Contents
Judgment of the Court (Seventh Chamber)17 October 2024note(Appeal — Subsidies — Imports of biodiesel originating in Indonesia — Implementing Regulation (EU) 2019/2092 — Definitive countervailing duty — Regulation (EU) 2016/1037 — Article 7 — Calculation of the amount of benefit — Article 8(1) and (2) — Price undercutting — Price pressure)In Case C‑112/23 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 24 February 2023,PT Pelita Agung Agrindustri, established in Medan (Indonesia),PT Permata Hijau Palm Oleo, established in Medan,represented by J. Cornelis and F. Graafsma, advocaten,the other parties to the proceedings being:European Commission, represented by P. Kienapfel and G. Luengo and P. Němečková, acting as Agents,European Biodiesel Board (EBB), established in Brussels (Belgium), represented by M.-S. Dibling, avocate,THE COURT (Seventh Chamber),composed of F. Biltgen, President of the First Chamber, acting as President of the Seventh Chamber, M.L. Arastey Sahún, President of the Fifth Chamber, and J. Passer (Rapporteur), Judge,Advocate General: N. Emiliou,Registrar: A. Calot Escobar,having regard to the written procedure,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1By their appeal, PT Pelita Agung Agrindustri and PT Permata Hijau Palm Oleo seek to have set aside the judgment of the General Court of the European Union of 14 December 2022, PT Pelita Agung Agrindustri and PT Permata Hijau Palm Oleo v Commission (T‑143/20, ‘the judgment under appeal’, EU:T:2022:811), by which the General Court dismissed their action for 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 regulation at issue’), in so far as it concerns them.
Legal context
2Article 7 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), entitled ‘General provisions on calculation’, provides:1.The amount of the countervailable subsidies shall be determined per unit of the subsidised product exported to the Union.In establishing that amount, 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.2. Where the subsidy is not granted by reference to the quantities manufactured, produced, exported or transported, the amount of countervailable subsidy shall be determined by allocating the value of the total subsidy, as appropriate, over the level of production, sales or exports of the products concerned during the investigation period for subsidisation.…’
3Article 8 of that regulation, entitled ‘Determination of injury’, provides:1.A determination of injury shall be based on positive evidence and shall involve an objective examination of:(a) the volume of the subsidised imports and the effect of the subsidised imports on prices in the Union market for like products; and(b) the consequent impact of those imports on the Union industry.2. With regard to the volume of the subsidised imports, consideration shall be given to whether there has been a significant increase in subsidised imports, either in absolute terms or relative to production or consumption in the Union. With regard to the effect of the subsidised imports on prices, consideration shall be given to whether there has been significant price undercutting by the subsidised imports as compared with the price of a like product of the Union industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree. No one or more of those factors can necessarily give decisive guidance.…’
Background to the dispute
4The background to the dispute is set out in paragraphs 2 to 18 of the judgment under appeal. For the purposes of the present appeal, it can be summarised as follows.
5The appellants are Indonesian companies that produce biodiesel and export it to the European Union.
6On 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 appellants.
7By judgment of 15 September 2016, PT Pelita Agung Agrindustri v Council (T‑121/14, EU:T:2016:500), the General Court annulled Articles 1 and 2 of that regulation in so far as it concerned the first of the appellants.
8On 25 January 2018, in a report entitled ‘European Union – Anti-dumping Measures on Biodiesel from Indonesia’ (WT/DS 480/R; ‘the “EU-biodiesel (Indonesia)” Panel Report’) the World Trade Organization (WTO) Panel concluded that the European Union had, in addition, acted in a manner incompatible with several provisions of the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Implementation of Article VI of the GATT (OJ 1994 L 336, p. 103; ‘the antidumpting agreement’), set out in Annex 1A to the Agreement establishing the WTO (OJ 1994 L 336, p. 3).
