Contents
Judgment of the General Court (Fourth Chamber, Extended Composition)14 December 2022note(Subsidies — Imports of biodiesel originating in Indonesia — Implementing Regulation (EU) 2019/2092 — Definitive countervailing duty — Article 3(1)(a) of Regulation (EU) 2016/1037 — Financial contribution — Article 3(2) of Regulation 2016/1037 — Benefit — Article 7(1)(a) of Regulation 2016/1037 — Calculation of the amount of the countervailable subsidy — Article 3(1)(a)(iv) and (2) of Regulation 2016/1037 — Action consisting in entrusting or directing a private body to carry out a function constituting a financial contribution — Less than adequate remuneration — Income or price support — Article 28(5) of Regulation 2016/1037 — Use of available information — Article 3(2) and Article 6(d) of Regulation 2016/1037 — Benefit — Article 8(8) of Regulation 2016/1037 — Threat of material injury to the Union industry — Article 8(5) and (6) of Regulation 2016/1037 — Causal link — Attribution analysis — Non-attribution analysis)In Case T‑111/20,PT Wilmar Bioenergi Indonesia, established in Medan (Indonesia),PT Wilmar Nabati Indonesia, established in Medan,PT Multi Nabati Sulawesi, established in North Sulawesi (Indonesia),represented by P. Vander Schueren and T. Martin-Brieu, lawyers,vEuropean Commission, represented by P. Kienapfel, G. Luengo and P. Němečková, acting as Agents,European Biodiesel Board (EBB), established in Brussels (Belgium), represented by M.-S. Dibling and L. Amiel, lawyers,THE GENERAL COURT (Fourth Chamber, Extended Composition),composed, at the time of the deliberations, of S. Gervasoni (Rapporteur), President, L. Madise, P. Nihoul, R. Frendo and J. Martín y Pérez de Nanclares, Judges,Registrar: I. Kurme, Administrator,having regard to the written part of the procedure,further to the hearing on 13 January 2022,gives the following
Judgment
1By their action under Article 263 TFEU, the applicants, PT Wilmar Bioenergi Indonesia, PT Wilmar Nabati Indonesia and PT Multi Nabati Sulawesi, seek annulment of Commission Implementing Regulation (EU) 2019/2092 of 28 November 2019 imposing a definitive countervailing duty on imports of biodiesel originating in Indonesia (OJ 2019 L 317, p. 42; ‘the contested regulation’), in so far as that regulation concerns them.
Background to the dispute
2The applicants are Indonesian companies that produce biodiesel and export it.
3On 19 November 2013, the Council of the European Union adopted Implementing Regulation (EU) No 1194/2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia (OJ 2013 L 315, p. 2), which imposed a definitive anti-dumping duty on the applicants.
4On 25 November 2013, the European Commission adopted Regulation (EU) No 1198/2013 terminating the anti-subsidy proceeding concerning imports of biodiesel originating in Argentina and Indonesia and repealing Regulation (EU) No 330/2013 making such imports subject to registration (OJ 2013 L 315, p. 67).
5On 15 September 2016, the Court annulled Articles 1 and 2 of Implementing Regulation No 1194/2013 in so far as it concerned the first two of the applicants (judgment of 15 September 2016, PT Wilmar Bioenergi Indonesia and PT Wilmar Nabati Indonesia v Council, T‑139/14, not published, EU:T:2016:499).
6On 25 January 2018, following a request from the Republic of Indonesia, the World Trade Organization (WTO) Panel issued an anti-dumping report on the anti-dumping measures imposed by Implementing Regulation No 1194/2013 on imports of biodiesel from Indonesia (WTO Panel report entitled ‘European Union – Anti-dumping measures on biodiesel from Indonesia’, adopted on 25 January 2018 (WT/DS 480/R)). The WTO Panel concluded that the European Union had acted in a manner incompatible with several provisions of the General Agreement on Tariffs and Trade (GATT) and the Agreement on Implementation of Article VI of the GATT (OJ 1994 L 336, p. 103), set out in Annex 1A to the Agreement establishing the WTO (OJ 1994 L 336, p. 3).
7On 22 October 2018, European Biodiesel Board (EBB) lodged a complaint with the Commission pursuant to Article 10 of Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (OJ 2016 L 176, p. 55), as amended by Regulation (EU) 2018/825 of the European Parliament and of the Council of 30 May 2018 (OJ 2018 L 143, p. 1) (‘the basic regulation’). That complaint alleged that imports of biodiesel originating in Indonesia were subsidised and were thereby causing injury to the Union industry.
8By notice published in the Official Journal of the European Union on 6 December 2018 (OJ 2018 C 439, p. 16), the Commission initiated an anti-subsidy proceeding concerning imports of biodiesel originating in Indonesia.
9The product subject to the investigation was ‘fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as “biodiesel”, in pure form or as included in a blend, originating in Indonesia’.
10Biodiesel produced in Indonesia is mainly palm oil methyl ester (‘PME’), which is derived from crude palm oil (‘CPO’). Biodiesel produced in the European Union, by contrast, is mainly rapeseed methyl ester (‘RME’), but it is also produced from other raw materials, including CPO.
11PME and RME both belong to the category of fatty-acid mono-alkyl esters. The term ‘ester’ refers to the transesterification of vegetable oils, that is to say, the mingling of the oil with alcohol, which produces biodiesel and, as a by-product, glycerine. The term ‘methyl’ refers to methanol, the most commonly used alcohol in the process. Fatty-acid mono-alkyl esters are also known as ‘fatty-acid methyl esters’ (‘FAME’). Although PME and RME are both FAME, they have partially different physical and chemical properties and, in particular, a different cold filter plugging point (‘CFPP’). The CFPP is the temperature at which a fuel will cause a fuel filter to plug due to the crystallisation or jellification of some of its components. For RME, the CFPP can be – 14 °C while for PME it is approximately 13 °C. On the market, biodiesel with a specific CFPP is often described as FAME X, for example FAME 0 or FAME 5.
12The investigation into subsidisation and injury covered the period from 1 October 2017 to 30 September 2018 (‘the investigation period’). The examination of trends relevant for the purpose of determining injury covered the period from 1 January 2015 to the end of the investigation period. Where appropriate, the Commission also examined post-investigation period data.
13By letter of 25 January 2019, PT Wilmar Bioenergi Indonesia submitted its replies to the anti-subsidy questionnaire sent to it by the Commission on 19 December 2018. The Commission carried out verification visits at the applicants’ premises in Indonesia from 18 to 21 March 2019.
14In parallel, the applicants made comments as follows: on 17 January 2019, on the complaint; on 14 February 2019, on the data submitted by EBB and the sampled EU biodiesel producers and with regard to the threat of injury allegations; on 14 February 2019, on the applicability of countervailing measures to the alleged subsidy schemes; and, on 19 June 2019, on the threat of injury allegations set out in EBB’s submission of 29 April 2019 and on EBB’s request for registration of imports.
15On 12 August 2019, the Commission adopted Implementing Regulation (EU) 2019/1344 imposing a provisional countervailing duty on imports of biodiesel originating in Indonesia (OJ 2019 L 212, p. 1) (‘the provisional regulation’). The provisional countervailing duty applicable to PT Wilmar Bioenergi Indonesia and PT Wilmar Nabati Indonesia was 15.7%. The provisional countervailing duty applicable to all companies other than those expressly mentioned in Article 1 of the provisional regulation was 18%.
16On 13 August 2019, the Commission disclosed to the applicants the essential facts and considerations on the basis of which it adopted the provisional regulation.
17The applicants commented on the provisional regulation and the considerations on the basis of which the Commission had adopted the provisional regulation on 28 August 2019.
18On 4 October 2019, the Commission disclosed the essential facts and considerations on the basis of which it intended to impose definitive countervailing measures on biodiesel originating in Indonesia. The applicants submitted their observations on those considerations on 14 October 2019.
19At the end of the anti-subsidy proceeding the Commission adopted the contested regulation, by which it confirmed the conclusions which it had reached in the provisional regulation. It took the view that the Indonesian Government had supported the biodiesel industry by means of subsidies within the meaning of Article 3(1) of the basic regulation. The Commission found that that support had been provided through certain schemes. Those schemes included, inter alia, that under which the Oil Palm Plantation Fund, a public body, paid to biodiesel producers which delivered biodiesel to companies designated as ‘Petrofuel entities’ the difference between the mineral diesel reference price, which those entities paid, and the biodiesel reference price set by the Minister for Energy and Mineral Resources. Thus, the Commission concluded that the Indonesian Government had entrusted or directed producers of CPO – a raw material which biodiesel producers purchased to process into biodiesel – to provide that raw material for less than adequate remuneration, in particular by means of export restrictions and price control through the group of public companies PT Perkebunan Nusantara (‘PTPN’).
20The definitive countervailing duty applicable to PT Wilmar Bioenergi Indonesia and to PT Wilmar Nabati Indonesia was 15.7%. The definitive countervailing duty applicable to all companies other than those expressly mentioned in Article 1 of the contested regulation was 18%.
Forms of order sought
21The applicants claim that the Court should:– annul the contested regulation in so far as it concerns them;– order the Commission to pay the costs.
22The Commission, supported by EBB, contends that the Court should:– dismiss the action as inadmissible in so far as it concerns PT Multi Nabati Sulawesi;– dismiss the action as unfounded;– order the applicants to pay the costs.
Law
23In support of their action, the applicants rely in essence on four pleas in law, alleging:– first, infringement of Article 3(1)(a), (1)(a)(i) and (2) and Article 7(1)(a) of the basic regulation and manifest errors of assessment on the part of the Commission in concluding that the payments received from the Oil Palm Plantation Fund constituted a countervailable subsidy and by failing to adjust the benefit allegedly received by the applicants to take account of the discounts granted and the transportation and credit costs that were incurred in order to obtain the alleged subsidies;– second, infringement of Article 3(1)(a)(iv), (1)(b) and (2), Article 6(d) and Article 28(5) of the basic regulation and manifest errors of assessment on the part of the Commission in concluding that there was government support for the provision of CPO for less than adequate remuneration;– third, infringement of Article 8(8) of the basic regulation and a manifest error of assessment on the part of the Commission in finding that there was a threat of material injury to the Union industry;– fourth, infringement of Article 8(5) and (6) of the basic regulation and a manifest error of assessment on the part of the Commission in concluding that imports from Indonesia threatened to cause injury to the Union industry and in ignoring the impact of imports from Argentina.
The first plea in law, alleging infringement of Article 3(1)(a), (1)(a)(i) and (2) and Article 7(1)(a) of the basic regulation and manifest errors of assessment on the part of the Commission in concluding that the payments received from the Oil Palm Plantation Fund constituted countervailable subsidies and in failing to adjust the benefit allegedly received by the applicants to take account of the discounts granted and the transportation and credit costs that were incurred in order to obtain the alleged subsidies
24The first plea comprises four parts, which are disputed by the Commission, supported by EBB.
The first part of the first plea, alleging infringement of Article 3(1)(a) of the basic regulation and a manifest error of assessment in so far as the Commission considered that the payments made by the Oil Palm Plantation Fund constituted a financial contribution by a government or public body
25By the first part, the applicants claim that the payments made by the Oil Palm Plantation Fund did not constitute a financial contribution by a government or public body.
26As a preliminary point, it should be borne in mind that, in accordance with the case-law, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the EU institutions enjoy a broad discretion by reason of the complexity of the economic and political situations which they have to examine (see judgment of 18 October 2018, Gul Ahmed Textile Mills v Council, C‑100/17 P, EU:C:2018:842, paragraph 63 and the case-law cited).
27The broad discretion enjoyed by the EU institutions in the sphere of measures to protect trade also covers the determination of the existence of a financial contribution within the meaning of Article 3(1) of the basic regulation (see, to that effect, judgment of 11 October 2012, Novatex v Council, T‑556/10, not published, EU:T:2012:537, paragraphs 34 and 35).
28In that regard, it should be pointed out that Article 3 of the basic regulation provides that a subsidy is deemed to exist if the conditions in paragraphs 1 and 2 of that article are fulfilled, that is to say, if there is a ‘financial contribution’ by a government in the country of origin or export and if a ‘benefit’ is thereby conferred.
29The aim of Article 3(1)(a) of the basic regulation is to define the concept of ‘financial contribution’ so as to exclude government measures that do not fall within one of the categories listed in that provision. It is with that in mind that Article 3(1)(a)(i) to (iii) of the basic regulation lists specific situations which must be regarded as involving a financial contribution by a government, namely the direct or indirect transfer of funds, foregone government revenue or the provision of goods or services or the purchase of goods, while Article 3(1)(a)(iv) of the basic regulation provides in its second indent that the act, for a government, of entrusting or directing a private body to carry out one or more of the type of functions listed in points (i), (ii) and (iii) is equivalent to the grant by that government of a financial contribution within the meaning of Article 3(1)(a) of the basic regulation (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 106).
30It is apparent from Article 3(1)(a) of the basic regulation, and in particular from the words ‘a financial contribution by a government’ that the financial contribution must be attributable to a government. However, that provision contains no details as to the origin of the funds transferred. Thus, in paragraph 1(a)(i), that article includes in the concept of ‘financial contribution’ a ‘government practice’ which involves a direct transfer of funds, without adding requirements as to the origin of those funds. The fact that the source of the funds does not affect the classification of a government practice as a ‘financial contribution by a government’ is clearly apparent in the situation envisaged by the second indent of Article 3(1)(a)(iv), where a government entrusts or directs a private body to carry out certain functions such as the direct transfer of funds, without specifying the origin of the funds used. It is clear from those provisions that the concept of ‘financial contribution by a government’ covers all the financial means a government may actually use.
31In the present case, it is apparent from recitals 30 to 33 of the contested regulation, and it is not disputed by the applicants, that the Oil Palm Plantation Fund is a public body. That body is used to support purchases of biodiesel by entities appointed by governmental bodies and it entrusted an agency, the Fund Management Agency (‘the Management Agency’), to collect export levies on the exportation of palm oil commodities, which constitute its funds (recitals 41 to 43 of the provisional regulation).
32It is apparent from the provisional regulation that the Biodiesel Subsidy Fund, which is part of the Oil Palm Plantation Fund, was established by Presidential Regulation 61/2015 (recital 40) and that the Management Agency was entrusted with the task of collecting export levies on the exportation of palm oil commodities which constituted the financing of the Oil Palm Plantation Fund (recitals 41 and 42). It is by Article 1(4) of Presidential Regulation 61/2015 that the Indonesian Government granted the Management Agency the right to use export levies and export taxes imposed on CPO and its derivatives, while Article 18(1) of Presidential Regulation 66/2018 expressly stipulates that ‘the use of [the fund] … is purported to cover the difference between market index price of diesel and the market index price of biodiesel’ (recitals 58 and 60). Thus, the difference between that diesel reference price and the biodiesel reference price is paid by the Management Agency to the biodiesel producers out of the Oil Palm Plantation Fund’s funds (recital 47).
33First, the applicants claim that the origin and nature of the funds used by the Management Agency to make payments to biodiesel producers, namely the export levy paid by the exporting producers, are relevant for the purpose of determining whether there is a financial contribution. Second, the export levy was expressly intended to finance the Oil Palm Plantation Fund and the Indonesian Government could not have used it for any other purpose. Third, the Oil Palm Plantation Fund was financed by the CPO supply chain for the benefit of that same chain and the payments therefore involved no cost for the Indonesian Government.
34In that regard, it should be borne in mind, as was stated in paragraph 30 above, that Article 3(1)(a) of the basic regulation contains no details as to the origin of the funds transferred and thus covers all the financial means a government may actually use.
35Thus, the interpretation of that provision proposed by the applicants which takes into account the origin of the funds paid by the government in the guise of a financial contribution and the way in which that government may use those funds under national legislation must be rejected. In addition, the fact that the funds available to the Oil Palm Plantation Fund come from the export levy paid by exporting producers does not mean that when those funds are paid to biodiesel producers to cover the difference between the market index price of diesel and the market index price of biodiesel, there is no cost for the public body which pays them.
36It should be added, first, that that conclusion is not called into question by the judgment of 14 July 1988, Fediol v Commission (188/85, EU:C:1988:400), relied on by the applicants. In that case, which concerned an action for annulment of a Commission decision terminating an anti-subsidy proceeding initiated upon a complaint by the applicant, the Court of Justice did indeed reject the argument that the concept of subsidy should be construed broadly and that there is a subsidy if the result of all the measures adopted is to confer a benefit on the recipients. However, in the same judgment, the Court held that the concept of export subsidy referred to in Article 3 of Council Regulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidised imports from countries not members of the European Economic Community (OJ 1984 L 201, p. 1) was conceived by the EU legislature as necessarily implying a financial burden borne directly or indirectly by public bodies and that the concept of a charge covered not merely cases in which the State advanced funds, but also those in which it waived recovery of tax debts (judgment of 14 July 1988, Fediol v Commission, 188/85, EU:C:1988:400, paragraph 12). That judgment, which does not take into consideration the origin of the funds used, does not mean that payments made by the Management Agency in the present case, financed by the collection by that body of an export levy, cannot constitute a financial burden borne directly by a public body.
37Second, the applicants’ argument based on the report of the Appellate Body of the WTO’s Dispute Settlement Body entitled ‘United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint)’ adopted on 12 March 2012 (WT/DS 353/AB/R, paragraph 617) (‘the “US – Large Civil Aircraft (2nd complaint)” Appellate Body report’) cannot succeed.
