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Palm oil cultivation in Kuwala, in the north of the Indonesian island of Sumatra. Jefta Images / Barcroft Images / Barcroft Media via Getty Images

The European Commission announced on Tuesday (August 13th) that it will impose tariffs on Indonesian biofuels. It involves state subsidies in Indonesia.

Biofuels from Indonesia will now be taxed at between 8 and 18%. It was an investigation by the European Commission that led to this decision, says our correspondent in Brussels, Laxmi Lota . " We have highlighted that Indonesian producers benefited from subsidies, tax breaks and raw materials at below-market prices, " says the EU executive. " This poses a threat of economic damage to EU producers ", the Commission justifies.

The European biofuel market weighs 9 billion euros a year: imports from Indonesia account for up to 400 million euros.

The Commission states that these countervailing duties are provisional and that its investigations are continuing, with the possibility of imposing definitive measures by mid-December. She also said that her investigation was not limited to the palm oil market, the main source for Indonesia's biofuels, but to any public support, regardless of the raw material used.

This measure was immediately hailed by the Association of European Biodiesel Producers (EBB), which had brought the case before the Commission. On the other hand, the Indonesian Minister of Commerce has threatened to raise customs duties on imports of European dairy products in retaliation.

Indonesia and Malaysia produce 85% of the world's palm oil. Both countries regularly protest against the European policy towards this product. They have been very critical recently after the publication of a regulatory text classifying palm oil in the EU as non-sustainable biofuels.

► See also: Palm oil: Indonesia threatens to withdraw from the Paris Agreement