in the market.
  • Short-term Benefit of Low Prices: If subsidies are removed, the immediate removal of cheaper biodiesel could affect consumers who benefit from lower costs. However, this short-term advantage may come at the expense of market stability.

2. Risk of Harm to Public Interest

  • Environmental Goals: The EU Green Deal emphasizes sustainability and local production to reduce carbon footprints. Allowing subsidized imports might undermine EU producers’ ability to innovate and scale up environmentally friendly biodiesel technologies​.
  • Strategic Independence: Dependence on imports, especially if driven by subsidies, could jeopardize energy security and the EU’s strategic autonomy in the biodiesel sector.
  • Market Distortions: Subsidized competition might result in the decline of the EU biodiesel industry, leading to job losses, reduced tax revenues, and broader economic repercussions in regions dependent on this industry​​.

Balancing Consumer and Public Interest

  • While consumers might benefit from lower prices in the short term, the public interest in fostering a sustainable, competitive, and self-sufficient biodiesel industry likely outweighs this concern.
  • Over time, a healthier EU market could reduce costs for consumers through innovation, efficiency, and scale economies.

Conclusion

There is a risk of harm to consumer interest in terms of higher prices and reduced choice, but these risks are outweighed by the broader public interest goals, including sustainability, market fairness, and long-term security. These considerations align with the EU’s competition and environmental policies. Balancing these factors supports the continuation of anti-subsidy

Notice of Initiation of an Expiry Review

An expiry review is a formal investigation initiated by the European Commission to determine whether the anti-subsidy or anti-dumping measures currently in place should be extended or allowed to lapse. Under WTO and EU trade rules, these measures typically expire after 5 years, unless a review shows that: Subsidisation (or dumping) is likely to continue or recur if the measures are lifted. and/or Injury to the EU industry would also continue or recur as a result…..  The review ensures that protection measures are justified and fair, balancing the interests of EU industries against those of exporters and consumers

Is the Competition Harm Ongoing?: Yes, the document suggests that the harm to the EU biodiesel industry caused by subsidised imports from Indonesia is ongoing, or would likely recur if the current measures are lifted. Ongoing Harm: The European Biodiesel Board (the applicant) provided evidence that:

    • Subsidisation in Indonesia continues, with significant financial support provided to biodiesel producers (e.g., Biodiesel Subsidy Fund and provision of crude palm oil at below-market prices).
    • There is unused production capacity in Indonesia and barriers to selling in third markets, making the EU an attractive destination.
    • This could lead to increased imports at subsidised prices, causing harm to the EU industry.
  2. Commencement Date:
    • The original anti-subsidy measures were imposed on 28 November 2019 under Commission Implementing Regulation (EU) 2019/2092​.
    • The harm was formally addressed from this date, when definitive countervailing duties were imposed to protect EU producers.
    • The current expiry review is assessing whether the harm is likely to continue or recur as the measures near their 5-year expiration.

In summary:

  • The harm is ongoing, with continued evidence of subsidised competition.
  • The formal measures addressing the harm began on 28 November 2019

regarding the anti-subsidy measures applicable to imports of biodiesel originating in Indonesia, initiated by the European Commission. The review follows a request from the European Biodiesel Board, which alleges that subsidisation and injury to the EU biodiesel industry are likely to continue or recur if the measures are allowed to lapse.

  • Product under review: Fatty-acid mono-alkyl esters and paraffinic gasoils from synthesis or hydro-treatment of non-fossil origin.
  • Grounds for review:
    • Continuation of subsidisation: Evidence suggests that Indonesian producers continue to benefit from subsidy programs, including:
      • Direct transfer of funds (e.g., Biodiesel Subsidy Fund).
      • Provision of goods for less than adequate remuneration (e.g., crude palm oil).
      • Tax benefits and exemptions.
    • Recurrence of injury: Substantial unused production capacity in Indonesia, barriers to selling in third countries, and the attractiveness of the EU market indicate likely increased imports at subsidised prices, which would harm the EU biodiesel industry.

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