38In that regard, it should be borne in mind that, according to the case-law, interpretations of the Agreement on Subsidies and Countervailing Measures in Annex 1A to the Agreement establishing the WTO (OJ 1994 L 336, p. 156) (‘the SCM Agreement’) adopted by that body cannot bind the General Court in its assessment of the validity of the contested regulation (see, to that effect and by analogy, judgments of 1 March 2005, Van Parys, C‑377/02, EU:C:2005:121, paragraph 54; of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 103; and of 19 May 2021, China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Others v Commission, T‑254/18, under appeal, EU:T:2021:278, paragraph 419).
39However, the Court of Justice also points out that the general international law principle of compliance with treaty commitments (pacta sunt servanda), laid down in Article 26 of the Vienna Convention on the Law of Treaties of 23 May 1969, means that the Courts of the European Union must, for the purposes of interpreting and applying the SCM Agreement, take account of the interpretation that the WTO’s Dispute Settlement Body has given to the various provisions of that agreement (see, by analogy, judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 32, and Opinion of Advocate General Pitruzzella in Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2021:533, point 24, followed by the Court in that case; see also, by analogy, judgment of 6 October 2020, Commission v Hungary (Higher education), C‑66/18, EU:C:2020:792, paragraph 92). Thus, there is nothing to preclude the General Court from referring to it when it comes to interpreting the provisions of the basic regulation which correspond to provisions of the SCM Agreement (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 103).
40In any event, paragraph 617 of the ‘US – Large Civil Aircraft (2nd complaint)’ Appellate Body report relied on by the applicants states that ‘a direct transfer of funds will normally involve financing by the government to the recipient’. It must be noted that that report concludes that the financial contribution is granted ‘normally … by the government’, but, contrary to what the applicants claim, does not impose any requirements as to the origin of the funds available to that government.
41Since the applicants’ arguments have been rejected in their entirety, the first part of the first plea must be rejected.
The second part of the first plea, alleging infringement of Article 3(1)(a)(i) of the basic regulation and a manifest error of assessment inasmuch as the Commission concluded that the payments from the Oil Palm Plantation Fund constituted grants
42By the second part of the first plea, the applicants submit that the payments made by the Oil Palm Plantation Fund do not constitute a direct transfer of funds in the form of a grant, but a payment for the purchase of biodiesel.
43It should be recalled, as stated in paragraphs 29 and 30 above, that Article 3(1)(a) of the basic regulation lists specific situations which must be regarded as involving a financial contribution by a government, including the direct or indirect transfer of funds, and that that financial contribution must be attributable to a government.
44Furthermore, in order to determine whether a direct transfer of funds represents a benefit constituting a grant within the meaning of Article 3 of the basic regulation which may justify the imposition of a countervailing duty, the absence of consideration, or of equivalent consideration, on the part of the undertaking receiving that transfer must be taken into account.
45In the present case, the procedure classified by the Commission as a ‘direct transfer of funds’, according to recitals 45 to 50 of the provisional regulation (and recital 37 of the contested regulation), was the following:(45) More precisely, Presidential Regulation 26/2016 stipulates in its Article 9(1) that “[t]he Director-General of [the Directorate-General of New Renewable Energy and Energy Conservation] shall appoint the Petrofuel Entity which shall carry out the procurement of biodiesel as meant in Article 4 in the framework of financing by the … Management Agency by observing the policy of the Steering Committee of the … Management Agency” and in the following Article 9(8) that “[b]ased on the approval from the Minister as meant in paragraph (7), the Director-General of [the Directorate-General of New Renewable Energy and Energy Conservation] on behalf of the Minister shall appoint: a. the biodiesel producers which are going to participate in the procurement of biodiesel” …(46) The biodiesel producers which choose to participate and have been allocated a quota pursuant to that regulation are under the obligation to sell the monthly amount of biodiesel to the so-called “Petrofuel Entity”. So far, the [Indonesian Government] has appointed the following as Petrofuel Entity:(a) PT Pertamina (“Pertamina”), a State-owned oil and gas company, and(b) PT AKR Corporindo Tbk (“AKR”), a private oil and gas company.(47) The [Oil Palm Plantation Fund] envisages a specific payment mechanism, whereby Pertamina (and for some small volumes, AKR) pays biodiesel producers the diesel reference price (as opposed to the actual biodiesel price which, during the [investigation period] … would have been higher), whereas the difference between such diesel reference price and the biodiesel reference price is paid to the biodiesel producers out of the [Oil Palm Plantation Fund] by the Management Agency.(48) The reference price for diesel and biodiesel is determined by the Minister [for] Energy and Mineral Resources … in [the] following way:(a) The diesel reference price is based on prices reported by Platts Singapore for oil … and the production cost of diesel in Indonesia.(b) … the biodiesel reference price is based on the CPO domestic price, to which transformation costs are added …(49) More precisely, each biodiesel producer – including all the exporting producers – invoices Pertamina (or AKR, as the case may be) the volume of biodiesel which the buyer is required to use under the blending obligation [under which, for a number of applications, such as for example public transport, operators are under the legal obligation to use as fuel a blend of mineral diesel and biodiesel which contains at least 20% of biodiesel], and Pertamina (or AKR) pays to the producer the diesel reference price for that period. …(50) The producer of biodiesel, in order to obtain reimbursement of the price difference between the price paid by Pertamina and AKR (based on the diesel reference price) and the reference price for biodiesel, shall then send an additional invoice for the same volume to the Management Agency, enclosing a list of documents. Once the Management Agency has received the invoice, and after verification of the elements contained therein, the Management Agency shall pay to the relevant biodiesel producer the difference between the reference price for diesel (paid by Pertamina or AKR, as the case may be) and the reference price of biodiesel set for that period.’
46In the first place, the applicants claim that the Commission was wrong to classify the payments made by the Oil Palm Plantation Fund as a direct transfer of funds and not as payments made in consideration for the purchase of biodiesel. First, they submit that the system of payments from the Oil Palm Plantation Fund involved reciprocal obligations for the Indonesian Government and for the biodiesel producers, namely the sale of biodiesel for the payment of a price. In their view, the existence of the prior contracts between the applicants and the Oil Palm Plantation Fund and the fact that the former sent invoices to the latter in order to receive the payments should be taken into consideration in that regard. The nature of the Oil Palm Plantation Fund, which seeks to support the purchase and use of biodiesel in order to implement the Indonesian Government’s blending mandate, should have been taken into consideration when determining the nature of the contribution at issue. Second, most of the purchases of biodiesel from the applicants were made by PT Pertamina (‘Pertamina’), a public body which is part of the Indonesian Government. Third, on the basis of those factors, the applicants submit that the Commission should have classified the payments made by the Oil Palm Plantation Fund as part of a purchase of goods within the meaning of Article 3(1)(a)(iii) of the basic regulation.
47In that regard, it should be noted that, in recital 38 of the contested regulation, the Commission stated that ‘the disbursement[s] of the [Oil Palm Plantation Fund] in favour of the biodiesel producers cannot qualify as payments due in a purchase contract between the [Indonesian Government] and the biodiesel producers but constitute a direct transfer of funds’.
48It is apparent from the factual context of the present case, as set out in recitals 45 to 50 of the provisional regulation and recital 37 of the contested regulation (see paragraph 45 above) and which is not disputed by the applicants, that, in the context of the system conceived by Presidential Regulation 26/2016, the Management Agency did not intervene in the transaction between the biodiesel producers, on the one hand, and Pertamina or PT AKR Corporindo Tbk (‘AKR’), on the other. It was the Director-General of the Directorate-General of New Renewable Energy and Energy Conservation who, first, appointed the entities that would carry out the procurement of biodiesel (in accordance with the policy defined by the Steering Committee of the Management Agency) and, second, on behalf of the Minister, appointed the biodiesel producers who were to participate in the procurement of biodiesel and allocated the volume of biodiesel for each biodiesel producer. The reference price for diesel and biodiesel was determined by the Minister for Energy and Mineral Resources. Next, each producer invoiced Pertamina or AKR for the volume of biodiesel which these undertakings were required to use under the blending mandate and the latter paid the producer the diesel reference price. It was only at the end of that transaction that the biodiesel producers sent, in order to obtain reimbursement of the difference between the reference price for diesel and the reference price for biodiesel, an additional invoice for the same volume of biodiesel to the Management Agency, together with a copy of the decision of the Directorate-General of New Renewable Energy and Energy Conservation certifying that they were allowed to participate in the procurement of biodiesel and indicating the respective volumes of biodiesel allocated, a copy of the contract for procurement of biodiesel between them and Pertamina or AKR, the certificate signed by Pertamina or AKR and the biodiesel producer in question, stamped by the Indonesian Government and including information about the place of delivery, the volume and type of biodiesel provided, and the amount of transport fees, and a copy of the agreement between the Management Agency and the relevant biodiesel producer.
49In addition, the Commission also considered, in recitals 67 and 69 of the contested regulation, that the reference price for biodiesel that was paid to independent suppliers did not reflect supply and demand under normal market conditions without government intervention, and that the amount of the transformation costs calculated by the Indonesian Government as part of the formula used to calculate the reference price for biodiesel was excessive. The Commission did not make a manifest error of assessment in deducing from that situation, in recital 68 of the contested regulation, that, without those payments, prices of biodiesel in Indonesia would be lower. Since the payments made by the Management Agency to biodiesel producers are calculated on the basis of a reference price for biodiesel that does not result from normal market conditions, they cannot be regarded as a price supplement which the producers are entitled to obtain in return for their supplies to Pertamina or AKR.
50On the basis of those facts, the Commission did not make a manifest error of assessment in finding, in recital 37 of the contested regulation, having regard for its broad discretion, recognised by the case-law cited in paragraph 27 above, in determining whether there was a financial contribution within the meaning of Article 3(1) of the basic regulation and a benefit within the meaning of Article 3(2), that the funds paid by the Oil Palm Plantation Fund ‘[were] not therefore part of a contract for consideration (such as the purchase of biodiesel by the government in exchange of a price)’. It is not apparent from the presentation of the facts that the Oil Palm Plantation Fund was involved in the transaction between the biodiesel producers and the ‘Petrofuel entities’, namely Pertamina and AKR, or that that fund received any consideration for the payments it made. Thus, the nature of the transaction – which the applicants emphasised at the hearing – does not lead to the conclusion that the payments made by that fund formed part of a reciprocal obligation scheme.
51That conclusion cannot be called into question by the nature of the Oil Palm Plantation Fund, which was intended, according to the applicants, to support the purchase and use of biodiesel in order to implement the Indonesian Government’s blending mandate. In the present case, the nature and purpose of that fund were correctly taken into account by the Commission, in recitals 56 to 61 of the provisional regulation and in recital 30 of the contested regulation, in order to classify the payments it made as a ‘financial contribution’.
52Furthermore, that conclusion can also not be called into question by the applicants’ reference to paragraphs 616 and 617 of the ‘US – Large Civil Aircraft (2nd complaint)’ Appellate Body report, where it is stated that ‘in such a transaction [a “grant”], money or money’s worth is given to a recipient, normally without an obligation or expectation that anything will be provided to the grantor in return’, that ‘a direct transfer of funds will normally involve financing by the government to the recipient’ and that ‘in some instances, as in the case of grants, the conveyance of funds will not involve a reciprocal obligation on the part of the recipient’.
53In that regard, it should be noted as a preliminary point that, according to the case-law, the interpretations of the SCM Agreement adopted by that body are not capable of binding the General Court in its assessment of the validity of the contested regulation (see paragraphs 38 and 39 above).
54Moreover, it appears, on reading the extract cited by the applicants, that the concept of direct transfer of funds ‘normally’ involves financing granted ‘by the government’ and that, in the case of a ‘grant’, ‘the conveyance of funds will not involve a reciprocal obligation’ and is carried out ‘normally without an obligation or expectation [as regards the recipient] that anything will be provided to the grantor in return’.
55As regards the applicants’ arguments set out in paragraph 46 above, first, as is apparent from paragraphs 48 and 49 above, since the payments made by the Management Agency to biodiesel producers are calculated on the basis of a reference price for biodiesel that does not result from normal market conditions, they cannot be regarded as a price supplement which the producers are entitled to obtain in return for their supplies to Pertamina or AKR. The applicants’ argument in that regard must therefore be rejected.
56Second, it should be noted that it is apparent from recital 46 of the provisional regulation that Pertamina belongs to the Indonesian State. Even if, contrary to the Commission’s findings set out in recitals 48 and 49 of the contested regulation, Pertamina were a public body, it is a separate entity from the Oil Palm Plantation Fund and the Management Agency and there is nothing to indicate that Pertamina acted as a purchaser of biodiesel together with the Oil Palm Plantation Fund as the applicants maintain. As the Commission rightly points out, Pertamina was not an agency entrusted by the Government to perform only certain functions, but an oil and gas company which performed the same functions as AKR, a private oil and gas company, as is clear from recital 46 of the provisional regulation and recital 55 of the contested regulation, a point that has not been disputed by the applicants.
57In the light of the foregoing considerations, it must be observed that, even if the applicants’ claims that Pertamina was a public body were correct, such an error on the part of the Commission would justify annulment of the contested regulation only if it called into question its lawfulness by invalidating the Commission’s entire analysis relating to the existence of a subsidy (see, to that effect and by analogy, judgment of 25 October 2011, Transnational Company “Kazchrome” and ENRC Marketing v Council, T‑192/08, EU:T:2011:619, paragraph 119), which is not the case here.
58Third, the fact that the payments in question cannot be classified as consideration for the purchase of biodiesel means that the transaction at issue in the present case cannot be classified as a ‘purchase’ of goods by the Indonesian Government and therefore come within the scope of Article 3(1)(a)(iii) of the basic regulation. Accordingly, the applicants’ arguments to that effect must be rejected.
59In the second place, the applicants put forward a series of arguments seeking to establish that, even if the Court considers that Pertamina is not a public body, it was nevertheless ‘entrusted’ or ‘directed’ by the Indonesian Government to purchase biodiesel and that the biodiesel producers were ‘entrusted’ or ‘directed’ to sell it within the meaning of Article 3(1)(a)(iv) of the basic regulation.
60In that regard, it must be stated that it was not Pertamina’s payment of the diesel reference price as consideration for the purchase of biodiesel that was considered by the Commission to be a ‘direct transfer of funds’, or the sale of biodiesel by biodiesel producers, but the payment by the Management Agency, a public body, of the difference between the diesel reference price and the biodiesel reference price for the period in question to the biodiesel producer concerned. Accordingly, Article 3(1)(a)(iv) of the basic regulation, which concerns the conduct of private bodies (see paragraphs 111 and 116 below), is not applicable.
61As a result, the whole of the second part of the first plea must be rejected.
The third part of the first plea, alleging infringement of Article 3(2) of the basic regulation and a manifest error of assessment inasmuch as the Commission found that payments from the Oil Palm Plantation Fund conferred a benefit
62By the third part, the applicants claim that the payments made by the Oil Palm Plantation Fund do not confer a benefit on biodiesel producers.
63In that regard, it should be noted that Article 3 of the basic regulation provides that a subsidy is deemed to exist where there is a ‘financial contribution’ or ‘income or price support’ by a government and if a ‘benefit’ is thereby conferred. Articles 6 and 7 of that regulation lay down the procedures for calculating the ‘benefit’ conferred. According to the case-law, a benefit is conferred on the recipient if the latter is in a more favourable situation than it would have been in in the absence of the subsidy scheme. In addition, it is clear from Article 3(1) and (2) of the basic regulation that it is only where a government financial contribution confers a real benefit on an exporting producer that a subsidy is deemed to exist for that exporting producer (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraphs 195 and 210).
64By their first complaint, the applicants submit that the Commission relied on a manifestly incorrect counterfactual scenario when it found that, in the absence of the Oil Palm Plantation Fund and its payments, the biodiesel producers could not have sold their product on the Indonesian market and that the prices of biodiesel would be lower. In the absence of the Oil Palm Plantation Fund the blending mandate would still exist and the blenders would be required to purchase biodiesel in order to comply with the blending mandate and biodiesel producers would charge the same price as they could have obtained on the world market.
65In the present case, the Commission considered, in recital 65 of the contested regulation, that the correct counterfactual scenario was not one in which, in the absence of the Oil Palm Plantation Fund, the blenders would pay the reference price for biodiesel. According to the Commission, without the blending mandate, without the Oil Palm Plantation Fund and without its payments, blenders would not have an incentive to purchase biodiesel and biodiesel producers would not receive the supplement corresponding to the difference between the reference price for diesel and the reference price for biodiesel set by the Indonesian Government.
66It is apparent from the provisional regulation that the blending mandate was introduced by Regulation of the Ministry of Energy and Mineral Resources No 12/2015 (recital 189). In the same year, 2015, the Biodiesel Subsidy Fund, which is part of the Oil Palm Plantation Fund, was established by Presidential Regulation 61/2015 (recital 40) and the Management Agency was entrusted with the task of collecting export levies on the exportation of palm oil products which constituted the financing of the Oil Palm Plantation Fund (recitals 41 and 42). By the same provision (Article 1(4) of Presidential Regulation 61/2015), the Indonesian Government granted the Management Agency the right to use export levies and export taxes imposed on CPO and its derivatives and imposed an obligation to procure and use biodiesel (recital 60). The funds used to pay biodiesel producers the difference between the diesel reference price and the biodiesel reference price came from the funds thus allocated to the Management Agency.
