US biodiesel board seeks accord with Europe

25 January 2008 21:46  [Source: ICIS news]

HOUSTON (ICIS news)--The US National Biodiesel Board (NBB) said on Friday it seeks cooperation with its European counterpart, but also defended a controversial blender tax credit.

The NBB was responding for calls for possible trade retaliation by the European Biodiesel Board, which has lodged a complaint with the European Commission over subsidised US exports of B99 biodiesel fuel.

According to the EBB, the quantities of B99 (1% petro-diesel, 99% biodiesel) coming into Europe from the US and their subsidies pose unfair practices and a potential threat to the health of the European biodiesel industry.

European biodiesel producers want a stop to the so-called “splash and dash” loophole, where foreign producers ship fuel to the US to take advantage of the federal blender tax credit and then ship the fuel to Europe.

The NBB said the US industry has denounced “splash and dash” transactions and it was involved with efforts in Congress to end the practice.

However, the NBB said the blender tax incentive can be claimed on both imports and exports and therefore does not discriminate against EU biodiesel and is consistent with US World Trade Organisation (WTO) commitments.

Cooperation between the US and the European biodiesel industries is important to promote increased production and use of biofuels in order to achieve reduction in petroleum consumption, the NBB said.

US and European biodiesel producers are facing similar challenges due to prohibitively high feedstock costs, the NBB said. 

Also, policy changes by some EU states have hurt the European biodiesel industry, the NBB said.

Bookmark Simon Robinson's Big Biofuels Blog for some independent thinking on biofuels

By: Judith Taylor
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