9Following a complaint lodged by the European Biodiesel Board (EBB), the European Commission, by notice published in the Official Journal of the European Union on 6 December 2018 (OJ 2018 C 439, p. 16), initiated an anti-subsidy proceeding concerning imports of biodiesel originating in Indonesia.
10The investigation concerned ‘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’ (‘the product concerned’).
11Biodiesel produced in Indonesia is primarily palm oil methyl ester (‘PME’), which is derived from crude palm oil (‘CPO’). By contrast, Biodiesel produced in the European Union is mainly rapeseed methyl ester (‘RME’) but made also from other feedstock, including CPO.
12PME and RME both belong to the category of fatty acid mono-alkyl esters. The term ‘ester’ refers to the transesterification of vegetable oils, namely, 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 PME, the CFPP may be -14 degrees Celsius (°C) while for RME it is about 13 °C. On the market, biodiesel with a specific CFPP is often referred to as FAME X, for example FAME 0 for biodiesel with a CFPP of 0 °C or FAME 5 for biodiesel with a CFPP of 5 °C.
13The investigation of subsidisation and injury covered the period from 1 October 2017 to 30 September 2018 (‘the investigation period’). The examination of trends relevant for the assessment of 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.
14On 12 August 2019 and 28 November 2019 respectively, 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’), then the regulation at issue.
15It took the view that the Indonesian Government had supported the biodiesel industry by means of subsidies within the meaning of Article 3(1) of Regulation 2016/1037. 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 (‘the Fund’), 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. The Commission also found 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.
16The definitive countervailing duty applicable to the appellants was 18%.
The procedure before the General Court and the judgment under appeal
17By application lodged at the Registry of the General Court on 2 March 2020, the appellants brought an action for annulment of the regulation at issue in so far as it concerns them.
18In support of their action, the appellants relied on seven pleas in law. Only the first plea, alleging infringement of Article 8(1) and (2) of Regulation 2016/1037 in the establishment of undercutting, and the second part of the fifth plea in law, alleging a manifest error on the part of the Commission by allocating the amount of the payments received by the Fund to the total turnover of their biodiesel sales, are relevant to the assessment of the grounds put forward in the appeal.
19By the judgement under appeal, the General Court dismissed the action.
20As regards the first part of the first plea in law, alleging failure to take into account all the relevant data in the determination of undercutting, the General Court rejected the appellants’ arguments concerning the first method of calculating price undercutting, which consisted in comparing imports of PME from Indonesia with sales of PME produced in the European Union and covered approximately 20% of all sales made by the sampled Union biodiesel producers (paragraphs 33 to 41 of the judgment under appeal), the second method of calculation, which included the sales of FAME 0 by the sampled Union producers in the sales of biodiesel produced in the European Union compared to imports from Indonesia and covered 55% of all sales of the Union industry (paragraphs 42 to 52 of the judgment under appeal), and the third method of calculation, which consisted in comparing the countrywide imports of biodiesel from Indonesia to all the sales of biodiesel of the sampled Union producers (paragraphs 53 to 70 of the judgment under appeal). The General Court also rejected the second part of the first plea, alleging a failure to determine the price undercutting for the Union industry’s product as a whole (paragraphs 72 to 81 of the judgment under appeal) and an error in finding that there was price pressure (paragraphs 83 to 88 of the judgment under appeal).
21As regards the second part of the fifth plea, the General Court held, first, in paragraph 226 of the judgment under appeal, that, by allocating the amounts of subsidies not only over sales on the Indonesian market but also over export sales, the Commission acted in accordance with Article 7(2) of Regulation 2016/1037 and its ‘Guidelines for the calculation of the amount of subsidy in countervailing duty investigations’ (OJ 1998 C 394, p. 6), since those subsidies were not granted by reference to the quantities manufactured, produced, exported or transported and they are not export subsidies. Second, in paragraph 234 of the judgment under appeal, the General Court held that the Commission had not infringed its obligation to state reasons as regards the argument which one of the appellants had put forward in the alternative during the administrative procedure and according to which the amount of the subsidy should be allocated over its total turnover, including both biodiesel and other products.