67It appears that the implementation of the blending mandate in the system devised by the Indonesian Government depended on financing by the Management Agency. It is a complex scheme established by the Indonesian Government with the objective of supporting purchases of biodiesel by entities appointed by governmental bodies, as is apparent from Presidential Regulations 24/2016 and 26/2016 (recital 44 of the provisional regulation). The scenario of the existence of the blending mandate without funding by the Management Agency is thus purely hypothetical and the Commission cannot be criticised for not having based its analysis on it.
68Accordingly, the Commission did not make a manifest error of assessment within the meaning of the case-law cited in paragraphs 26 and 27 above, which also applies to the determination of the existence of a benefit conferred on the recipient of a subsidy, in considering the scheme as a whole for the purposes of the determination of the existence of a benefit.
69By their second complaint, the applicants submit that the Commission was wrong to find that, without the Oil Palm Plantation Fund, the reference price for biodiesel would have been lower.
70As a preliminary point, the Commission’s argument that the applicants’ complaint is ineffective must be rejected. It is true that the Commission correctly pointed out, in its written pleadings and also at the hearing, that Article 3(2) of the basic regulation does not require the precise amount of the benefit to be calculated, but rather the existence of a benefit to be determined. The calculation of the benefit came under Articles 6 and 7 of the basic regulation. However, the fact that the reference price for biodiesel was higher than that which would have resulted from market conditions, without there being any need, at this stage of the analysis, to quantify that accurately, is one of the aspects of the Oil Palm Plantation Fund payment system which support the conclusion that there is a benefit. The fact that the amount of the payments from the Oil Palm Plantation Fund might possibly also be taken into consideration when calculating the benefit conferred on the beneficiary does not mean that it is a priori irrelevant for the purposes of determining whether there is such a benefit.
71The applicants’ argument is therefore indeed effective.
72In the present case, recital 69 of the contested regulation states as follows:‘Notably, the Commission observed that the reference prices used by the [Indonesian Government] to determine the amount of grant disbursed by the [Oil Palm Plantation Fund] are not indicative of a market price as the formula to calculate them is not based on an undistorted market reality. This is because on the one hand the whole market, upstream and downstream, is distorted and cannot be therefore representative of normal, competitive, market conditions. On the other hand, the Commission considered that the amount of the conversion costs calculated by the [Indonesian Government] as part of the formula used to calculate the reference price for biodiesel (the average domestic price for CPO and a conversion fee of … 100 [United States dollars (USD)] per tonne added to that) is excessive. The Commission verified the actual transformation costs of some of the exporting producers and observed that the [Indonesian Government]’s calculation overstate[d] those costs. These actual transformation costs amounted to, on average, an amount between USD 60 to USD 80 per tonne during the investigation period …’
73It is thus clear from recital 69 of the contested regulation that the Commission took into account two factors in order to conclude that there was a benefit. First, it concluded that the entire Indonesian market, upstream and downstream, was distorted and could not be representative of normal, competitive market conditions and, second, it considered that the amount of the transformation costs, namely USD 100 per tonne, used in the formula to determine the reference price for biodiesel, was excessive by comparison with the actual costs of some of the exporting producers that it had verified.
74In the first place, the applicants submit that the biodiesel reference price did not shield biodiesel producers from market fluctuations, as it evolved in line with the CPO ‘cost, insurance, freight’ (CIF) Rotterdam (Netherlands) quotations.
75In that regard, it should be noted that the fact that the Indonesian biodiesel reference price evolved in line with CPO CIF Rotterdam quotations, assuming that were proved, does not mean that it constituted a market price. As the Commission correctly points out, the fact that the reference price for biodiesel followed fluctuations in other international prices does not alter the fact that that reference price was set on the basis of the domestic price of CPO (see recital 48 of the provisional regulation) which had been subject to intervention by the Indonesian Government (see paragraph 150 below). Furthermore, the CPO CIF Rotterdam price already includes the transport and insurance price, which is not the case for the product sold on the domestic market. Accordingly, the applicants’ argument cannot, by itself, invalidate the Commission’s findings.
76In the second place, the applicants argue that the biodiesel reference price was determined on the basis of the cost of raw materials, to which a reasonable amount was added to cover the various conversion costs. The Commission failed to take into consideration the fact that those ‘conversion costs’ were not limited to transformation costs, but also included a reasonable amount for ‘selling, general and administrative costs and profit’.
77It is apparent from recital 81 of the contested regulation, and it is not disputed by the applicants, that conversion costs had been set at USD 100 per tonne since 21 March 2016. That shows that those costs were not subject to variations. Furthermore, there is no apparent link between budget items such as ‘selling, general and administrative costs and profit’ and the category of ‘conversion costs’. Therefore, the Commission cannot be criticised for not adding to the actual conversion costs of the exporting producers, which were between USD 60 and USD 80 per tonne during the investigation period according to recital 69 of the contested regulation, such budgetary items which do not appear to have any connection with the transformation of the product.
78It follows from the foregoing that the Commission did not make a manifest error of assessment within the meaning of the case-law cited in paragraph 26 above when it concluded that the Indonesian biodiesel reference price was excessive.
79By their third complaint, the applicants claim that any benefit resulting from payments from the Oil Palm Plantation Fund was passed on to the ‘Petrofuel entities’.
80In that regard, it must be stated that the applicants’ arguments seeking to dispute the existence of a financial contribution conferring a benefit on them have been rejected in the context of the first and second parts as well as the current part of the first plea. It is also common ground that the payments at issue, corresponding to the difference between the diesel reference price and the biodiesel reference price, were paid by the Management Agency to the biodiesel producers, including the applicants. The applicants have failed to adduce sufficient evidence to show that part of those sums or the benefit derived from their payment was transferred to AKR and Pertamina. Such evidence is, however, necessary in order to establish that an EU institution has committed a manifest error of assessment such as to justify the annulment of a measure (see, to that effect, judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T‑444/11, EU:T:2014:773, paragraph 62). The fact that the scheme established by the Indonesian Government could also have been beneficial to AKR and Pertamina does not mean that the benefit conferred on the recipients was passed on to those undertakings. Furthermore, even assuming that the blenders benefited from advantageous purchase terms for biodiesel by acquiring it at the reference price for diesel and not at the reference price for biodiesel, that fact does not preclude that, under the same scheme, the biodiesel producers enjoyed another benefit as a result of the payments made by the Management Agency.
81In the light of the foregoing considerations, the third complaint must be rejected.
82By their fourth complaint, the applicants claim that the Commission’s benefit analysis does not take account of the fact that the Oil Palm Plantation Fund was financed by the export levies paid, inter alia, by biodiesel producers. The purpose of those levies is to finance the Oil Palm Plantation Fund and they do not exist in the absence of that fund and its payments.
83As a preliminary point, the Commission’s argument that the applicants’ complaint is ineffective must be rejected. Since the export levies form part of the financing of the Oil Palm Plantation Fund, their role in the system of payments from that fund may have an effect on whether a benefit is granted to the recipient. The fact that the amount of the export levies might also be taken into account when calculating the benefit conferred on the recipient does not mean that it is a priori irrelevant for the purpose of determining whether such a benefit exists.
84In the present case, it is clear from recital 89 of the provisional regulation, and it is accepted by the applicants, that the export levy does not apply only to biodiesel, but rather ‘CPO and the downstream products’, which includes biodiesel. Furthermore, it is apparent from that recital that during the investigation period the export levy was much higher for CPO than for biodiesel. In that respect, the applicants do not explain how an export levy which applies to several products would offset the subsidy from which one of those products benefits and thus cancel out the benefit conferred on the recipients of that subsidy.
85In addition, and without prejudice to the case-law cited in paragraphs 38 and 39 above, the arguments which the applicants base on the reports of the WTO bodies cannot be accepted.
86First, the applicants rely on the WTO Panel report entitled ‘United States – Measures Affecting Trade in Large Civil Aircraft – Second Complaint (Recourse to Article 21.5 of the [Dispute Settlement Understanding] by the European Union)’, adopted on 9 June 2017 (WT/DS 353/RW). That dispute concerned whether the direct transfers of funds from the State of South Carolina to the company Boeing had been offset, in the form of investments by Boeing into real estate on the site of the project concerned, or whether they constituted a subsidy. The Appellate Body had taken the view that it had not been demonstrated that compensation had been provided by Boeing, since it was not apparent from the agreement between the State of South Carolina and Boeing that the residual value of the real estate would revert to the State of South Carolina. Accordingly, that dispute did not concern whether export levies relating to a range of products offset a subsidy from which the producers of one of those products benefit, and the applicants’ argument based on an a contrario analysis of the panel report must be rejected.
87Second, the applicants rely on the WTO Appellate Body report entitled ‘United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India’, adopted on 8 December 2014 (WT/DS 436/AB/R). That dispute concerned whether it was necessary to take account of the costs borne by the recipients of certain loans in order to determine whether those loans conferred a benefit on those recipients. Accordingly, that dispute did not concern whether export levies relating to a range of products offset a subsidy which producers of one of those products receive and the applicants’ argument by analogy must be rejected.
88For those reasons, the applicants’ arguments cannot be accepted and, consequently, the whole of the third part of the first plea must be rejected.
The fourth part of the first plea, alleging infringement of Article 7(1)(a) of the basic regulation and a manifest error of assessment inasmuch as the Commission did not adjust the amount of the subsidy to take account of the discounts granted as well as transport and credit costs
89By the fourth part, the applicants claim that, when it calculated the amount of the countervailable subsidy, the Commission should have deducted the transport and credit costs borne by the applicants.
90Article 7(1) of the basic regulation provides as follows:‘…In establishing [the amount of the countervailable subsidy], the following elements may be deducted from the total subsidy:(a) any application fee or other costs necessarily incurred in order to qualify for, or to obtain, the subsidy;(b) export taxes, duties or other charges levied on the export of the product to the Union specifically intended to offset the subsidy.Where an interested party claims a deduction, it must prove that the claim is justified.’
91As a preliminary point, it should be noted that it is clear from Article 7(1) of the basic regulation, and in particular from the wording ‘may be deducted’, that the Commission enjoys a broad discretion in the application of that provision, in accordance with the case-law cited in paragraph 26 above. The deduction of those elements from the amount of the countervailable subsidy is subject to the interested party proving that its claim for deduction is justified. Once that proof has been adduced, the Commission must make the deduction requested.
92In the first place, the applicants submit that the Commission should have deducted from the amount of the countervailable subsidy the costs of transporting the biodiesel in the context of sales to Pertamina and AKR, which were necessary in order to obtain payments from the Oil Palm Plantation Fund. The applicants consider that the General Court is not bound in its interpretation of Article 7(1)(a) of the basic regulation by the Information from the Commission – Guidelines for the calculation of the amount of subsidy in countervailing duty investigations (OJ 1998 C 394, p. 6) (‘the guidelines on the calculation of the subsidy’), which limits the deductible transport costs to those paid directly to the government or to a public body.
93In that regard, it should be noted that the guidelines are an instrument intended to define, while complying with higher-ranking law, the criteria which the Commission proposes to apply in the exercise of its discretion when calculating the amount of countervailable subsidies (see, to that effect and by analogy, judgment of 15 March 2006, Daiichi Pharmaceutical v Commission, T‑26/02, EU:T:2006:75, paragraph 49). It follows that, when it adopts guidelines, the Commission cannot depart from the higher-ranking text of which it sets out the application criteria.
94Furthermore, according to the case-law, by adopting rules of conduct intended to produce external effects, as is the case with the guidelines which are aimed at economic operators, and announcing by publishing them that it will apply those rules to the cases to which they relate, the institution in question imposes a limit on the exercise of its discretion and cannot depart from those rules under pain of being found to be in breach of general principles of law, such as the principles of equal treatment or the protection of legitimate expectations. It cannot therefore be precluded that, on certain conditions and depending on their content, such rules of conduct, which are of general application, may produce legal effects (see, by analogy, judgment of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraphs 210 and 211).
95The guidelines on the calculation of the subsidy provide, under heading ‘G. Deduction from amount of subsidy’, that ‘the only fees or costs that may normally be deducted are those paid directly to the government [during] the investigation period’, that ‘it must be shown that such payment is compulsory in order to receive the subsidy’ and that ‘payments to private parties, e.g. lawyers, accountants, incurred in applying for subsidies, are not deductible’.
96Those clarifications are compatible with the higher-ranking text which they are intended to clarify. First, the specification that the deductible fees and costs must be ‘compulsory in order to receive the subsidy’ is consistent with the condition laid down in Article 7(1)(a) of the basic regulation, namely that the deductible fees or costs must be ‘necessarily incurred’ in order to qualify for the subsidy. Second, the clarification that ‘the only fees or costs that may normally be deducted are those paid directly to the government [during] the investigation period’ is also compatible with that provision. In view of the Commission’s broad discretion in this area, in accordance with the case-law cited in paragraph 91 above, the Commission did not, contrary to what the applicants claim, wrongly limit deductible fees and costs when it stated in the guidelines that the ‘application fee … or other costs necessarily incurred in order to qualify for … the subsidy’ referred to in Article 7(1)(a) of the basic regulation were those ‘paid directly to the government [during] the investigation period’.
97Accordingly, the Commission was fully entitled to apply, in recitals 87 to 92 of the contested regulation, the guidelines on the calculation of the subsidy to the request for the deduction of transport costs.
98In the present case, first, the applicants do not claim that the transport costs for delivery of the biodiesel were paid directly to the Indonesian Government during the investigation period. Second, their argument that the transport costs were necessary in order to receive payments from the Oil Palm Plantation Fund which were conditional on the biodiesel being delivered cannot be accepted. Those costs were linked exclusively to the performance of the sale contract between the applicants and Pertamina or AKR. The fact that, in order to receive the payments from the Management Agency, the biodiesel producers had to attach to their invoice a series of supporting documents including the information relating to the place of delivery, the volume and type of biodiesel provided and the amount of transport costs does not mean that those costs were ‘compulsory in order to receive the subsidy’ within the meaning of the guidelines on the calculation of the subsidy and does not alter that conclusion.
99Accordingly, those arguments must be rejected.
100In the second place, the applicants submit that the Commission should have deducted from the amount of the countervailable subsidy a credit cost in relation to the Oil Palm Plantation Fund payments. According to the applicants, they can charge the Oil Palm Plantation Fund its part of the price relating to the biodiesel sales only once the invoice has been issued to Pertamina or AKR. The fund subjects the data provided to multiple checks and the applicants receive payment only several months after the invoice was issued to Pertamina or AKR. The applicants clarified at the hearing that the credit cost was due to the period of time elapsing between the delivery of biodiesel and the payments by the Oil Palm Plantation Fund.
101It must be stated that those credit costs, assuming they are proved, are the result of the procedure established by the Indonesian Government and of the time taken to deal with the documentation submitted by the applicants to the Management Agency, in accordance with the procedure described in recitals 49 and 50 of the provisional regulation. It follows that they are not ‘costs necessarily incurred in order to qualify for … the subsidy’ within the meaning of Article 7(1)(a) of the basic regulation. Nor are those costs ‘fees or costs … paid directly to the government’ within the meaning of the guidelines on the calculation of the subsidy, since, being costs connected with the Oil Palm Plantation Fund’s processing times, they cannot be regarded as amounts ‘directly paid’ to that fund. In addition, the applicants refer to the period between the delivery of biodiesel and the date on which the invoice is sent to Pertamina or AKR, on the one hand, and the date of the payments, on the other. However, the relevant date for assessing whether credit costs are necessarily incurred for the purposes of obtaining the subsidy should be not the date of the delivery of biodiesel or the date on which the invoice is sent to Pertamina or AKR, but the subsequent date on which the invoice is sent to the fund, a formality necessary to obtain payments from the fund. The applicants thus fail to establish, by such an argument, that they would be exposed to credit costs for the purposes of payment of the grant by the fund.
102Therefore, that argument must be rejected.
103In the third place, the applicants claim that they also incurred a ‘discount cost’ (a cost resulting from the discount applied) in order to obtain payments from the Oil Palm Plantation Fund, which the Commission should have deducted from the amount of the countervailable subsidy.
104The Commission contends that the applicants did not assert, during the investigation, that it was appropriate to adjust the amount of the subsidy to take account of the discounted value of the biodiesel sold to Pertamina and AKR. The applicants, without submitting that they made a request to that effect, claim that the Commission had at its disposal the necessary information and, in accordance with the principle of sound administration, that it should have played a more active role and should have considered that the evidence submitted by the interested parties justified a deduction.
105On that point, it must be stated that it is clear from Article 7(1) of the basic regulation that, where a party claims a deduction, ‘it must prove that the claim is justified’. It is clear from the facts of the present case, set out in paragraph 104 above, that the applicants did not make such a request, nor have they provided the necessary details in that respect. With regard to the deduction of costs from the amount of countervailable subsidy and in view of the broad discretion enjoyed by the Commission in accordance with the case-law cited in paragraph 91 above, the Commission cannot be criticised for having failed to deduct costs on its own initiative.
106In the light of the foregoing considerations, that argument and, accordingly, the whole of the fourth part of the first plea must be rejected.
107Since all of the arguments put forward in the context of the first plea in law have been rejected, that plea must be rejected.
