Europe producers welcome EU duties on US biodiesel

12 March 2009 15:32  [Source: ICIS news]

By Alex Nimmo and Rachel Howat

LONDON (ICIS news)--The European Biodiesel Board (EBB) welcomed on Thursday the publication of a European Commission regulation applying dissuasive anti-dumping duties against imported biodiesel from the US.

“We are confident that this is an effective dissuasive measure that is needed to see this industry survive. It is in no way protectionist but rather levels the playing field,” said Amandine Lacourt, project manager of the EBB.

The EBB’s stance was that subsidised US-produced material should only be sold into the domestic market, and it hoped that the new legislation would stem the flow of product heading for Europe.

The EBB lodged a joint anti-dumping complaint with the Commission's DG Trade in April 2008 against “unfairly” traded biodiesel. It contested that the US subsidy schemes and dumping practices were in breach of World Trade Organisation (WTO) rules.

However, US producer organisations have claimed that the legislation is European protectionism and that their burgeoning industry needs the subsidy to survive.

Biofuels throughout the world benefit from a range of supportive legislative measures, from tax breaks to subsidies and mandates. Furthermore, US producers argued that the EU market suffers from problems of its own making.

Manning Feraci, vice president of federal affairs for the US trade group the 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, [suffer from] bad business models, high feedstock costs and detrimental changes in EU member state policies.”

The new European duty, to be applied to all trades from 13 March onwards, is in excess of the $300/tonne ‘blenders’ credit’ that biodiesel picks up in the US. This is due to the existence of further subsidies beyond the ‘blenders’ credit’, which were also part of the original EBB complaint. The varying level of uptake of these credits by US producers was taken into account when deciding the appropriate duty levels.

A European broker said that in time it expected the duty level to be standardised across the business.

These measures will be in place for six months, with a vote on the long-term future of the taxation scheme expected in June 2009.

European biodiesel production had fallen sharply since the summer of 2008 as manufacturers found themselves unable to compete with imported material.

“Quite a lot of German producers are not producing at all,” said Johannes Daum of the German Biofuel Industry (VDB). “We are happy that measures have been announced against the importation of US biodiesel. We believe that production will increase again to meet market demand.”

Germany is the largest producer in Europe and last year the country’s consumption was 2.7m tonnes. Its capacity was 4.8m tonnes.

($1 = €0.78)

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