Forms of order sought by the parties before the Court of Justice
22The appellants claim that the Court of Justice should:– set aside the judgment under appeal, annul the regulation at issue and order the Commission to pay the costs of the proceedings at first instance as well as on appeal; or– in the alternative, refer the case back to the General Court and reserve the costs relating to the proceedings at first instance and the appeal proceedings.
23The Commission claims that the Court should:– dismiss the appeal; and– order the appellants to pay the costs of the proceedings.
24The EBB takes the same view as the Commission.
The appeal
25In support of their appeal, the appellants put forward six grounds, the first four alleging errors of law on the part of the General Court in the interpretation of Article 8(1) and (2) of Regulation 2016/1037 and distortion of the evidence produced before it in that respect, the fifth alleging distortion by the General Court of the evidence produced before it in the context of the application of Article 7(2) of that regulation, and the sixth alleging, first, an error of law in the interpretation of their complaint alleging infringement by the Commission of its obligation to state reasons and, second, an error of law in the interpretation of Article 7(2) of that regulation.
The first three grounds of appeal
Arguments of the parties
26In the context of the first ground of appeal, the appellants submit that, in paragraphs 85 to 87 of the judgment under appeal, the General Court, first, misinterpreted Article 8(2) of Regulation 2016/1037 and, second, distorted the evidence produced before it. First, instead of testing whether the price pressure found by the Commission was ‘significant’, the judgment under appeal merely examined whether there was price pressure. According to the appellants, a difference of 0.21 percentage points between the 4.35% decrease in production costs and the 4.56% decrease in the Union industry’s sales prices, noted by the General Court in paragraph 86 of the judgment under appeal, cannot constitute significant price pressure. Second, the General Court disregarded the fact that between the investigation period and the post-investigation period there had been no price pressure, as is apparent from the table in paragraph 85 of the judgment under appeal.
27In support of their second ground of appeal, the appellants submit that, by upholding, in paragraphs 48 to 51 of the judgment under appeal, the second method for calculating price undercutting, the General Court misinterpreted or failed to take into account the findings of the ‘EU-biodiesel (Indonesia)’ Panel Report, which the Courts of the European Union are required, in accordance with the case-law, to take into account for the purposes of the interpretation and application of the anti-dumping agreement. Those findings concerned an adjustment that was the same as the adjustment made in the regulation at issue, the only difference being that, in the investigation that gave rise to that report the Indonesian import price was adjusted upwards whereas, in the regulation at issue, the Union industry sales price of FAME 0 was adjusted downwards. In so far as the General Court rejected those findings of the panel, stating that the market situation had changed compared to the situation on which those findings were based, since, now, the Union industry also produces PME, the appellants observe, first, that the share of PME production in the sales taken into consideration in the context of the second calculation method was only 20% and, second, that the market situation, in particular in so far as it concerns the Union industry’s share of FAME 0 sales, had not changed. Thus, the General Court distorted the panel’s findings or, in the alternative, failed to state why it did not take them into account.
28In the context of their third ground of appeal, the appellants submit that the General Court distorted the findings of the WTO Panel Report of 25 September 2013, entitled ‘China – Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States’ (WT/DS427/R) and other relevant WTO decisions, as well as certain judgments of the Courts of the European Union, when it upheld, in paragraph 62 of the judgment under appeal, the legality of the third method for calculating price undercutting and imposed on the appellants, in paragraph 63 of that judgment, an obligation to demonstrate that a price adjustment was necessary. In their view, it is apparent from those decisions and judgments that the investigating authority’s obligation to ensure that the products compared are comparable for the purposes of the calculation of price undercutting is absolute and is not subject to any qualifications, and that the appellants bear no additional burden of proof in demonstrating which adjustments are necessary in order to ensure a fair comparison.
29The Commission and the EBB contend that those grounds of appeal should be rejected.