The second plea in law, alleging infringement of Article 3(1)(a)(iv), (1)(b) and (2), Article 6(d) and Article 28(5) of the basic regulation and manifest errors of assessment on the part of the Commission in concluding that there was government support for the provision of CPO for less than adequate remuneration
108The second plea consists of three parts, which are disputed by the Commission, supported by EBB.
The first part of the second plea, alleging infringement of Article 3(1)(a)(iv) and Article 28(5) of the basic regulation and a manifest error of assessment on the part of the Commission when it concluded that CPO suppliers were entrusted or directed to provide CPO for less than adequate remuneration
109By the first part, the applicants submit that the Commission was wrong to conclude that the Indonesian Government entrusted or directed CPO suppliers to provide their goods for less than adequate remuneration, first, by means of an export tax and an export levy and, second, by means of transparent ‘price setting’ by PTPN, a CPO producer entirely owned by the Indonesian Government. The applicants also claim that Indonesian CPO suppliers are not subject to any inducement or threat causing them to sell their product on the domestic market at lower prices.
110As a preliminary point, it should be borne in mind that the broad discretion enjoyed by the EU institutions in the sphere of measures to protect trade, according to the case-law, also covers the determination of the existence of a financial contribution within the meaning of Article 3(1) of the basic regulation (see paragraphs 26 and 27 above).
111Article 3 of the basic regulation provides that a subsidy is deemed to exist if the conditions in paragraphs 1 and 2 of that article are satisfied, that is to say, if there is a ‘financial contribution’ by a government in the country of origin or export and if a ‘benefit’ is thereby conferred. Under Article 3(1)(a)(iv) of the basic regulation, a ‘financial contribution’ exists if a government ‘entrusts or directs a private body to carry out one or more of the type of functions illustrated in points (i), (ii) and (iii) which would normally be vested in the government, and the practice, in no real sense, differs from practices normally followed by governments’.
112The concepts of ‘entrusting’ or ‘directing’ are not defined in the basic regulation.
113According to settled case-law, the meaning and scope of a term for which EU law provides no definition must be determined by considering its usual meaning in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part (see, to that effect, judgments of 3 September 2014, Deckmyn and Vrijheidsfonds, C‑201/13, EU:C:2014:2132, paragraph 19, and of 5 April 2017, Changshu City Standard Parts Factory and Ningbo Jinding Fastener v Council, C‑376/15 P and C‑377/15 P, EU:C:2017:269, paragraph 52).
114In that regard, it should be noted that the objective of Article 3 of the basic regulation is to define the concept of a ‘subsidy’ which could be subject to a countervailing duty.
115More specifically, the aim of Article 3(1)(a) of the basic regulation is to define the concept of ‘financial contribution’ so as to exclude government measures that do not fall within one of the categories listed in that provision. It is with that in mind that Article 3(1)(a)(i) to (iii) of the basic regulation lists specific situations which must be regarded as containing a financial contribution by a government, namely the direct or indirect transfer of funds, foregone government revenue or the provision of goods or services. Article 3(1)(a)(iv) of the basic regulation provides in its second indent that the act, for a government, of entrusting or directing a private body to carry out one or more of the type of functions listed therein is equivalent to the grant by that government of a financial contribution within the meaning of Article 3(1)(a) of the basic regulation (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 106).
116In that context, the second indent of Article 3(1)(a)(iv) of the basic regulation is, in essence, an anti-circumvention provision, which aims to ensure that governments of third countries are not able to escape the rules on subsidies by adopting measures which, in appearance, do not strictly fall within the scope of Article 3(1)(a)(i) to (iii) of the regulation, but have, in practice, equivalent effects (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 107). That is also the WTO Appellate Body’s interpretation of Article 1.1(a)(1)(iv) of the SCM Agreement, the content of which is similar to that of Article 3(1)(a)(iv) of the basic regulation (see the WTO Appellate Body report, entitled ‘United States – Countervailing duty investigation on Dynamic Random Access Memory (DRAMS) from Korea’, adopted on 27 June 2005 (WT/DS 296/AB/R, paragraph 113); ‘the “United-States – DRAM” Appellate Body report’).
117According to its usual meaning in everyday language, the term ‘to entrust’ means ‘to bestow upon someone a function or office, to endow, delegate or appoint’. Thus, the case-law has interpreted that term, in order to ensure full effectiveness of the second indent of Article 3(1)(a)(iv) of the basic regulation, as referring to ‘any action of the government which amounts, directly or indirectly, to conferring on a private body the responsibility of performing a function of the type referred to in Article 3(1)(a)(i) to (iii) of that regulation’ (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 108). It follows that the term ‘to direct’, which, according to its usual meaning in everyday language, means ‘to implore, order, dictate, require, prescribe, insist’, includes any act of the government which consists, directly or indirectly, in exercising their powers over a private body so that it performs a function of the type referred to in Article 3(1)(a)(i) to (iii) of the basic regulation.
118Furthermore, it is clear from the coordinating conjunction indicating the alternative, ‘or’, between ‘entrust’ and ‘direct’ that those two actions may take place independently of each other, but also together. Moreover, it is apparent from the second indent of Article 3(1)(a)(iv) of the basic regulation, which does not restrict the nature or purpose of the action of ‘entrusting’ or ‘directing’, and from the case-law cited in paragraph 117 above, which takes into consideration ‘any action of the government’, that such action does not necessarily have to be the result of an act or measure taken in isolation, but that it may also be the result of several measures taken together.
119It is in the light of those considerations that it is necessary to analyse the Commission’s conclusion that, by measures such as an export tax and an export levy, de facto control through PTPN of domestic CPO prices and the grant of subsidies to CPO producers, the Indonesian Government sought to obtain from CPO producers the provision of that product on the Indonesian market for less than adequate remuneration.
–The export tax and the export levy
120By the first complaint, the applicants claim that the Commission was wrong to find that the export tax, which was set at zero during the investigation period, and the export levy, which was a tax intended to generate revenue and which was set at zero in December 2018, had the effect of ‘entrusting’ or ‘directing’ CPO suppliers to provide their goods in return for less than adequate remuneration.
121It is apparent from recitals 113 to 117 of the provisional regulation that, in the present case, the Indonesian Government imposed an export tax and an export levy on CPO.
122According to recitals 87 and 88 of the provisional regulation, the export tax had been introduced in 1994 and the 2016 version consisted of a progressive tariff schedule on CPO and on other products, including biodiesel (the rate of which was systematically lower than that applied to CPO). Indonesian exporters paid a tax linked to the Indonesian Government’s reference price for CPO exports. Therefore, when the reference export price set by the Indonesian Government increased, so did the export tariff. When the reference price was below USD 750 per tonne, the applicable export tax rate was 0%. During the investigation period, the CPO price remained below the threshold of USD 750 per tonne and, therefore, no export tax was payable.
123According to recital 89 of the provisional regulation, in 2015 the Indonesian Government had also introduced an export levy on CPO and downstream products. During the investigation period that levy was set at USD 50 per tonne for CPO and at USD 20 per tonne for biodiesel.
124In order to establish the existence of a financial contribution in the provisional regulation, the findings of which are confirmed by the contested regulation (in recitals 102 to 161), the Commission carried out an analysis based on the relevant WTO case-law.
125On the basis of that analysis, the Commission took the view, in recitals 111 to 157 of the provisional regulation, that the action of the Indonesian Government against the CPO producers was an action ‘entrusting’ or ‘directing’ them to provide their goods to national users at less than adequate remuneration in order to create a domestic market in Indonesia where prices were artificially low. The Commission then noted, in recital 160 of that regulation, that all Indonesian CPO producers were to be regarded as private bodies and, in recitals 162 and 169 of that regulation, that those undertakings had supplied CPO on the domestic market in return for less than adequate remuneration. Lastly, in recital 170 of that regulation, the Commission considered that the provision of CPO located on Indonesian soil to the Indonesian biodiesel industry was a function which was normally vested in the government. The Commission took the view in the same recital that the determination, by the government of a State which had sovereignty over its natural resources, of the regulatory conditions for the provision of the country’s raw materials to undertakings in that country came within such a function.
126By the analysis at issue, the Commission established, as is apparent from recital 134 of the contested regulation, that, by means of the export tax and the export levy, in combination, as stated in recitals 103, 146 and 157 of the contested regulation, with other measures, the Indonesian Government had sought to obtain from CPO producers the provision of CPO on the Indonesian market for less than adequate remuneration. That government had put in place a system of export restrictions which made the export of CPO commercially unattractive.
127The fact that the Indonesian Government devised and established such a system is highlighted by various factors mentioned by the Commission in the contested regulation and in the provisional regulation.
128Thus, it was noted, in recital 116 of the provisional regulation, that the Indonesian Government directly linked the export tax system to international CPO prices and not to other data (such as production levels or environmental effects) with the aim to have an effect on prices paid by exporting producers. It is apparent from Table 1 in that recital that the Indonesian Government followed the trend in prices at international level and adjusted the level of export taxes on the basis of those prices with the result that there was a fall in the profitability of exports.
129The Commission also noted, in recital 119 of the provisional regulation, that the Indonesian Directorate-General for Customs and Excise had publicly explained, in 2015, that export duties were intended to ensure the availability of raw materials and to stimulate the growth of the domestic downstream palm oil industry, of which biodiesel manufacturing is an integral part.
130As regards the export levy, the Commission stated, in recital 117 of the provisional regulation, that its introduction in 2015 had coincided with a period when Indonesian prices were almost identical to world prices and had allowed biodiesel producers to purchase CPO at lower prices than would otherwise be available. In addition, in recital 114 of the contested regulation, the Commission explained that that levy financed the Oil Palm Plantation Fund and de facto exclusively supported the biodiesel industry by means of subsidies.
131The contested regulation also mentions, in recitals 128 and 129, two press articles from after the investigation period which confirm the Commission’s findings in relation to that period. Thus, in an article of 19 December 2018, the Secretary-General of the Indonesian Palm Oil Association predicted that exports of CPO could jump once the export levy had been reduced to zero. In an article of 6 December 2018, an independent analyst took the view that the suspension of the export levy would increase the competitiveness of Indonesian palm oil exporters as they would have made savings the bulk of which were likely to flow back to the Indonesian farmers via higher domestic CPO prices.
132On the basis of those considerations, the Commission concluded, in recital 118 of the contested regulation, that ‘the overall system of export restraints put in place by the [Indonesian Government] [was] designed to benefit the biodiesel industry by keeping domestic prices of CPO artificially low’.
133In that regard, in the first place, the applicants claim that the export tax, which was set at zero during the investigation period, could not entrust or direct CPO suppliers to provide their goods for less than adequate remuneration.
134However, as has been pointed out in paragraphs 122 and 128 above, the Indonesian Government directly linked the export tax system to international CPO prices. It follows that the fact that the export tax was set at zero during the investigation period was due, as stated in recital 113 of the contested regulation, to the specific market circumstances. The low international price levels were sufficient in themselves to encourage CPO producers to satisfy the internal demand as a matter of priority. As the Commission rightly points out, if the intention of the Indonesian Government was no longer to collect that tax, they would have repealed the tax. In addition, as is apparent in particular from recital 118 of the contested regulation, it was the combined effect of the export tax and the export levy (which, for its part, was levied during the investigation period) which was taken into consideration by the Commission, as an overall system of export restraints put in place by the Indonesian Government which was designed to benefit the biodiesel industry by keeping domestic prices of CPO artificially low.
135Accordingly, the applicants’ argument that any reference by the Commission to the export tax must be ignored must be rejected.
136In the second place, the applicants claim that, in establishing the export levy, the Indonesian Government exercised its general regulatory powers to generate revenue from exports of commodities which, despite being subject to an export levy, would remain competitive on export markets.
137First, the applicants submit that the Commission acknowledged, in recital 62 of the contested regulation, that when it decided to finance the Oil Palm Plantation Fund by means of an export levy, the Indonesian Government merely exercised its general regulatory powers, a decision which cannot be described as an act of ‘entrusting’ or ‘directing’. The applicants rely in support of their argument on the ‘United States – DRAM’ Appellate Body report.
138On that point, it must be held that, in adopting the export restrictions in question in a specific context in which (i) the export tax was linked to international CPO prices and increased when those prices increased, and (ii) the export levy was introduced during a period in which Indonesian prices were almost identical to world prices, that government restricted the freedom of action of those companies by limiting, in practice, their ability to decide the market on which to sell their products (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 124).
139That conclusion cannot be called into question by the Commission’s analysis in recital 62 of the contested regulation, where, in dealing with another aspect of the case, namely the existence of a benefit, it notes that ‘all the companies involved in the CPO value chain, including the biodiesel producers, are compelled to pay the [export] levy’, and concludes that it is inappropriate to claim that the Oil Palm Plantation Fund was privately funded; rather, it was financed through ‘the normal fiscal and public revenue collecting activity of the [Indonesian Government]’.
140Without prejudice to the case-law cited in paragraphs 38 and 39 above, that observation by the Commission does not mean that, contrary to the interpretation of the WTO Appellate Body cited by the applicants, namely paragraph 115 of the ‘United States – DRAM’ Appellate Body report, it interpreted Article 3(1)(a)(iv) of the basic regulation ‘so broad[ly] as to allow Members to apply countervailing measures to products whenever a government is merely exercising its general regulatory powers’.
141In the present case, the fact that the Indonesian Government continuously established and adjusted the export restrictions in question so as to ensure that the objective pursued through those restrictions was attained cannot be regarded as mere encouragement of domestic producers of CPO. On the contrary, those actions of the Indonesian Government led those producers to sell their goods on the domestic market at a less than adequate price, a consequence which, contrary to what the applicants claim, cannot be regarded as a ‘mere by-product of governmental regulation’ within the meaning of paragraph 114 of the ‘United States – DRAM’ Appellate Body report (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 125).
142Accordingly, the applicants’ argument in that regard must be rejected.
143Second, the applicants submit that the documents and communications cited by the Commission in recitals 118 to 121 of the provisional regulation in support of its finding that the Indonesian Government expressly pursued a strategic objective to support and develop the biodiesel industry, in particular by seeking to reduce the CPO price, concern the export tax, which was set at zero and had no effect on the CPO producers, and not the export levy. According to the applicants, the two instruments were distinct and the purpose of the export levy was to finance the Oil Palm Plantation Fund and not to reduce domestic CPO prices.
144That argument of the applicants is based on a misreading of the provisional regulation. After stating, in recital 118 of that regulation, that a number of documents demonstrated the strategic objective pursued by the Indonesian Government, the Commission cited public declarations by the Indonesian Government concerning the export tax and export duties (recital 119) and reports of the WTO and the Organisation for Economic Co-operation and Development (OECD) concerning export tax (recitals 120 and 121). Next, in recital 122, the Commission directed its analysis to the export levy and found that the purpose of that levy, which was allocated to the Oil Palm Plantation Fund, was to support the biodiesel industry, like most of that fund’s money. It is apparent from those recitals that the Commission examined both the export tax and the export levy before reaching conclusions on the objectives of those export restraints in recital 123 of the provisional regulation and in recital 118 of the contested regulation. Furthermore, it should be recalled that the applicants’ arguments based on the fact that the export tax was set at zero during the investigation period have already been rejected in paragraph 134 above.
145The fact that, as the applicants submit, the export levy also applies to exports of biodiesel and that it was designed to support the Oil Palm Plantation Fund cannot invalidate those considerations. First, it is apparent from recital 117 of the provisional regulation that that levy was considerably higher for CPO than for refined products such as biodiesel and, second, the fact that the export levy was allocated to the Oil Palm Plantation Fund, which in turn was responsible for the payments under the system set out in paragraph 45 above, supports the Commission’s conclusions.
146Therefore, the Commission did not make a manifest error of assessment, within the meaning of the case-law cited in paragraphs 26 and 27, when it concluded, in recital 123 of the provisional regulation, that ‘the objective of the export restraints system put in place by the [Indonesian Government] [was] indeed to directly and indirectly support the biodiesel industry and that this [was] not merely a “side effect” of the exercise of general regulatory powers’, as confirmed in recital 118 of the contested regulation.
147Third, the applicants maintain that the Commission’s finding in recital 115 of the contested regulation that ‘the introduction of the export levy in 2015 by the [Indonesian Government] coincided with a period where Indonesian CPO prices were nearly identical to world prices’ is purely conjectural and does not prove that the export levy was introduced in order to reduce CPO prices, which constantly evolved in line with world prices. The applicants also submit that the Commission was wrong to find, in recital 116 of the contested regulation, that the export levy had achieved its objective of reducing CPO prices on the Indonesian domestic market. According to the applicants, that difference between domestic prices and export prices of CPO corresponded to the USD 50 per tonne export levy. In addition, the decrease in CPO prices on the Indonesian market is explained by a collapse of the global commodity market.
148It should be noted that the applicants do not call into question the Commission’s findings of fact, that is to say, (i) that the introduction of the export levy coincided with a decrease in CPO prices on the Indonesian market and (ii) that the increase in biodiesel production recorded in Table 2 set out in recital 192 of the provisional regulation entailed an increase in domestic consumption of CPO in 2016, as stated in recital 117 of the provisional regulation. It is also apparent from a graph produced by the applicants in the reply that the price of CPO on the Indonesian domestic market fell during that period and that the prices of Indonesian CPO were, generally, lower than world prices.
