Asia biodiesel makers set to benefit from EU duties on US cargoes

05 March 2009 11:25  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian biodiesel producers stand to benefit if the European Union (EU) slaps temporary anti-dumping duties (ADD) on US cargoes, market sources said on Thursday.

"This is good news for all palm methyl ester [PME] manufacturers in southeast Asia," a trader said.

The proposed duties, ranging from €280-410/tonne ($354-519/tonne) on US-origin biodiesel cargoes, cancelled out the benefit that US producers had enjoyed through tax credits of close to $300/tonne under the federal $1/gal blending credit scheme on exports, the trader added.

Industry sources in Europe said that duties at those levels - one-half to two-thirds the current price of US biodiesel - would severely limit, if not end, the flow of exports across the Atlantic. Before the current market downturn, the US shipped as much as 70% of its biodiesel to Europe.

Most PME sellers in Asia said that the temporary duties - which would last for a minimum of six months - could potentially rejuvenate Asian biodiesel trade into Europe following the recent slump in the industry.

"I think it is the right thing to do," said Jarmo Honkamaa, deputy CEO of Finland’s Neste Oil, which is currently building a 800,000 tonne/year renewable diesel plant in Jurong Island, Singapore. He said the duties would put an end to "splash and dash" cargoes.

However, he urged market players to proceed with caution, adding that such "artificial ways to stop trade is not a very healthy way to do things".

Despite the advantage Asian biodiesel would have it was too early to predict a surge in orders in poor market conditions, traders said.

A marketing official from a biodiesel producer based in Malaysia said the company had not received any enquiries yet.

"People came to know about this only two days ago," he said, adding that buyers could be waiting for firmer confirmation of the news reports.

Palm biodiesel is manufactured from crude palm oil (CPO) and can be used as a renewable substitute for conventional fossil fuels such as diesel and gasoil.

Biodiesel manufacturers in Asia include Wilmar, Vance, Carotech and Carotino.

($1 = €0.79)

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By: Jeremiah Chan
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