Findings of the Court
30In accordance with Article 8(1) of Regulation 2016/1037, a determination of injury is to be based on positive evidence and is to involve an objective examination of, first, the volume of the subsidised imports and the effect of those imports on prices in the Union market for like products and, second, the consequent impact of those imports on the Union industry.
31Under Article 8(2) of that regulation, with regard to the effect of the subsidised imports on prices, consideration is to be given to whether there has been significant price undercutting by the subsidised imports as compared with the price of a like product of the Union industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree.
32In that regard, it should be borne in mind as a preliminary point that, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, it follows from settled case-law that the EU institutions enjoy a broad discretion by reason of the complexity of the economic and political situations which they have to examine, with the result that the judicial review of that broad discretion must be limited to verifying whether relevant procedural rules have been complied with, whether the facts relied on have been accurately stated, and whether there has been a manifest error in the appraisal of those facts or a misuse of powers (judgment of 12 May 2022, Commission v Hansol Paper, C‑260/20 P, EU:C:2022:370, paragraph 58 and the case-law cited).
33Since the assessment of whether there has been price undercutting and price pressure is an economically complex matter in respect of which Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21) does not lay down any particular methodology, the Commission enjoys a broad discretion in that regard (see, to that effect, judgment of 12 May 2022, Commission v Hansol Paper, C‑260/20 P, EU:C:2022:370, paragraph 99).
34In the present case, it follows from recitals 292 to 300 of the provisional regulation and from recitals 234 to 271 of the regulation at issue that the Commission used the three methods referred to in paragraph 20 of the present judgment to establish significant undercutting of EU prices by the Indonesian imports of biodiesel during the investigation period.
35In recitals 301 and 325 to 329 of the provisional regulation and in recitals 342 to 351 of the regulation at issue, the Commission also analysed whether the Union industry prices were depressed by the subsidised imports. In that context, it considered, inter alia, that the biodiesel market was a price-sensitive commodity market and that, on such a market, price undercutting of around 10% exerted a significant downward pressure on prices. It added that, due to that price pressure, the Union industry had not been able to benefit from the decreasing costs during the investigation period, as it had to pass on that cost decrease in full to its customers in order to avoid an even greater loss of market share and that, as a result, the Union industry had not been able to improve its unsatisfactory profit margin due to the price pressure exerted by significant quantities of low-priced subsidised imports in an otherwise favourable market situation.
36As regards, in the first place, the second method for calculating price undercutting, the appellants submit that, in the judgment under appeal, the General Court distorted the ‘EU-biodiesel (Indonesia)’ Panel Report or failed to state why it did not take that report into account.
37In that report, which concerned the anti-dumping duty imposed by Implementing Regulation No 1194/2013, referred to in paragraph 6 of the present judgment, the WTO Panel considered, inter alia, in paragraph 7.157, that ‘even though both PME from Indonesia and blended CFPP 0 [°C] biodiesel might compete for sales to the companies who blend biodiesel with mineral diesel, this point nonetheless does not address the fact that the EU authorities failed to explain whether the comparison between sales of PME and blended CFPP 0 [°C] biodiesel was made at a proper comparison level, given that PME is an input to the blends, including CFPP 0 [°C] biodiesel’. The Panel added, in paragraph 7.158 of that report, that ‘although the EU authorities made an adjustment to the price of Indonesian PME to account for different CFPP levels of Indonesian and EU biodiesel, we are of the view that this adjustment is not sufficient to account for complexities in competitive relationships between PME and blended CFPP 0 [°C] biodiesel, given that Indonesian PME is an input to blended biodiesel, including blended CFPP 0 [°C].’
38In that regard, it is apparent from the case-law of the Court that the primacy of international agreements concluded by the European Union over secondary EU legislation requires that the latter be interpreted, as far as possible, in a manner consistent with those agreements (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 31 and the case-law cited).