149By such a line of argument, the applicants challenge not the accuracy of the findings of fact made by the Commission, but the Commission’s assessment of those facts. According to the case-law, the General Court’s review of the evidence on which the EU institutions based their findings in the sphere of anti-subsidy policy does not constitute a new assessment of the facts replacing that made by the institutions. That review does not encroach on the broad discretion of the institutions in the field of commercial policy, but is restricted to showing whether that evidence was able to support the conclusions reached by the institutions. The General Court must, therefore, not only establish whether the evidence put forward is factually accurate, reliable and consistent, but also ascertain whether that evidence contained all the relevant information which had to be taken into account in order to assess a complex situation and whether it was capable of substantiating the conclusions reached (see judgment of 18 October 2018, Gul Ahmed Textile Mills v Council, C‑100/17 P, EU:C:2018:842, paragraph 64 and the case-law cited).
150In the present case, the Commission assessed the information in question relying on the purpose for which the overall system of export restraints was designed. The Court finds that the Commission did not make a manifest error of assessment when it concluded, in recital 118 of the contested regulation, on the basis of a set of information – namely the existence of an export tax and an export levy, the public declarations of the Indonesian Government, the reports of the WTO and the OECD, the increase in domestic consumption of CPO and the fall in prices of that product on the Indonesian domestic market after the introduction of the export levy – that the overall system of export restraints was designed to benefit the biodiesel industry by keeping domestic prices of CPO artificially low, rather than it being a mere side-effect of a government measure to collect public revenue.
151Fourth, the applicants claim that the export levy did not have the effect of restricting CPO exports, since CPO producers still export up to 70% of their production.
152That argument cannot be accepted. The fact that 70% of Indonesian CPO was exported does not mean that CPO producers were able freely to choose to export their product and to obtain adequate remuneration. On the contrary, as the Commission correctly points out, the CPO producers first satisfied domestic demand, which corresponded to 30% of the production according to the public sources referred to in recital 153 of the contested regulation, and it was only afterwards that they had recourse to exports. It follows that those producers were not seeking to export a greater proportion of their production where prices were higher, because the potential additional export benefits were limited by the export restrictions introduced by the Indonesian Government.
153Since that argument has been rejected, the first complaint must be rejected in its entirety.
–Price control by PTPN
154By their second complaint, the applicants submit that the Commission was wrong to find that the Indonesian Government reduced CPO prices on the domestic market through PTPN.
155As a preliminary point, it should be borne in mind, as is apparent from recitals 91 to 99 and 126 of the provisional regulation and from recitals 120 and 123 of the contested regulation, that, in view of the lack of cooperation on the part of CPO suppliers and PTPN, the Commission applied Article 28(1) of the basic regulation and based its findings on the facts available.
156In the first place, the applicants criticise the Commission for having found that PTPN set its CPO prices at an artificially low level and did not act as a rational operator on the market. They submit that PTPN, which represented only 6% to 9% of total supplies of CPO in Indonesia, did not set its prices since, first, those prices were determined by means of daily auctions reflecting supply and demand in Indonesia and, second, the fact that Indonesian CPO prices were lower than the international markets was due to the fact that Indonesia was the world’s main producer of CPO. In their view it is apparent from the information provided by eight CPO suppliers that their sales of CPO were profitable, which shows that they followed the PTPN prices because they considered them to be profitable and which also means that PTPN acted as a rational operator.
157In that regard, it is apparent from recitals 128 to 131 of the provisional regulation that PTPN is an entirely State-owned group of companies, under the control of the Indonesian Government, which produces various commodities, including CPO.
158It is explained in recitals 132 and 133 of the provisional regulation, and it is common ground between the parties, that PTPN organised daily auctions to sell its CPO. Before launching the daily tendering procedure, PTPN would identify a ‘price idea’ for the day, but was not obliged to reject bids below that ‘price idea’.
159The Commission relied on a number of items of available data in order to conclude that PTPN set its CPO prices at an artificially low level. First, it is apparent from recital 151 of the contested regulation that the Indonesian Government influenced PTPN’s decisions as regards its pricing policy. When the price offered for the purchase of CPO was lower than the ‘price idea’ set for the day, PTPN’s Board of Directors, on which only the Indonesian Government was represented, could decide to accept the offer, which it did regularly. Second, it is apparent from recital 125 of the contested regulation and recital 135 of the provisional regulation that the available information had revealed that, by following the Indonesian Government’s directives, PTPN had been loss-making in recent years. Third, as is apparent from recitals 122 to 124 of the contested regulation, the Commission was unable to obtain any evidence proving that the ‘price idea’ reflected any market price resulting from a competitive tendering process. Rather, the domestic CPO price was lower than all of the international benchmarks.
160Those findings cannot be called into question by the fact that, as is apparent from recital 146 of the provisional regulation, PTPN represents only 6% to 9% of total CPO supplies in Indonesia, which, according to the applicants, shows that CPO buyers, which are large undertakings, are able to impose their prices on both PTPN and on small CPO suppliers, in accordance with the law of supply and demand.
161It must be noted that it is true that the market is characterised by such an imbalance in favour of CPO buyers, which are large undertakings with ‘countervailing buying power’. The Commission acknowledged this, in recital 146 of the provisional regulation. However, that fact cannot call into question the conclusion that, through the intermediary of PTPN, the Indonesian Government had been able to implement a price-setting mechanism. As the Commission noted in recital 146 of the provisional regulation without being contradicted, another feature of the CPO market, this time on the supply side, was its fragmentation between a large number of small undertakings, in particular individual farmers. In such a context, once PTPN had set a price for the day, it was very difficult for CPO suppliers, each with a small market share, to set higher prices when faced with buyers with significant buying power. The applicants’ claims that the structure of the market prevented PTPN from setting prices must therefore be rejected. On the contrary, it appears that that market structure was a factor which enabled PTPN to set CPO prices.
162On the basis of the foregoing, it must be held that the Commission did not make a manifest error of assessment when it concluded, in recitals 124 and 125 of the contested regulation, on the basis of the facts available, that PTPN did not act as a rational operator on the market and set the CPO price at a level below the benchmarks.
163In the second place, the applicants dispute the Commission’s conclusion in paragraph 145 of the provisional regulation that ‘by making public the daily unit price of CPO, the [Indonesian Government] effectively sets a maximum price at which the commodity will be sold on that specific day’. According to the applicants, CPO is a commodity traded worldwide on the basis of various widely available indexes and it is not unusual for its pricing to follow specific trends, and the Commission’s analysis shows that the Indonesian CPO market is very competitive.
164It is apparent from recital 160 of the contested regulation that the Commission concluded that, in the present case, the Indonesian Government, through PTPN, acted as price-setters on the Indonesian domestic market and that all independent CPO suppliers followed those price indications. First of all, the Commission established that PTPN set its CPO prices at an artificially low level, and the applicants have not validly challenged those findings, as is apparent from paragraphs 157 to 159 above. Next, the Commission noted, in recitals 140 and 141 of the provisional regulation, that PTPN published the result of the daily tender on its online platform always at 15.30 on the day of the tender, indicating the exact award unit price for CPO, and that the daily negotiations between CPO suppliers other than PTPN and CPO purchasers, in which the starting price corresponded to the daily PTPN prices, generally took place after the results of the tenders were available. The daily price of CPO on the domestic market closely reflected the award price of the daily auctions organised by PTPN and, in addition, the unit price paid by the exporting producers to non-State-owned CPO producers was, during the investigation period, always the same as or lower than the PTPN price for that day. Lastly, as is apparent from recital 138 of the contested regulation, those acts took place in a context in which the Indonesian Government had adopted measures undermining suppliers’ ability to export their CPO.
165Against such a background, the Commission did not commit a manifest error of assessment in finding that the Indonesian Government had, by means of transparent ‘price setting’ by PTPN, entrusted or directed CPO suppliers within the meaning of the case-law cited in paragraphs 116 to 118 above.
166In the third place, the applicants submit that the Commission infringed Article 28(5) of the basic regulation by failing to take into account the information which they had supplied to it concerning PTPN.
167According to the case-law, Article 28 of the basic regulation authorises the institutions to use the facts available in order not to undermine the effectiveness of EU trade defence measures each time the EU institutions are faced with a refusal to cooperate or lack of cooperation in the context of an investigation (see, to that effect and by analogy, judgment of 26 January 2017, Maxcom v City Cycle Industries, C‑248/15 P, C‑254/15 P and C‑260/15 P, EU:C:2017:62, paragraph 67), but does not require them to use the best facts available (judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T-444/11, EU:T:2014:773, paragraph 94). It follows from this that the Commission’s broad discretion in the realm of measures to protect trade, in accordance with the case-law cited in paragraph 26 above, also applies where Article 28 of the basic regulation is to be applied.
168In that respect, Article 28(5) of the basic regulation provides that, where the Commission’s determinations are based on the provisions of paragraph 1 of that article, including the information supplied in the complaint, that information is to be ‘checked by reference to information from other independent sources which may be available … or information obtained from other interested parties during the investigation’, ‘where practicable and with due regard to the time limits of the investigation’.
169In the present case, it must be held, as the Commission rightly points out, that the applicants do not dispute the application of Article 28(1) of the basic regulation (see paragraph 155 above). They maintain that the Commission should have taken account of the information which they provided during the investigation pursuant to Article 28(5) of the basic regulation.
170Yet, in their pleadings, the applicants do not call into question the Commission’s factual findings, but rather their assessment. The facts on which they rely, namely the fact that the sales of eight CPO suppliers linked to the Wilmar group were profitable and that CPO is a commodity traded worldwide on the basis of various widely available indexes, cannot call into question the Commission’s conclusions.
171In any event, the need to guarantee the effectiveness of trade defence measures also justifies, in circumstances such as those of the present case, those institutions being authorised to act on the basis of such a body of consistent evidence, such as that set out in paragraphs 158 and 159 above, in order to conclude that CPO was supplied at a less than adequate price (see, to that effect and by analogy, judgment of 26 January 2017, Maxcom v Chin Haur Indonesia, C‑247/15 P, C‑253/15 P and C‑259/15 P, EU:C:2017:61, paragraph 64 and the case-law cited).
172The applicants’ line of argument must therefore be rejected and, accordingly, the whole of the second complaint must be rejected.
–The action of entrusting or directing
173By their third complaint, the applicants put forward a series of arguments in order to demonstrate that Indonesian CPO suppliers were not subjected to any form of threat or persuasion causing them to sell CPO on the Indonesian market at lower prices.
174It must be stated that, by this complaint, the applicants reiterate certain arguments concerning the effects of the export levy which have already been rejected in the analysis of the preceding complaints. The arguments concerning the effect of the export levy, namely the fact that the majority of Indonesian CPO production is exported, the fact that CPO suppliers have the choice to sell on the domestic or worldwide market, the effects of the export levy on domestic CPO prices and the relationship between the Indonesian CPO prices and global prices, have already been rejected in paragraphs 136 to 153 above.
175The applicants also dispute the conclusions drawn by the Commission from two press articles cited in recitals 153 and 154 of the provisional regulation, claiming that the Commission did not establish a causal link between the support given by the Indonesian Government to the CPO industry and the claims that that support was used to persuade them to supply CPO for less than adequate remuneration. According to the applicants, the articles in question concerned the Indonesian Government’s support of small holders, the aim of which is to satisfy, in terms of volume rather than price, the increased CPO consumption. There is no inducement or threat according to which those CPO volumes should be provided for less than adequate remuneration.
176The applicants’ arguments in that regard are based on a misreading of the provisional regulation. The two press articles in question seek to demonstrate, as the Commission submits in its written pleadings and in recital 153 of the provisional regulation, that the Indonesian Government proactively intervened in the CPO market in order to encourage CPO suppliers to comply with the mandate imposed on them and granted subsidies for that purpose in order to ensure that CPO producers were not negatively affected when implementing the Indonesian Government’s policy objectives. The Commission explains in that same recital that the Indonesian Government supported the CPO producers essentially for the benefit of biodiesel producers. Furthermore, those subsidies were not considered in isolation by the Commission, but as part of the set of measures through which the Indonesian Government encouraged CPO producers to sell locally at prices lower than those which they would otherwise have applied (recital 162 of the provisional regulation).
177Therefore, that complaint and, accordingly, the whole of the first part of the second plea, must be rejected.
The second part of the second plea, alleging infringement of Article 3(1)(b) of the basic regulation and manifest errors of assessment on the part of the Commission when it concluded that the Indonesian Government was supporting the income of biodiesel producers
178By the second part of the second plea, the applicants criticise the Commission for having found that there was income or price support being provided to biodiesel producers within the meaning of Article 3(1)(b) of the basic regulation.
179In that regard, it must be stated that the applicants do not dispute, in the context of this part of the plea, the existence of the measures adopted by the Indonesian Government set out by the Commission in recitals 188 to 190 of the provisional regulation, the findings of which were confirmed by recital 169 of the contested regulation, but only their classification as ‘income or price support’ within the meaning of Article 3(1)(b) of the basic regulation.
180Since that expression is not defined in the basic regulation, it must be interpreted, in accordance with the case-law cited in paragraph 113 above, in accordance with its usual meaning in everyday language, while also taking into account the context in which it occurs and the objectives of the rules of which it is part.
181The objective of Article 3 of the basic regulation is to define the concept of a ‘subsidy’ which would justify the imposition of a countervailing duty. More specifically, Article 3(1) of that regulation provides, under point (a), that a subsidy is deemed to exist if there is a ‘financial contribution’, ‘or’, under point (b), if there is ‘any form of income or price support within the meaning of Article XVI of the GATT 1994’. It follows that the objective of Article 3(1)(b) of the basic regulation is to provide for an alternative form of subsidy to that referred to in Article 3(1)(a), as is clearly indicated by the use of the coordinating conjunction which marks the alternative, ‘or’, in order to extend the scope of that provision.
182That provision is used in the context of determining whether a subsidy exists and expressly refers to Article XVI of the GATT for its interpretation, hence the EU legislature’s own intention to limit its discretion in the application of the GATT and WTO rules (see, to that effect, judgment of 16 July 2015, Commission v Rusal Armenal, C‑21/14 P, EU:C:2015:494, paragraphs 40 and 41 and the case-law cited). That article refers to ‘any subsidy, including any form of income or price support, which operates directly or indirectly to increase exports of any product from, or to reduce imports of any product into, its territory’. It follows from this that, for the purposes of that provision, ‘income or price support’ is a form of subsidy and that that provision focuses on the effects of that subsidy on exports and imports.
183According to its usual meaning in everyday language, the term ‘support’ means ‘help’, ‘protection’, ‘assistance’ or ‘back-up’ and the action of ‘supporting’ means ‘maintaining, carrying, backing up’ or ‘helping, encouraging, assisting’. It is clear from the wording of Article 3(1)(b) of the basic regulation and from Article XVI of the GATT that such action may take ‘any form’, a formulation which leaves open the ‘appearance’, ‘look’, ‘configuration’ or ‘way or manner of acting or proceeding’. Thus, the expression ‘income or price support’ must be interpreted as encompassing any act of the government which amounts, directly or indirectly, to maintaining or increasing revenue stability or prices. The reference in Article 3(1)(b) of the basic regulation to Article XVI of the GATT means that account must also be taken of the effects of that action on exports and imports.
184In the present case, in order to establish the existence of income or price support in the provisional regulation, the conclusions of which are confirmed in recital 169 of the contested regulation, the Commission found that – by means of a series of measures, namely (i) a system of restraints on the export of CPO, (ii) the de facto setting of CPO prices in the internal market at an artificially low level and (iii) direct subsidies granted to CPO producers in order to encourage them to comply with the objectives of the government, considered in the wider context of encouraging the development of the biodiesel industry, for example through mandatory blending requirements as well as the establishment of the Oil Palm Plantation Fund for the benefit of biodiesel producers – the Indonesian Government intended to intervene in the market to ensure a particular result, namely that the biodiesel producers would benefit from artificially low prices for their supply of CPO – the raw material that represents around 90% of their production costs.
185The Commission concluded, in recital 191 of the provisional regulation, that those actions of the Indonesian Government had contributed to the income received by biodiesel producers by allowing them to have access to their main raw material and main cost component at a price below the world market price, which was then translated into artificially higher profits resulting mainly from exports to third markets. The Commission also noted a significant increase in biodiesel exports in 2018, as is apparent from Table 2 set out in recital 192 of the provisional regulation. That analysis was confirmed in its entirety by the contested regulation (see recital 169 of the contested regulation).
186In the first place, the applicants claim that the interpretation of the concept of income or price support is contrary to WTO case-law, namely the findings contained in the WTO Panel report entitled ‘China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-rolled Electrical Steel from the United States’, adopted on 15 June 2012 (WT/DS 414/R). More specifically, they rely on paragraph 7.85 of that report, where it was held that ‘the term “price support” … does not include all government intervention that may have an effect on prices, such as tariffs and quantitative restrictions’, and that ‘in particular, it is not clear that Article 1.1(a)(2) was intended to capture all manner of government measures that do not otherwise constitute a financial contribution, but may have an indirect effect on a market, including on prices’.
187Without prejudice to the case-law cited in paragraphs 38 and 39 above, it should be noted that, in that case, the panel ruled on voluntary restraint agreements restricting imports of steel into the United States, which it considered had only an incidental side-effect, of random magnitude, on prices. It considered that the phrase ‘any form of … price support’ in Article 1(1.1)(a)(2) of the SCM Agreement did not have a sufficiently wide scope to encompass such agreements. Therefore, that dispute did not concern a series of measures having the same objective and nature as those examined by the contested regulation, in particular specific export restrictions and de facto price-setting through an undertaking fully owned by the Indonesian Government.
