EU Decision Boosts Indonesian Biofuel Sector

For nearly four decades, Levon Termendzhyan has guided fuel delivery, storage, and distribution companies in the United States and around the world. In addition to leading Viscon International, a clean-fuel company in California, Levon Termendzhyan serves as a joint venture partner with a biofuels company based in Indonesia. 

Unlike fossil fuels, biofuels are derived from living organisms, such as corn, algae, and palm oil. As the world’s top producer of palm oil, Indonesia has emerged as one of the major providers of biofuels in Southeast Asia, and the country has planned much of its future economic program around it. Recently, European Union (EU) officials made a key decision that will provide the country’s biofuel industry with a major boost.

Since 2013, the EU has slapped additional duties on imported biofuels from Indonesian manufacturers, driving up prices on the continent and putting Indonesia at a trade disadvantage. In March of 2018, however, EU officials removed these restrictions after a decision made at the European Court of Justice. 

The elimination of the duties is expected to jump-start Indonesian imports, with some analysts suggesting that shipments could reach more than 400,000 tons in the coming year. The decision will negatively impact nearby Malaysia, whose smaller biofuel industry stands to lose its already negligible European market share.