39Furthermore, the Court has already held 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 (United Nations Treaty Series, vol. 1155, p. 331), means that the Court must, for the purposes of interpreting and applying the Anti-Dumping Agreement, take account of the interpretation that the WTO Dispute Settlement Body has given to the various provisions of that agreement (judgment of 20 January 2022, Commission v Hubei Xinyegang Special Tube, C‑891/19 P, EU:C:2022:38, paragraph 32 and the case-law cited).
40In the present case, although the ‘EU-biodiesel (Indonesia)’ Panel Report concerned another investigation period and another act of the competent authorities, and contained grounds particular to it, with the result that the findings in that report cannot be transposed as such to the present case, that report nevertheless concerned the same product from the same third country. Accordingly, those findings may be relevant in the context of the examination of the regulation at issue.
41However, the General Court did not err in law when it took into account, in paragraphs 42 to 52 of the judgment under appeal, the ‘EU-biodiesel (Indonesia)’ Panel Report in finding, in particular, first, that the Commission had rightly pointed out, in recitals 251 and 252 of the regulation at issue, that the structure of the Union industry, which now also produces PME, had changed and that the market situation had thus changed as compared with the situation which gave rise to the analysis set out in that report and, second, that it is apparent from recitals 254 and 297 of the regulation at issue that the Commission had duly taken into account in its analysis both the use of PME and FAME 0 and the competitive relationships between those two products.
42Indeed, first, while the appellants are correct to observe that the second method of calculating price undercutting did not relate only to a comparison of the PME imported from Indonesia with the PME produced by the Union industry, which was, moreover, already covered by the first method of calculation, it does not appear to be manifestly incorrect to consider that the fact, noted by the General Court in paragraph 48 of the judgment under appeal, that the Union industry now also produces PME was a relevant factor even in the context of the analysis of the competitive relationships between FAME 0 produced by the Union industry and the imported PME, given, in particular, that, as is apparent from recital 297 of the provisional regulation, the content of which was recalled in paragraph 50 of the judgment under appeal, FAME 0 often includes up to 20% of PME.
43Second, as the General Court observed in paragraph 50 of the judgment under appeal, the Commission, in the provisional regulation and the regulation at issue, explained why it considered that the comparison between PME sales and sales of FAME 0 had been considered appropriate. The appellants do not dispute those explanations, but merely refer to the ‘EU-biodiesel (Indonesia)’ Panel Report in which that panel criticised the absence of such explanations in the investigation that gave rise to that report.
44As regards, in the second place, the third method of calculating price undercutting, in the context of which the Commission compared all imports of the product concerned from the Indonesian exporting producers with all biodiesel sales of the Union producers without adjusting the price, it should be noted that neither Article 8(1)(a) and (2) of Regulation 2016/1037 nor any other provision of that regulation states that the Commission must make such an adjustment for the purpose of determining the injury.
45It is true that, under Article 8(1) of Regulation 2016/1037, a determination of injury must involve an objective examination.
46In that regard, however, it must be stated that the appellants have not demonstrated that the General Court erred in law in holding, in paragraph 62 of the judgment under appeal, after having drawn attention in paragraph 57 to the WTO Panel report referred to in paragraph 28 of the present judgment, that the Commission’s decision not to make price adjustments, in the context of the third method of calculation, had been based on objective factors, namely the complexity of the competitive relationships between biodiesels with different CFPP levels, the difference in market conditions for biodiesels with different CFPP levels and the absence of a direct correlation between the CFPP level and the price.
47In the light of those factors, the veracity of which, as the Commission notes, is not disputed by the appellants, the third method for calculating price undercutting, which compares all imports of the product concerned with all biodiesel sales in the Union without adjustment and which, moreover, forms part of a complex calculation which includes two other methods of calculation, does not appear to be manifestly contrary to the requirement of an objective examination laid down in Article 8(1) of Regulation 2016/1037.
48In those circumstances, the General Court cannot be criticised, as the appellants do in the present appeal, for having considered, in paragraph 63 of the judgment under appeal, that, in that context, it was for the appellants to demonstrate that the adjustments which they requested were, in the present case, necessary.