188In the second place, the applicants criticise the Commission, referring to several recitals of the provisional regulation, for having concluded, wrongly, first, that the Indonesian Government intended to promote the use of biodiesel in Indonesia by reducing CPO prices and, second, that there was a set of measures intended to support the biodiesel industry which prove the existence of income support.
189As regards the first point, it should be noted that the applicants do not call into question the evidence used by the Commission to establish the intention of the Indonesian Government to support the national biodiesel industry, but rather the fact that that evidence relates to the intention of that government to provide that support by lowering CPO prices.
190That argument is based on a misreading of the provisional regulation. First, the export tax and export duties referred to in recital 182 of the provisional regulation are among the measures which enabled the Commission to conclude that CPO suppliers were entrusted or directed to provide CPO for less than adequate remuneration (see paragraphs 121 to 132 above). The same applies to the Oil Palm Plantation Fund, referred to in recital 186 of the provisional regulation, which was financed by the export levy on CPO and its derivatives (recital 117 of the provisional regulation). Second, it is apparent from a reading of the provisional regulation that the Commission first of all established the intention of the Indonesian Government to support the national biodiesel industry, in recitals 182 to 186, before setting out, in recitals 188 to 190, the various instruments through which the Indonesian Government intervened on the CPO market in order to boost the development of the biodiesel industry.
191It is apparent from the recitals referred to in the preceding paragraph that the Commission demonstrated to the requisite legal standard the Indonesian Government’s intention to develop the biodiesel industry by intervening in the CPO market and that that argument of the applicants must be rejected.
192As regards the second point, the applicants refer, in support of their claims relating to the set of measures intended to support the biodiesel industry, to their arguments put forward in the context of the preceding part. Since the first part of the applicants’ second plea has been rejected, that argument must also be rejected.
193In the third place, the applicants argue that the Commission did not establish how that set of measures had the direct or indirect effect of increasing exports of a product originating in Indonesia or of reducing imports of such a product into its territory, as required by Article XVI of the GATT. It is apparent from the data in Table 2 in recital 192 of the provisional regulation, first, that Indonesian biodiesel exports decreased considerably between 2015 and 2018 and, second, that it is more likely that that set of measures reduced biodiesel exports, because it encouraged domestic consumption, while the measures alleged to have an impact on CPO are the same for biodiesel producers, whether or not they export.
194In that regard, first, it must be pointed out, as the Commission observed in recital 193 of the provisional regulation, that the data in Table 2 set out in recital 192 of that regulation indicate that Indonesian biodiesel exports decreased significantly in the period during which there were trade defence measures in the European Union (between November 2013 and March 2018), and then picked up again in 2018 with a 847.59% increase as compared with 2017 (see recitals 281, 282, 322 and 323 of the provisional regulation). In addition, as the Commission observes in recital 193 of that regulation, the decrease in exports during the period of application of the trade defence measures in the European Union was accompanied by an increase in stock.
195Second, as the Commission rightly points out in recital 191 of the provisional regulation, the measures put in place by the Indonesian Government allowed biodiesel producers to have access to their main raw material and main cost element at a price below the world market price, which then translates into artificially higher profits resulting mainly from exports to third markets. Moreover, the fact that the blending mandate aims to increase domestic biodiesel consumption does not call into question the conclusion that the set of measures introduced by the Indonesian Government, including the direct transfer of funds from the Oil Palm Plantation Fund, impacted biodiesel exports.
196The applicants’ arguments must therefore be rejected.
197It follows from those findings that the Commission did not infringe Article 3(1)(b) of the basic regulation and did not make a manifest error of assessment when it concluded that the measures implemented by the Indonesian Government could be classified as income or price support provided to biodiesel producers.
The third part of the second plea, alleging infringement of Article 3(2) and Article 6(d) of the basic regulation and manifest errors of assessment committed by the Commission when determining the benefit conferred on biodiesel producers
198By the third part of the second plea, the applicants claim that, in finding that there was a benefit and in using incorrect reference prices for the calculation of that benefit, the Commission infringed Article 3(2) and Article 6(d) of the basic regulation.
199In that regard, it should be noted that Article 3 of the basic regulation provides that a subsidy is deemed to exist where there is a ‘financial contribution’ or ‘income or price support’ provided by a government and if a ‘benefit’ is thereby conferred. Articles 6 and 7 of that regulation lay down the procedures for calculating the ‘benefit’ conferred. As regards a financial contribution or income or price support consisting in the provision of goods by a government, Article 6(d) of the basic regulation provides, in essence, that that provision confers a benefit if it is made for less than adequate remuneration (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraphs 195 and 196).
200Article 6 of that regulation lays down rules for determining, according to the type of measure concerned, whether it may be regarded as a ‘benefit conferred on the recipient’. In accordance with those rules, a benefit exists if, in practice, the recipient received a financial contribution enabling it to obtain more favourable conditions than those to which it would have access on the market. As regards, in particular, the supply of goods, Article 6(d) of the basic regulation provides that there is a benefit only if ‘the provision is made for less than adequate remuneration’, ‘the adequacy of remuneration [being] determined in relation to prevailing market conditions for the product or service in question in the country of provision or purchase, including price, quality, availability, marketability, transportation and other conditions of purchase or sale’. It follows from that wording that the determination of the ‘benefit’ involves a comparison and that, since it aims to assess the appropriateness of the price paid as against normal market conditions, in principle in the country of provision, that comparison must take into account all the elements of the cost to the recipient of receiving the goods provided by the government. Therefore, it follows from that provision that, as far as possible, the method used by the Commission to calculate the advantage must make it possible to reflect the benefit actually conferred on the recipient (see, to that effect, judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraphs 208 to 210).
201In the present case, it is apparent from recitals 170 and 171 of the contested regulation that the Commission determined the existence of a benefit by using as the benchmark price for the purposes of the comparison the free on board (FOB) CPO export prices from Indonesia to the rest of the world, as found in the Indonesia Export Statistics, and that it calculated the benefit conferred on the recipient as being the sum of the differences between those benchmark prices of CPO calculated per month during the investigation period and the prices paid for domestically purchased CPO.
202The applicants submit that, in order to determine the benefit conferred on biodiesel producers, the Commission adopted an incorrect benchmark in order to conclude that CPO was provided for less than adequate remuneration on the Indonesian market.
203In the first place, the applicants claim that the Commission should have used as a benchmark, for the purpose of analysing the adequacy of remuneration, the prices charged in the country, which were determined by the market.
204However, the Commission found – and the applicants’ arguments seeking to invalidate its findings have already been rejected in the context of the first part of this plea – that CPO prices on the Indonesian market were set by PTPN and that the ‘price idea’ proposed by PTPN did not reflect a market price resulting from a competitive tendering process (recitals 124 and 148 of the contested regulation).
205Therefore, in the light of the market distortion resulting from the intervention of the Indonesian Government (recital 198 of the provisional regulation), the Commission was entitled to take the view, in recital 197 of the provisional regulation, that the CPO purchase price had to be compared with an appropriate benchmark under Article 6(d) of the basic regulation, with the result that the applicants’ argument must be rejected.
206In the second place, the applicants claim that the Commission was wrong to compare CPO prices on the Indonesian domestic market with Malaysian domestic prices and Indonesian export prices. In particular, they claim that the FOB export prices included the export levy, which was not due on domestic transactions. Moreover, the Commission should have made adjustments to the benchmark prices in order to ensure that the benchmark used reflected the conditions under which CPO would be traded, under market conditions.
207First of all, it is apparent both from recital 182 of the contested regulation and from recital 198 of the provisional regulation that the Commission did not use Malaysian prices as a reference price in order to determine the amount of the benefit in question. The fact that, as the applicants point out, the Commission compared, in another part of the provisional regulation (recital 163), the Indonesian domestic prices of CPO with the Malaysian prices in order to reach the conclusion that the price set by PTPN was unfair and that prices on the domestic market in Indonesia were lower than the market price, is irrelevant in the context of the determination of the benefit conferred on biodiesel producers. The applicants’ claim in that regard must therefore be rejected.
208Next, it is apparent from recital 198 of the provisional regulation that the Commission considered that the FOB CPO export prices from Indonesia to the rest of the world constituted an appropriate benchmark, since they were set according to free market principles, reflected prevailing market conditions in Indonesia, were not distorted by government intervention and, therefore, were the best indicator of what the Indonesian domestic price would have been in the absence of the distortion caused by the intervention of the Indonesian Government. Against that analysis, the applicants claim that, even if the CPO prices on the Indonesian domestic market were distorted, the FOB export price is not a valid benchmark, since it is itself distorted by the export restraints.
209That argument must be rejected. The fact that the FOB CPO export price from Indonesia includes the effects of the export levy, as stated by the Commission in recitals 173 and 181 of the contested regulation, does not mean that that price is distorted. On the contrary, given that the price of CPO on the domestic market was less than adequate, because of a series of measures including the export tax, the export levy and the setting of prices by PTPN, the CPO export price, once the export levy had been paid, corresponded, as the Commission rightly points out, to the export price that was offered by sellers. Although the export levy is one of the measures which have the effect of inducing CPO suppliers to sell on the domestic market at less than adequate prices, it does not render the FOB export price inappropriate as the benchmark price for calculating the benefit. As the Commission rightly considered, that price made it possible, in accordance with the rule laid down in Article 6(d) of the basic regulation and the case-law cited in paragraph 200 above, to reflect, as far as possible, the benefit actually conferred on the recipient.
210Lastly, the applicants’ argument that the Commission should have made adjustments to the benchmark price must also be rejected. First, the applicants’ claim that the export levy should have been deducted has already been rejected in the preceding paragraph. Second, even if the applicants claim that other adjustments to the reference price were necessary, they have failed to adduce sufficient evidence to show what those adjustments are and why they were necessary. Such evidence is, however, necessary in order to establish that an EU institution has committed a manifest error of assessment such as to justify the annulment of a measure (see, to that effect, judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T‑444/11, EU:T:2014:773, paragraph 62).
211In the third place, the applicants invoke, in support of their line of argument, the WTO Appellate Body report entitled ‘United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India’ adopted on 8 December 2014 (WT/DS 436/AB/R), in which it is held, in paragraphs 4.148 and 4.151, that ‘a determination of whether remuneration is “less than adequate” within the meaning of Article 14(d) involves the selection of a comparator – i.e. a benchmark price – with which to compare the government price for the good in question’ and that benchmark ‘must consist of market-determined prices for the same or similar goods that relate or refer to, or are connected with, the prevailing market conditions for the good in question in the country of provision’. It must be held, without prejudice to the case-law cited in paragraphs 38 and 39 above, that the findings thus made in that report do not call into question the Commission’s analysis set out in paragraphs 201, 205 and 208 above, which also refers to a market price available for the same product, especially in the light of the finding set out in paragraph 4.155 of that report that ‘although the benchmark analysis begins with a consideration of in-country prices for the good in question, it would not be appropriate to rely on such prices when they are not market determined’.
212Therefore, that argument must be rejected as must, accordingly, the whole of the third part of the second plea.
213In the light of those considerations, the second plea in law must be rejected in its entirety.
The third plea in law, alleging infringement of Article 8(8) of the basic regulation and a manifest error of assessment on the part of the Commission in finding that there was a threat of material injury to the Union industry
214By the third plea, the applicants claim that the Commission infringed Article 8(8) of the basic regulation and made a manifest error of assessment in finding that there was a threat of material injury to the Union industry on the basis of the incorrect premiss that the Union industry was in a fragile situation.
215The Commission, supported by EBB, disputes that plea.
216In the present case, the Commission found, in recitals 319 and 320 of the contested regulation, that the Union industry had not suffered material injury during the investigation period, even though that industry was not robust. However, it considered that there was, in the present case, a threat of material injury to that industry.
217As a preliminary point, it should be recalled, in that regard, that Article 2(d) of the basic regulation defines the term ‘injury’ as meaning, unless otherwise specified, inter alia, material injury to the Union industry or threat of material injury to the Union industry, and that it refers to the provisions of Article 8 for the interpretation of that concept.
218Article 8(1) of the basic regulation governs the determination of injury. Such determination is to involve an objective examination of the volume of the subsidised imports and the effect of the subsidised imports on prices in the Union market for like products as well as the consequent impact of those imports on the Union industry.
219Article 8(4) of the basic regulation provides that the examination of the impact of the subsidised imports on the Union industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including the fact that an industry is still in the process of recovering from the effects of past subsidisation or dumping.
220Article 8(5) of the basic regulation states that it must be demonstrated, from all the relevant evidence relating to the situation of the Union industry, that that industry is suffering injury. In particular, that provision provides that such proof is to entail a demonstration that the volume and/or price levels identified pursuant to paragraph 2 are responsible for an impact on the Union industry as provided for in paragraph 4, and that that impact exists to a degree which enables it to be classified as material (see, to that effect and by analogy, judgment of 19 December 2013, Transnational Company “Kazchrome” and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 49).
221Article 8(8) of the basic regulation governs the ‘determination of a threat of material injury’. It is specified that that determination is to be based on facts and not merely on allegations, conjecture or remote possibility and that the change in circumstances which would create a situation in which the subsidy would cause injury must have been clearly foreseen and must be imminent. It follows that the determination of a threat of injury must be clearly apparent from the circumstances of the case. It also follows that the injury threatened must be impending (see, by analogy, judgment of 29 January 2014, Hubei Xinyegang Steel v Council, T‑528/09, EU:T:2014:35, paragraph 54).
222That provision sets out a non-exhaustive list of the factors to be taken into consideration in determining whether there is a threat of material injury (see, by analogy, Opinion of Advocate General Mengozzi in Joined Cases ArcelorMittal Tubular Products Ostrava and Others v Council and Council v Hubei Xinyegang Steel, C‑186/14 P and C‑193/14 P, EU:C:2015:767, point 44).
223In addition, the Court of Justice has already stated that the existence of a threat of injury, like that of an injury, must be established as at the date of the adoption of the anti-subsidy measure, having regard to the situation of the Union industry at that time. It is only in view of that situation that the EU institutions can determine whether the imminent increase in future subsidised imports will cause material injury to that industry if no trade defence measure is taken. However, the EU institutions are entitled, in certain circumstances, to take post-investigation period data into consideration (see, by analogy, judgment of 4 February 2021, eurocylinder systems, C‑324/19, EU:C:2021:94, paragraphs 40 and 41).
224It must also be borne in mind that, in accordance with the case-law cited in paragraph 26 above, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the EU institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine. In that respect it must be observed that the examination of a threat of injury involves the assessment of complex economic matters and that the judicial review of such an appraisal must therefore be limited to verifying whether the procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated, and whether there have been manifest errors in the assessment of those facts or a misuse of powers. That limited judicial review does not mean that the EU judicature must refrain from reviewing the institutions’ interpretation of information of an economic nature (see, by analogy, judgment of 29 January 2014, Hubei Xinyegang Steel v Council, T‑528/09, EU:T:2014:35, paragraph 53 and, to that effect, judgment of 19 May 2021, China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Others v Commission, T‑254/18, under appeal, EU:T:2021:278, paragraph 149). In particular, it is for the General Court not only to establish whether the evidence put forward is factually accurate, reliable and consistent but also to ascertain whether that evidence contained all the relevant information which had to be taken into account in order to assess a complex situation and whether it was capable of substantiating the conclusions reached (see, by analogy, judgment of 18 October 2018, Gul Ahmed Textile Mills v Council, C‑100/17 P, EU:C:2018:842, paragraph 64).
225Lastly, the Commission’s conclusion as to the situation of the Union industry, established in the context of the analysis of material injury caused to a Union industry, for the purposes of Article 8(4) of the basic regulation, remains, in principle, relevant in the analysis of the threat of material injury to that industry, within the meaning of Article 8(8) of that regulation (see, by analogy, judgment of 4 February 2021, eurocylinder systems, C‑324/19, EU:C:2021:94, paragraph 42).
226It is in the light of those principles that the Court must examine whether the Commission infringed Article 8(8) of the basic regulation when it concluded, in recital 360 of the provisional regulation, confirmed in recital 405 of the contested regulation, that the fragile economic condition of the Union industry was likely to be aggravated by the imminent and continuing subsidised imports of biodiesel from Indonesia, which, during the investigation period, constituted a threat of material injury to the Union industry.
227The Commission submits that, even if it had erred in finding that the Union industry was fragile, it could, in any event, consider that the situation of the Union industry was likely to change in the near future resulting in material injury. In those circumstances, the applicants’ third plea, which does not call into question that part of the analysis of the threat of material injury, should, in any event, be rejected.
