04 March 2009 18:46 [Source: ICIS news]
HOUSTON (ICIS news)--The EU appears ready to announce temporary duties on imports of US biodiesel, after a European Commission trade panel met with EU member state representatives earlier in the week, industry sources said on Wednesday.
“Nothing has been announced officially, but it looks as if it will go through. There are reasonable chances that these measures will be applied in the next few days,” said European Biodiesel Board (EBB) project manager Amandine Lacourt.
US producers enjoyed an unfair advantage from receiving a federal $1/gal blending credit, the EBB said.
US biodiesel manufacturers have said their burgeoning industry needs the credit to survive and that the EU market suffer from problems of its own making.
A European Commission representative was not immediately available for comment.
According to sources close to the matter, the commission would levy duties ranging from €280-290/tonne ($354-367/tonne, $1.18-1.22/gal) on imports from US producers ADM, Cargill, Green Earth Fuels, Imperium Renewable and World Energy Alternatives. Distributor Peter Cremer North America and most other US biodiesel companies would have to pay €410/tonne.
Sources at the companies declined to speak on the record, but most said that duties at those levels - nearly one-half to two-thirds the current price of US biodiesel - would severely limit, if not kill, the flow of exports across the Atlantic. Before the current market downturn, the US shipped as much as 70% of its biodiesel to Europe.
US soy methyl ester (SME) was assessed on 26 February at $783-813/tonne, according to global chemical market intelligence service ICIS pricing.
“The duty would put US material on par in the EU market, take away the subsidy advantage,” said one source knowledgable about the situtation. “But the bigger issue for the industry is that there’s just no demand. Exports to the EU have just stopped."
The temporary duties would last for six months. EU member representatives and the commission would then decide whether to extend them for another five years, sources said.
Lacourt said the duties would “level the playing field” for EU biodiesel producers, who have seen US imports of the renewable fuel grow from 50,000 tonnes in 2006 to more than 1m tonnes in March 2008, a market share of 17%, according to commission data.
Representatives of the US biodiesel industry have said they expect the commission to approve the temporary duties but to shy away from making them permanent.
Manning Feraci, vice president of federal affairs for the US trade group National Biodiesel Board (NBB), said lawyers for the US would still be able to prove that the downturn in the EU biodiesel industry was caused by factors other than subsidies.
“As the case proceeds, the NBB will continue to highlight this fundamental shortcoming in the EBB’s complaint,” Feraci said. “Those companies that are faring poorly, it is ... bad business models; high feedstock costs; and detrimental changes in EU member state policy that are the cause.”
($1 = €0.79)
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