49As regards, in the third place, the appellants’ arguments relating to the examination, by the Commission and then by the General Court, of whether the subsidised imports had the effect of depressing the Union industry’s prices, it should be noted that it follows from the very wording of Article 8(2) of Regulation 2016/1037 that significant price undercutting is presumed to have that effect.
50In accordance with that provision, for the purposes of determining injury, the Commission must consider, with regard to the effect on prices, ‘whether there has been significant price undercutting by the subsidised imports as compared with the price of a like product of the Union industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree’.
51It follows that, where significant price undercutting is found, that is sufficient to conclude that the effect of imports of the product in question is to depress the Union industry’s prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree.
52Consequently, since, as is apparent from paragraphs 36 to 48 of the present judgment, the General Court did not err in law as regards the examination of the second and third methods of calculating price undercutting, with the result that the Commission’s conclusion in recital 271 of the regulation at issue, according to which imports from Indonesia during the investigation period had significantly undercut Union industry prices, must be considered valid, the appellants’ arguments relating to the examination, by the Commission and then by the General Court, of the question whether the Union industry prices were depressed by the subsidised imports cannot, therefore, succeed.
53In any event, contrary to what the appellants claim, first, the General Court did not disregard the wording of Article 8(2) of Regulation 2016/1037, which it faithfully reproduced in paragraph 27 of the judgment under appeal, while referring to a ‘significant downward pressure on prices’ in paragraphs 84 and 308 of that judgment.
54Second, the fact, relied on by the appellants by way of principal argument, that, between 2017 and the investigation period, the difference between the decrease in production costs (by 4.35%) and the decrease in the Union industry’s sales prices (by 4.56%) was limited to 0.21 percentage points, is not capable of clearly demonstrating that the General Court distorted the evidence produced before it.
55In particular, as the Commission and the EBB point out, it follows from Tables 9 and 14 of the provisional regulation, first, that the Union producers’ market share decreased from 91.6% in 2017 to 81.5% during the investigation period, which coincided with the sudden increase of subsidised imports during the same period and, second, that the profitability of the Union industry amounted to 0.8% of turnover in 2017 and during the investigation period.
56In the light of all those factors, it does not appear to be manifestly incorrect to consider that the effect of imports of the product concerned was to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree.
57As a result, the first to third grounds of appeal must be rejected.
The fourth ground of appeal
Arguments of the parties
58According to the appellants, since the first three grounds of appeal demonstrate that the General Court was wrong to confirm the validity of the second and third methods for calculating price undercutting, the conclusion drawn in paragraph 80 of the judgment under appeal, that the Commission correctly ‘calculated price undercutting first for 20%, then for 55% and finally for all of the Union producers’ sales’ and that it did not therefore extrapolate from the findings made on the basis of 20% of Union sales, must be set aside. In addition, even if the Court of Justice were to uphold the second method of calculation, the General Court, according to the appellants, misinterpreted Article 8(1) of Regulation 2016/1037 by holding, in paragraph 81 of the judgment under appeal, that ‘even if the Commission had wrongly relied on the third method of calculating undercutting, the applicants’ line of argument still cannot succeed’ since ‘the use of two other methods enabled the Commission to assess the significance of undercutting for 55% of Union producers’ sales, that is to say, a majority of sales, which is representative of the situation on the market as a whole.’ It follows from the case-law of the Court and, by analogy, from Article 2(4) of Regulation 2016/1036, that price undercutting of only 7.4% established for one half of the Union industry’s sales, while the other half of those sales were disregarded, does not constitute an objective basis based on positive evidence for establishing overall price undercutting or overall price effects.
59The Commission and the EBB dispute that line of argument.