228It should be borne in mind that, although Article 8(1) of the basic regulation requires that ‘a determination of injury’ is to involve inter alia an objective examination of the impact of the subsidised imports on the Union industry, an examination that includes, according to Article 8(4) of the basic regulation, the evaluation of all relevant factors and indices having a bearing on the state of the Union industry, such an examination is not explicitly required by the basic regulation in relation to an analysis of a threat of injury within the meaning of Article 8(8) of that regulation. However, an examination of all the relevant factors and indices having a bearing on the state of the Union industry in the context of a threat of injury appears to be necessary, since it establishes the situation of the Union industry in the light of which the institutions can evaluate, as required by Article 8(8) of the basic regulation, whether, where further imports are imminent, the threat of material injury to the Union industry would be transformed into material injury if protective action were not taken. In other words, in order for the institutions to be able to determine whether there is a threat of material injury to the Union industry, when, by definition, that industry is not suffering present material injury in spite of the effects of the imports that are subsidised during the investigation period, it is necessary to know the present situation of that industry (see, to that effect and by analogy, judgment of 7 April 2016, ArcelorMittal Tubular Products Ostrava and Others v Hubei Xinyegang Steel, C‑186/14 P and C‑193/14 P, EU:C:2016:209, paragraph 31, and Opinion of Advocate General Mengozzi in Joined Cases ArcelorMittal Tubular Products Ostrava and Others v Council and Council v Hubei Xinyegang Steel, C‑186/14 P and C‑193/14 P, EU:C:2015:767, points 43 to 48).
229In the present case, as the applicants rightly point out, it is apparent from recital 360 of the provisional regulation that the state of the Union industry was taken into account in order to conclude that there was a threat of injury. Thus, the Commission’s conclusion as regards the Union industry is not irrelevant to the analysis of the threat of injury (see, to that effect and by analogy, judgment of 29 January 2014, Hubei Xinyegang Steel v Council, T‑528/09, EU:T:2014:35, paragraph 58). The third plea is therefore capable, if upheld, of calling into question the validity of the Commission’s conclusion regarding the threat of material injury.
230The Commission’s argument set out in paragraph 227 above must therefore be rejected and the applicants’ third plea must be assessed.
231The applicants claim that the analysis of the European Union’s economic indicators do not reveal that the Union industry is in a fragile economic condition. All factors, with the exception of market shares, improved between 2015 and the investigation period and there was only a very slight decline in sales between the full year 2017 and the investigation period. In support of their claims the applicants submitted to the Court a table showing their analysis of the data representative of the economic situation of the Union industry taken into account by the Commission in the provisional regulation.
232As a preliminary point, it should be noted that the applicants’ observations take into account the data provided by the Commission which concern not only the investigation period but also the whole of the ‘period considered’, that is to say, the period from 1 January 2015 to the end of the investigation period (recital 13 of the provisional regulation). According to the case-law, the idea which underlies setting a ‘period considered’ is to enable the Commission to examine a period longer than that covered by the investigation proper, so that it may base its analysis on actual or potential trends, which, in order to be capable of being identified, require a sufficiently long period of time (see, to that effect and by analogy, judgments of 7 May 1991, Nakajima v Council, C‑69/89, EU:C:1991:186, paragraph 87, and of 19 May 2021, China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Others v Commission, T‑254/18, EU:T:2021:278, paragraph 337).
233In order to reach the conclusion that the Union industry was not robust during the investigation period, the Commission took into consideration, in recitals 309 to 340 of the provisional regulation, a number of microeconomic and macroeconomic indicators, and confirmed that analysis in recitals 279 to 317 of the contested regulation, in which it also examined, in recitals 321 to 341, economic indicators relating to after the investigation period.
234In the first place, as regards the macroeconomic indicators, first, the applicants submit that EU production, production capacity and capacity utilisation increased between 2015 and the investigation period.
235In that regard, it should be observed that it is apparent from Table 3 set out in recital 268 of the provisional regulation that, after an increase between 2015 and 2017, EU production remained almost stable between 2017 and the investigation period (a slight increase from 13071053 tonnes to 13140582 tonnes for a stable index of 111), whereas EU consumption increased, as is apparent from Table 4 set out in recital 271 of the provisional regulation (from 14202128 tonnes to 15634102 tonnes, an increase of 10.08%). It follows that EU production did not follow the increase in EU consumption and therefore in demand. Moreover, it is apparent from Table 8 set out in recital 309 of the provisional regulation that EU production capacity increased slightly between 2015 and 2016 (from 16009878 tonnes to 16561814 tonnes) and between 2017 and the investigation period (from 16594853 tonnes to 17031230 tonnes), while the use of that capacity, after increasing in 2015, 2016 and 2017, fell slightly between 2017 and the investigation period.
236On the basis of those data, the Commission found, in recital 310 of the provisional regulation, that the increase in the Union industry’s production capacity was significantly lower than the increase in demand, since that industry had been able to benefit from market growth only to a very limited extent due to the significant increase in subsidised imports, in particular during the investigation period.
237Since that finding corresponds to the data analysed and is capable of substantiating the conclusion that the Union industry was in a fragile situation, the applicants’ first argument must be rejected.
238Second, the applicants claim that the volume of sales increased.
239However, it is clear from Table 9 set out in recital 314 of the provisional regulation that, although the Union market sales volume increased between 2015 and 2017, those sales decreased between 2017 and the investigation period, a period which corresponds, as the Commission observes in recital 317 of the provisional regulation, to the removal of duties on imports from Indonesia. The applicants’ argument in that regard must therefore be rejected.
240Third, the applicants submit that the Union industry retained a high market share of between 81% and 95%.
241However, it must be stated that it is apparent from Table 9 set out in recital 314 of the provisional regulation that the Union industry’s market share decreased significantly between 2017 and the investigation period (from 91.6% to 81.5%). The Commission explains, in recital 317 of that regulation, and the applicants do not validly challenge that point by their line of argument based on the role of the imports from Argentina (see paragraphs 285 to 293 below), that that decrease is due to the removal of duties on imports from Indonesia which changed the market situation in March 2018, during the investigation period. In the light of those data, the applicants’ argument in that regard must be rejected.
242Fourth, the applicants argue that employment and productivity display positive trends.
243It is apparent from Table 10 set out in recital 319 of the provisional regulation that the number of employees of the Union industry increased slightly between 2015 and the investigation period (by 78 employees). However, productivity decreased between 2017 and the investigation period (from 4782 tonnes per employee to 4625 tonnes per employee). It follows that the slight increase in the number of employees is not in itself sufficient to invalidate the Commission’s conclusions drawn from all the macroeconomic indicators. According to the case-law, although the examination by the institutions must lead to the conclusion that the threat of injury is significant, it is not necessary for all the relevant economic factors and indices to show a negative trend (see, to that effect and by analogy, judgment of 23 April 2018, Shanxi Taigang Stainless Steel v Commission, T‑675/15, not published, EU:T:2018:209, paragraph 93 and the case-law cited).
244It follows that the applicants’ arguments in that regard must be rejected.
245In the second place, as regards the microeconomic indicators, first, the applicants submit that the sale prices in the European Union increased and the production costs evolved similarly.
246It is clear from Table 11 set out in recital 325 of the provisional regulation that, after increasing between 2015 and 2017, the period during which there were duties on imports from Indonesia, prices went from EUR 832 per tonne to EUR 794 per tonne between 2017 and the investigation period. It is also apparent from Table 11 set out in recital 325 of the provisional regulation that production costs decreased from EUR 827 per tonne to EUR 791 per tonne between 2017 and the investigation period. However, it is apparent from all the data in that table, in particular the decrease in the sales price, that the Union industry was unable to benefit from that decrease in costs, since it had to pass on that decrease in full to its customers, as the Commission correctly observes in recital 328 of the provisional regulation. The applicants’ argument in that regard must therefore be rejected.
247Second, the applicants submit that average labour costs per employee increased.
248However, it is apparent from Table 12 set out in recital 330 of the provisional regulation that those costs, after having fallen considerably between 2015 and 2016, remained fairly stable between 2016 and the investigation period. Accordingly, the applicants’ argument in that regard must be rejected.
249Third, the applicants maintain that cash flow, sales profitability and return on investments showed positive trends.
250In that regard, it must be stated that it is apparent from Table 14 set out in recital 334 of the provisional regulation that cash flow increased between 2015 and 2017 (with a sharp increase between 2016 and 2017) and then fell back to 2016 levels. It is therefore not possible to infer a positive trend, contrary to what the applicants claim.
251The return on investments increased considerably between 2015 and 2016 and then remained relatively stable (18% in 2016, 16% in 2017 and 17% during the investigation period). Those trends, and the stabilisation of the profitability of sales in the European Union to unrelated customers at 0.8% in 2017 and during the investigation period, do not call into question the Commission’s findings as to the overall situation of the Union industry. As the Commission claimed at the hearing, that rate of profitability is low and is not sufficient to ensure the survival of an industry in the long term.
252The applicants also contest the conclusions drawn by the Commission from the figures relating to the period following the investigation period.
253In that regard, it should be borne in mind that, according to the case-law, the possibility of taking into consideration, in certain circumstances, post-investigation period data is justified in the context of investigations intended, not to find injury, but to determine whether there is a threat of injury which, by its very nature, requires a prospective analysis. Those data may thus be used to confirm or invalidate the forecasts in the Commission regulation imposing a provisional countervailing duty and allow, in the former case, the imposition of a definitive countervailing duty. However, the EU institutions’ use of those data regarding the period following the investigation period cannot escape review by the Courts of the European Union (see, by analogy, judgment of 4 February 2021, eurocylinder systems, C‑324/19, EU:C:2021:94, paragraph 41).
254In the present case, the Commission examined, in recitals 321 to 341 of the contested regulation, the data relating to the period from October 2018 to June 2019 (‘the post-investigation period’) and concluded that, during the post-investigation period, the economic situation of the Union industry had further deteriorated.
255The applicants claim that, although the information is incomplete, it seems that (i) sales and capacity utilisation remained stable and (ii) as production costs decreased more significantly than unit sales prices, profitability improved.
256It must be stated that it is apparent from Table 2 set out in recital 325 of the contested regulation, the data of which are not contested by the applicants, that both the production of the Union industry and sales decreased between the investigation period and the post-investigation period (respectively from 2510356 tonnes to 1824599 tonnes and from 2524646 tonnes to 1871962 tonnes). The capacity utilisation rate also slightly decreased (from 82% to 80%). In addition, although it is true that the unit cost of production decreased from EUR 791 per tonne to EUR 760 per tonne, the unit sales price also decreased by EUR 4 per tonne. That decrease nuances the slight improvement in profitability observed which cannot call into question the Commission’s conclusions regarding the situation of the Union industry which are based on all the relevant factors in that regard.
257Therefore the applicants’ arguments seeking to invalidate the analysis of the situation of the Union industry must be rejected, as must, accordingly, the third plea in law.
The fourth plea in law, alleging infringement of Article 8(5) and (6) of the basic regulation and a manifest error of assessment on the part of the Commission in finding that imports from Indonesia were threatening to cause injury to the Union industry and in ignoring the impact of imports from Argentina
258The fourth plea consists of two parts, which are disputed by the Commission, supported by EBB.
259As a preliminary point, it should be borne in mind that, according to the case-law, in accordance with Article 1(1) and Article 8(5) of the basic regulation, the existence of a causal link between the subsidised imports and the injury to the Union industry is a necessary condition for the imposition of a countervailing duty (judgment of 10 April 2019, Jindal Saw and Jindal Saw Italia v Commission, T‑300/16, EU:T:2019:235, paragraph 257). The same principle applies where the definitive countervailing duty is based on the existence of a threat of material injury to the Union industry.
260Pursuant to Article 8(5) and (6) of the basic regulation, the institutions are, first, under an obligation to consider whether the injury on which they intend to base their conclusions actually derives from the subsidised imports. That is what is known as the ‘attribution analysis’. Second, they must disregard any injury deriving from other factors, in order to ensure that the injury caused by those other factors is not attributed to those imports. That is what is known as the ‘non-attribution analysis’ (see, by analogy, judgment of 28 February 2017, Yingli Energy (China) and Others v Council, T‑160/14, not published, EU:T:2017:125, paragraph 189 and the case-law cited).
261Those provisions do not place an obligation on the institutions regarding the form of the attribution and non‑attribution analyses which they must carry out, or the order in which they must carry them out. By contrast, they provide that those analyses must be carried out in such a way as to enable the injurious effects of the subsidised imports to be separated and distinguished from the injurious effects caused by other factors (see, by analogy, judgment of 25 October 2011, Transnational Company “Kazchrome” and ENRC Marketing v Council, T‑192/08, EU:T:2011:619, paragraph 38).
262As the Courts of the European Union have already held, the objective of Article 8(5) and (6) of the basic regulation is, first, to ensure that the EU institutions separate and distinguish the injurious effects of the subsidised imports from the injurious effects of other known factors, since if they do not separate and distinguish the impact of the various factors, they cannot legitimately conclude that dumped imports caused injury to the Union industry. The purpose of those rules is, second, to avoid granting the Union industry protection beyond that which is necessary (see, to that effect and by analogy, judgments of 3 September 2009, Moser Baer India v Council, C‑535/06 P, EU:C:2009:498, paragraph 90; of 19 December 2013, Transnational Company “Kazchrome” and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 39; and of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 63).
263In addition, the broad discretion enjoyed by the EU institutions in the sphere of the common commercial policy, and most particularly, in the realm of measures to protect trade, in accordance with the case-law cited in paragraph 26 above, covers, in particular, all the conditions for determining the injury caused to the Union industry in an anti-subsidy proceeding, including the causal link, and, therefore, it is for the applicants to adduce evidence enabling the Court to find that the Commission made a manifest error of assessment when determining the injury and the causes of the injury (see, to that effect and by analogy, judgment of 11 September 2014, Gold East Paper and Gold Huasheng Paper v Council, T‑443/11, EU:T:2014:774, paragraphs 323 to 325).
264By the first part of the fourth plea, the applicants contest the attribution analysis carried out by the Commission in recitals 406 to 415 of the contested regulation. By the second part, they criticise the non-attribution analysis carried out in paragraph 416 et seq. of the same regulation.
The first part of the fourth plea, alleging infringement of Article 8(5) of the basic regulation and manifest errors of assessment on the part of the Commission in finding that imports from Indonesia threatened to cause injury
265By the first part of their fourth plea, the applicants claim that the Commission failed to demonstrate that there was a causal link between the imports of biodiesel from Indonesia and the threat of material injury to the Union industry.
266In that regard, it should be pointed out that determining the effect of subsidised imports on prices in the Union market for like products, under Article 8(1) of the basic regulation, is an exercise different from that intended to establish the existence of a causal link between the subsidised imports and the injury suffered by the Union industry, referred to in Article 8(5) of the basic regulation. The determination provided for in Article 8(1) of the basic regulation is intended to establish the effects of the subsidised imports on prices in the Union market for like products. That determination involves an examination of the relationship between the prices of the subsidised imports and those of like products of the Union industry. The determination provided for in Article 8(5) of the basic regulation, for its part, is intended to establish the link between the subsidised imports and the injury, considered as a whole, of the Union industry. However, even though those two determinations differ in their purpose, the evidence of the existence of injury, including the evidence relating to the effect of imports on prices in the Union market for like products, is taken into account in the Commission’s analysis of the causal link, which is referred to in Article 8(5) of the basic regulation. Thus there is a relationship between, on the one hand, the determination of price undercutting and, more generally, the effect of the subsidised imports on prices in the Union market for like products, and, on the other hand, the establishment of a causal link under Article 8(5) of the basic regulation (see, to that effect and by analogy, judgments of 30 November 2011, Transnational Company “Kazchrome” and ENRC Marketing v Council and Commission, T‑107/08, EU:T:2011:704, paragraph 59, and of 19 May 2021, China Chamber of Commerce for Import and Export of Machinery and Electronic Products and Others v Commission, T‑254/18, EU:T:2021:278, paragraph 363).
267In the present case, the Commission took into account for the purpose of establishing a causal link, in recital 361 of the provisional regulation, the increase in imports from Indonesia during the investigation period, the fact that biodiesel from Indonesia was undercutting prices and that those imports had depressed the Union industry prices. It observed, in recital 362 of the provisional regulation and in recital 407 of the contested regulation that that situation had led to a loss of market share for the Union industry despite increases in production and capacity and that it had not been able to improve its unsatisfactory profit margin in an otherwise favourable market situation. The Commission thus concluded, in recital 365 of the provisional regulation, confirmed by recital 415 of the contested regulation, that the subsidised imports of Indonesian biodiesel were causing a threat of material injury to the Union industry.
268As a preliminary point, it is necessary to reject the applicants’ claim that imports from Indonesia were not a cause of the Union industry’s vulnerability and, accordingly, that those imports could not threaten to cause injury to that industry. As the Commission rightly points out, the relevant inquiry in the present case is not whether the imports from Indonesia are a cause of the delicate situation of the Union industry, but whether those imports constitute a threat of material injury in the imminent future.
269In the first place, the applicants claim that it is apparent from the data presented in the tables set out in the provisional regulation that the increase in market shares of Indonesian imports between 2017 and the investigation period, which was the logical consequence of the annulment of the anti-dumping measures found to be unlawful that had blocked Indonesian imports (see paragraphs 3 to 6 above), was less significant than the loss of market shares by the Union industry, which means that Indonesian imports simply filled a gap that was not satisfied by the Union industry and did not justify the loss of market shares by the Union industry.
270In that regard, it must be stated that the applicants do not call into question the data used by the Commission to arrive at its conclusions. It is thus common ground between the parties that Union industry production increased slightly between 2017 and the investigation period, from 13071053 tonnes to 13140852 tonnes (Table 3 set out in recital 268 of the provisional regulation), while EU consumption increased more significantly over the same period, from 14202128 tonnes to 15634102 tonnes (Table 4 set out in recital 271 of the provisional regulation). During the same period, imports from Indonesia increased from 24984 tonnes to 516088 tonnes (Table 5 set out in recital 280 of the provisional regulation), that being an increase of 1 965.67% or of 491104 tonnes, and the sales volume of the Union industry on the Union market fell from 13004462 tonnes to 12741791 tonnes (Table 9 set out in recital 314 of the provisional regulation), that being a decrease of 262671 tonnes. In addition, during the same period, the Union industry used only 77% of its production capacity (Table 8 set out in recital 309 of the provisional regulation).
271It is clear from the data set out in the previous paragraph that, despite an increase in consumption, and thus of demand, on the Union market, Union industry sales on the same market decreased despite significant spare production capacity, whereas, at the same time, imports from Indonesia increased by 1 965.67%. Accordingly, the Commission did not make a manifest error of assessment, within the meaning of the case-law cited in paragraph 263 above, when it concluded, in recital 407 of the contested regulation, that the increase in imports during the investigation period and the undercutting and depression of Union industry prices by the subsidised imports caused the Union industry to lose market share despite increases in production and capacity, and prevented the Union industry from benefiting from an otherwise favourable market situation.
272The applicants claim that imports from Indonesia will not increase further in the future. First, demand for biodiesel with a high CFPP is limited. Second, two texts recently adopted will limit use of PME in the European Union: Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ 2018 L 328, p. 82) and Commission Delegated Regulation (EU) 2019/807 of 13 March 2019 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council as regards the determination of high indirect land-use change-risk feedstock for which a significant expansion of the production area into land with high carbon stock is observed and the certification of low indirect land-use change-risk biofuels, bioliquids and biomass fuels (OJ 2019 L 133, p. 1).
273First, as the Commission rightly points out, the applicants have not challenged its conclusions on the competitive relationship between EU-produced biodiesel and biodiesel from Indonesia and the fact that the latter exerts a pressure on prices (recital 254 of the contested regulation). In addition, as is apparent from Table 4 set out in recital 353 of the contested regulation, there was a greater volume of imports from Indonesia during the three quarters of the post-investigation period than during the four quarters of the investigation period.
274Second, the Commission considered, correctly, in recital 360 of the contested regulation, that the effect of Directive 2018/2001 could not be forecast and ‘does not affect the current analysis of threat of injury that Indonesian imports pose to the Union industry in the near future’. It must be stated that that directive was adopted after the investigation period and that its time limit for transposition only expired on 30 June 2021, in accordance with Article 36(1) thereof. Further, pursuant to Article 26(2) of that directive, the full restriction on the import of ‘high indirect land-use change-risk biofuels, bioliquids or biomass fuels produced from food and feed crops for which a significant expansion of the production area into land with high-carbon stock is observed’ will be gradual as from 31 December 2023, in accordance with Article 26(2) of that directive.
275In the second place, the applicants maintain that the Commission did not establish a link between the increase in imports from Indonesia and the profitability issues of the Union industry. In their view, it is clear from the data presented in the tables set out in the provisional regulation that the profitability of the Union industry remained positive during the investigation period and that there is no correlation between the imports from Indonesia and the profitability of the Union industry. The data from the post-investigation period confirm that lack of correlation.
276It is apparent from Table 14, set out in recital 334 of the provisional regulation, that the profitability of the Union industry remained stable during the investigation period (at 0.8%). However, as is apparent from Table 3 set out in recital 329 of the contested regulation, during the post-investigation period and after profitability increased to 10.8% in the fourth quarter of 2018, profitability fell to below investigation-period levels, even to negative levels (– 5%) for the second quarter of 2019. It is also apparent from Table 4 set out in recital 353 of the contested regulation that imports from Indonesia were higher in the first and second quarters of 2019 than in the fourth quarter of 2018 during which the profitability of the Union industry had increased.
277Accordingly, the Commission did not make a manifest error of assessment in finding that there was a causal link between the imports of biodiesel from Indonesia and a threat of material injury to the Union industry.
278The first part of the fourth plea must thus be rejected.
The second part of the fourth plea, alleging infringement of Article 8(6) of the basic regulation and manifest errors of assessment in the analysis of the impact of imports of biodiesel from Argentina
279By the second part of their fourth plea, the applicants claim that the Commission failed to take into account in its non-attribution analysis the threat of injury caused by imports of biodiesel from Argentina which were subject to Commission Implementing Regulation (EU) 2019/244 of 11 February 2019 imposing a definitive countervailing duty on imports of biodiesel originating in Argentina (OJ 2019 L 40, p. 1).
280In that regard, it should be borne in mind that, as is apparent from paragraph 260 above, in the context of the non-attribution analysis provided for in Article 8(6) of the basic regulation, the Commission must disregard any injury resulting from other factors, in order to ensure that the injury caused by those other factors is not attributed to the subsidised imports.
281To that end, it is for the Commission to ascertain that the effects of those other factors were not capable of breaking the causal link between the imports concerned and the injury suffered by the Union industry. It is also for the Commission to verify that the injury attributable to those other factors is not taken into account in the determination of injury because, even if another factor is not capable of breaking the causal link between the imports examined and the injury suffered by the Union industry, it may cause the Union industry separate injury. However, if the Commission finds that, in spite of such factors, the injury caused by the subsidised imports is material, the causal link between those imports and the injury suffered by the Union industry can consequently be established (see, to that effect and by analogy, judgments of 4 February 2016, C & J Clark International and Puma, C‑659/13 and C‑34/14, EU:C:2016:74, paragraph 169 and the case-law cited, and of 28 February 2017, Canadian Solar Emea and Others v Council, T‑162/14, not published, EU:T:2017:124, paragraphs 182 to 185 and the case-law cited).
282In addition, according to the case-law, the Commission may attribute responsibility for injury to the subsidised imports, even if their effects are only part of wider injury attributable to other factors. It is possible to impose countervailing duties even if they leave intact problems posed for the Union industry by other factors (see, to that effect and by analogy, judgments of 5 October 1988, Canon and Others v Council, 277/85 and 300/85, EU:C:1988:467, paragraphs 62 and 63; of 29 January 1998, Sinochem v Council, T‑97/95, EU:T:1998:9, paragraphs 99 to 103; and of 28 February 2017, Yingli Energy (China) and Others v Council, T‑160/14, not published, EU:T:2017:125, paragraph 192). Thus in order for a causal link to exist between the subsidised imports and the injury, or the threat of material injury to the Union industry, within the meaning of the provisions of the basic regulation, it is not necessary for the subsidised imports to be the sole cause of that injury.
283In this context it is not necessary for the precise effects of the factor at issue to be set out, or quantified or monetised (see, to that effect, judgment of 28 February 2017, Yingli Energy (China) and Others v Council, T‑160/14, not published, EU:T:2017:125, paragraph 195; see also, by analogy, judgment of 4 October 2006, Moser Baer India v Council, T‑300/03, EU:T:2006:289, paragraph 269).
284It is also important to note that it is for the parties pleading the illegality of the regulation at issue to adduce evidence to show that those factors could have had such an impact that the existence of injury caused to the Union industry and of the causal link between that injury and the dumped or subsidised imports are not established and must, accordingly, be called into question (see, to that effect and by analogy, judgments of 28 November 2013, CHEMK and KF v Council, C‑13/12 P, not published, EU:C:2013:780, paragraph 75, of 19 December 2013, Transnational Company “Kazchrome” and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 28).
285In the present case, the Commission, contrary to what is claimed by the applicants, did assess the effects of other factors liable to cause injury to the Union industry in recitals 416 to 460 of the contested regulation. In that respect, it assessed, in particular, in recitals 416 to 420 of the contested regulation and recitals 368 to 370 of the provisional regulation, the effects of imports of biodiesel from Argentina.
286More specifically, the Commission observed, in recital 368 of the provisional regulation, that imports from Argentina had achieved a market share of 2.8% in 2017, which increased to almost 10% during the investigation period, but that they had been subject to an investigation which had resulted in the imposition of a definitive countervailing duty and the acceptance of undertaking offers in February 2019. It therefore concluded, in recitals 417 and 418 of the contested regulation, that Argentinian imports were part of a threat of injury to the Union industry during the investigation period, which is why the Commission imposed measures on those imports in February 2019, and accepted price undertakings, but that fact does not mean that Indonesian imports were not also a threat of injury, in particular after the measures against imports from Argentina entered into force.
287In the first place, the applicants claim that the increase in imports from Argentina was three times greater than the increase in imports from Indonesia and that the prices of the Argentinian imports were much lower, meaning that they were the main cause of the threat of injury. In addition, according to the applicants, imports from Indonesia during the investigation period amounted to 516088 tonnes, representing a market share of 3.3%, and during the post-investigation period they amounted to 581086 tonnes, representing a market share of 5% which, for the Commission, meant, according to recital 466 of Implementing Regulation 2019/244, that it was unlikely that those exports would be the main cause of injury in the imminent future. During the post-investigation period, Argentina’s market share fell by 4.1% while Indonesia’s increased by 1.7%, Malaysia’s increased by 0.9%, China’s remained stable and that of the Union industry increased by 1.5%. Indonesian biodiesel prices remained below Argentinian biodiesel prices and the profitability of the Union industry improved.
288The applicants point out that the Commission furthermore authorised, by Implementing Decision (EU) 2019/245 of 11 February 2019 accepting undertaking offers following the imposition of definitive countervailing duties on imports of biodiesel originating in Argentina (OJ 2019 L 40, p. 71), imports of around 10% of the average annual EU consumption between 2014 and the investigation period (representing, according to the applicants, 1233417 tonnes per year, or more than twice the volume of imports from Indonesia). The Commission thus was of the view that the Argentinian imports should not, in principle, impair the overall performance of the Union industry. Those imports remain, despite the adoption of Implementing Regulation 2019/244, a threat of injury to the Union industry as they avoid countervailing duties only where they do not exceed 1233417 tonnes per year and where they respect a minimum import price. It is apparent from Table 2 and Table 6 of the contested regulation that imports from Argentina have occurred in higher volumes than imports from Indonesia and that the prices of imports from Indonesia were higher than the prices of imports from Argentina during the investigation period as defined by Implementing Decision 2019/244.
289By all of those arguments, the applicants submit, in essence, that, first, imports from Argentina continue to be a factor threatening to cause injury to the Union industry and, second, in the overall context after the adoption of Implementing Regulation 2019/244, imports from Indonesia do not constitute a threat of injury to the Union industry.
290However, as regards the first point, it should be borne in mind that, in accordance with the case-law cited in paragraph 282 above, the Commission may attribute responsibility for injury to subsidised imports, even if their effects are only a part of wider injury attributable to other factors. The subsidised imports need not necessarily be the sole cause of injury or threat of injury. The persistence of a threat of injury linked to imports of biodiesel from Argentina does not preclude the Commission’s finding, in the contested regulation, of another threat of injury caused by imports of biodiesel from Indonesia.
291As regards the second point, the Commission correctly found that imports from Argentina were not capable of breaking the causal link between imports from Indonesia and the threat of injury to the Union industry, because imports from Argentina had already been countervailed (recital 418 of the contested regulation). The Commission also rightly considered that, despite those imports, the threat of injury caused by imports from Indonesia was significant, and that the causal link between those imports and the threat of injury to the Union industry could be established. Indeed, as is apparent from Table 6 set out in recital 430 of the contested regulation, the data contained in which are not contested by the applicants, during the post-investigation period the Argentinian and Indonesian market shares were almost the same (5.7% and 5%, respectively), while the prices of imports from Indonesia (EUR 655 per tonne) were lower than the prices of imports from Argentina (EUR 673 per tonne). That difference in price between imports from Indonesia and imports from Argentina is capable of supporting the Commission’s conclusion that the threat of injury caused by imports from Indonesia was significant in spite of the imports from Argentina.
292In any event, the applicants have not demonstrated, as they must in accordance with the case-law cited in paragraph 284 above, that the imports from Argentina could have had such an impact that the existence of a threat of injury to the Union industry and the existence of the causal link between the subsidised Indonesian imports and the threat of injury to the Union industry was not established.
293In addition, the applicants’ claims based on the Commission’s findings in recitals 463 and 466 of Implementing Regulation 2019/244, to the effect that it was unlikely that imports of biodiesel from Indonesia, corresponding to a market share of 5%, would be the main cause of injury in the imminent future, cannot be accepted. First, those findings of the Commission relate to a different investigation period, namely the period from 1 January to 31 December 2017, during which the anti-dumping measures on imports from Indonesia were still in force. Second, the situation changed during the investigation period relating to imports from Indonesia, because, as the Commission rightly points out, the negative effects of imports from Argentina had been neutralised with the adoption of Implementing Regulation 2019/244 in February 2019, which changed the situation on the Union market. Third, the Commission, in stating that it was unlikely that imports of biodiesel from Indonesia would be the ‘main’ cause of injury in the imminent future, did not rule out that those imports could represent a cause of injury or a threat of injury to the Union industry.
294It follows from this that the Commission’s analysis complies with the principles set out in paragraphs 280 to 282 above and that the Commission did not make a manifest error of assessment in concluding that there was a causal link between the imports from Indonesia and the threat of material injury to the Union industry. Therefore, the applicants’ arguments must be rejected.
295In the second place, the applicants claim that the inconsistency of the Commission’s non-attribution analysis is highlighted by the case-law of the WTO bodies.
296In support of their allegations, the applicants rely on two WTO Panel reports. First is the WTO Panel report entitled ‘China – Anti-Dumping Measures on Imports of Cellulose Pulp from Canada’, adopted on 25 April 2017 (WT/DS 483/R), which states, in paragraph 7.150, as follows:‘The increase in the market share of non-dumped imports, which were sold at prices close to those of the dumped imports, was not addressed … in the context of [the] demonstration of a causal relationship between dumped imports and material injury. … However, we would have expected a reasonable and objective investigating authority to at least consider in these circumstances the possible role of non-dumped imports in the price depression [the investigative authority] found to have been contributing to causing material injury to the domestic industry.’
297Second is the WTO Panel report entitled ‘United States – Anti-Dumping and Countervailing Measures on Certain Coated Paper from Indonesia’, adopted on 6 December 2017 (WT/DS 491/R), which states, in paragraphs 7.211 and 7.233, that:‘In addressing [the issue of whether the investigating authority ensured that it did not attribute to subsidised imports any (future) injury likely to be caused by alleged “other factors”] we will consider whether the [investigating authority] provided a satisfactory explanation of the nature and extent of the likely injurious effects of the other factors, as distinguished from the likely injurious effects of the subsidised imports, and whether the … explanations allow us to determine that the conclusions it reached are such reasonable conclusions as could be reached by an unbiased and objective investigating authority in light of the facts and arguments before [it] ……… where other factors contributed to the vulnerability of a domestic industry, we would expect that the likely future impact of such other factors would be considered and addressed by the investigating authority, so as to ensure that any likely future injury resulting from these other factors is not attributed to the subject imports.’
298Yet, and without prejudice to the case-law cited in paragraphs 38 and 39 above, it is apparent from the part of the contested regulation and of the provisional regulation dedicated to the causation analysis and, in particular, recitals 416 to 420 of the contested regulation and recitals 368 to 370 of the provisional regulation, concerning imports from Argentina, that the Commission’s analysis is compatible with the principles set out in those WTO Panel reports. The Commission assessed the role and the effects of imports of biodiesel from Argentina on the Union industry (recitals 430 to 433 of the contested regulation and recitals 367 to 370 of the provisional regulation) and provided a satisfactory explanation of the nature and extent of the likely injurious effects of those imports, in particular in recital 370 of the provisional regulation and recital 431 of the contested regulation, before concluding, in recital 431 of the contested regulation, that they could no longer be among the threats to the Union industry.
299Therefore, the applicants’ arguments based on those WTO reports must be rejected.
300In the third place, the applicants claim that the Commission infringed their right to sound administration, because it did not examine carefully and impartially all relevant aspects of the case in relation to imports from Argentina and, in particular, failed to consider its own findings in Implementing Regulation 2019/244.
301In that regard, it should be borne in mind that the right to sound administration presupposes a duty of diligence which requires the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see judgment of 12 December 2014, Crown Equipment (Suzhou) and Crown Gabelstapler v Council, T‑643/11, EU:T:2014:1076, paragraph 46 and the case-law cited).
302In the present case, it is apparent from recitals 416 to 420 of the contested regulation and recitals 368 to 370 of the provisional regulation that the Commission did carefully and impartially examine the relevant aspects in order to determine whether imports from Argentina were liable to attenuate or break the causal link between the subsidised imports from Indonesia and the threat of material injury to the Union industry. Since the applicants’ arguments seeking to demonstrate the contrary have been rejected, the second part of the fourth plea in law must be rejected as must, accordingly, that plea in its entirety.
303In the light of the foregoing, the action must be dismissed in its entirety, without it being necessary, for reasons of procedural economy, to rule on the Commission’s arguments calling into question the admissibility of the action as regards one of the applicants, PT Multi Nabati Sulawesi (judgment of 26 February 2002, Council v Boehringer, C‑23/00 P, EU:C:2002:118, paragraph 52).
Costs
304Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Commission and by EBB, in accordance with the forms of order sought by the Commission and EBB.
Operative part
On those grounds,THE GENERAL COURT (Fourth Chamber, Extended Composition)hereby:
1.Dismisses the action;
2.Orders PT Wilmar Bioenergi Indonesia, PT Wilmar Nabati Indonesia and PT Multi Nabati Sulawesi to pay the costs.
Delivered in open court in Luxembourg on 14 December 2022.
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