Findings of the Court
60As is apparent from paragraph 58 of the present judgment, the fourth ground of appeal depends entirely on the merits of the second and third grounds of appeal. Indeed, it is based on the assumption, put forward by the appellants in their second and third grounds of appeal, that the General Court was wrong to confirm the validity of the second and third methods for calculating price undercutting.
61Accordingly, since the second and third grounds of appeal must be rejected, the fourth ground must also be rejected.
The fifth plea in law
Arguments of the parties
62The appellants submit that, by stating, in paragraph 226 of the judgment under appeal, that ‘the subsidies were not granted by reference to the quantities manufactured, produced, exported or transported’ – which led it to conclude, wrongly, that the method of allocation provided for in Article 7(2) of Regulation 2016/1037 was legally correct – the General Court distorted the evidence before it. Indeed, it is apparent from paragraphs 189 and 220 of the judgment under appeal that there was evidence before the General Court that the payments under the Fund scheme were granted by reference to the quantities that were transported or delivered by the appellants.
63The appellants add that the fact that the Commission communication entitled ‘Guidelines for the calculation of the amount of subsidy in countervailing duty investigations’ provides that ‘for non-export subsidies, the total sales (domestic plus export) should normally be used as the denominator, since such subsidies benefit both domestic and export sales’ does not detract from the fact that an allocation on the basis of ‘the level of production, sales or exports of the products concerned’ could not be used, since the Commission cannot depart, in that context, from the higher-ranking text, in this case Article 7(2) of Regulation 2016/1037.
64The Commission and the EBB contend that that ground of appeal should be rejected.
Findings of the Court
65In accordance with Article 7(2) of Regulation 2016/1037, where the subsidy is not granted by reference to the quantities manufactured, produced, exported or transported, the amount of countervailable subsidy is to be determined by allocating the value of the total subsidy, as appropriate, over the level of production, sales or exports of the products concerned during the investigation period for subsidisation.
66By their arguments, the appellants call into question the General Court’s confirmation of the existence, in the present case, of the situation forming the premiss of that provision.
67In that regard, it should, however, be borne in mind that, in accordance with settled case-law, to allow a party to put forward for the first time before the Court of Justice a plea and arguments which it did not raise before the General Court would be to authorise it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. In an appeal, the jurisdiction of the Court of Justice is confined to review of the findings of law on the pleas and arguments debated before the General Court (judgment of 8 November 2016, BSH v EUIPO, C‑43/15 P, EU:C:2016:837, paragraph 43 and the case-law cited).
68Before the General Court, the appellants did not put forward any argument which would have sought, in a clear and precise manner, to dispute the existence of the situation forming the premiss of Article 7(2) of Regulation 2016/1037, even though the Commission had expressly referred to the existence of that situation in recitals 194 to 196 of the regulation at issue, in response to an argument of another interested party.
69On the contrary, in paragraphs 132 to 135 of their application at first instance, the appellants merely claimed that the Commission had made a manifest error in allocating the Fund payments over their total biodiesel turnover, taking the view that the Commission had disregarded their argument that those payments can be attributed only to domestic sales and not to exports to the European Union, given that only those sales had justified those payments.
70In those circumstances, the appellants cannot, first, criticise the General Court for having based its examination of the fifth plea which they raised at first instance on the existence, in the present case, of the situation referred to in paragraph 66 of the present judgment and, second, put forward for the first time before the Court of Justice arguments alleging that that situation did not exist.
71The fifth ground of appeal must therefore be rejected as inadmissible.
The sixth ground of appeal
Arguments of the parties
72The appellants claim that the General Court misinterpreted their application at first instance by stating, in paragraph 228 of the judgment under appeal, that their argument was that ‘the Commission [had] infringed its obligation to state reasons by failing to respond, in the contested regulation, to their argument that the amount of the subsidy should have been allocated over their total turnover’. In fact, as is apparent from paragraph 134 of that application, the appellants’ complaint alleging infringement of the obligation to state reasons related to the fact that the payments from the Fund had been allocated to EU sales, not the fact that they had not been allocated over the total turnover.
73Furthermore, the appellants’ argument, in the alternative, that, if amounts received for domestic biodiesel sales only can be allocated to biodiesel export sales ‘on the basis that money is fungible’, then the allocation of those payments should be based on the total sales, constitutes a substantive argument, and not merely a procedural argument. In that regard, in view of the qualifier ‘as appropriate’ in the wording of Article 7(2) of Regulation 2016/1037, by concluding, in paragraph 227 of the judgment under appeal that ‘the approach consisting in taking into account the total turnover of biodiesel sales [was] appropriate and [did] not therefore appear to be manifestly incorrect’ without even examining whether or why this was appropriate, the General Court misinterpreted and misapplied that Article 7(2).
74The Commission and the EBB dispute those arguments.
Findings of the Court
75As the appellants point out in the context of the first part of the present ground of appeal summarised in paragraph 72 of the present judgment, it follows from paragraph 134 of the application at first instance that the appellants’ complaint alleging infringement, by the Commission, of the obligation to state reasons related, in fact, to the fact that the Fund’s payments had been allocated to sales to the European Union and not to the fact that they had not been allocated to the total turnover, including both biodiesel and other products.
76Yet it was in relation to the latter aspect that the General Court, in paragraphs 228 to 234 of the judgment under appeal, examined and then rejected the complaint alleging infringement of the obligation to state reasons.
77It should, however, be recalled that, if the grounds of a judgment of the General Court reveal an infringement of EU law but its operative part is shown to be well founded on other legal grounds, the appeal must be dismissed (judgment of 22 September 2020, Austria v Commission, C‑594/18 P, EU:C:2020:742, paragraph 47 and the case-law cited).
78Thus, despite the error noted in paragraph 76 of the present judgment, the General Court provided a sufficient and correct response to the two arguments underlying the present ground as regards their substance. Indeed, it correctly considered, first, in paragraph 226 of the judgment under appeal that since the subsidies were not granted by reference to the quantities manufactured, produced, exported or transported, the Commission, by allocating the amounts of subsidies over the total turnover generated by the sales of the product concerned, namely biodiesel, during the investigation period, complied with Article 7(2) of Regulation 2016/1037. In addition, second, the General Court also rightly stated, in paragraph 231 of the judgment under appeal, that it was clear from recital 81 of the provisional regulation, the analysis of which was confirmed by the contested regulation, that the allocation took place in accordance with Article 7(2) of Regulation 2016/1037, which provides for the allocation of the value of the total subsidy over the level of production, sales or exports of the ‘products concerned’, which is, in the present case, biodiesel.
79It follows from the very wording of Article 7(2) of Regulation 2016/1037 that, in the situation envisaged by that provision, the amount of countervailable subsidies must be determined by allocating the value of the total subsidy over the level of production, sales or exports of the ‘products concerned’, thus excluding other products which may be sold by the undertakings concerned. In addition, it does not appear to be manifestly incorrect to consider, as the General Court did in paragraph 226 of the judgment under appeal, that the payments from the Fund did not limit their effects on the Indonesian domestic market, but constituted support provided to biodiesel producers and could also confer a benefit on export sales.
80In those circumstances, the sixth ground of appeal must also be rejected and, accordingly, the appeal must be dismissed in its entirety.
Costs
81In accordance with Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs.
82Under Article 138(1) of those rules, applicable to proceedings on appeal by virtue of Article 184(1) thereof, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
83Since the appellants have been unsuccessful they must be ordered to bear their own costs and to pay those incurred by the Commission and the EBB, in accordance with the forms of order sought by those parties.
Operative part
On those grounds, the Court (Seventh Chamber) hereby:
1.Dismisses the appeal;
2.Orders PT Pelita Agung Agrindustri and PT Permata Hijau Palm Oleo to bear their own costs and to pay those incurred by the European Commission and by the European Biodiesel Board.
Delivered in open court in Luxembourg on 17 October 2024.
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