US biodiesel suppliers seek way around EU duties - sources

12 March 2009 18:12  [Source: ICIS news]

HOUSTON (ICIS news)--The European Commission’s announcement of duties on US biodiesel was not even a day old before US suppliers were thinking of ways to get around them and continue selling in a key market, sources said on Thursday.

Facing up to €260-420/tonne ($333-538/tonne or $1.10-1.79/gal) in anti-dumping and countervailing duties on blended product sent across the Atlantic, some biodiesel sellers were considering such options as routing Europe-bound shipments through third-party countries or selling lower blends of renewable fuels, sources said.

“That can be do-able,” one broker said of the possibility of sending material to Latin America or Asia and then re-exporting it to Europe. “Let’s see if the freight costs won’t penalise them too much. And it depends on where they would export it to - taxes could be smaller [than duties on US material], but there would still be taxes.”

Other traders said any exploitation of loopholes in the regulations would be short-lived, lasting only as long as it took the EU to sort them out. US exports to Europe were still expected to fall, with many traders saying they were moving their focus to the domestic market.

Another broker said it was exploring selling a B20 (80% mineral diesel, 20% biodiesel) blend directly to Europe, as the lower blend was not covered in the EU’s investigation.

“That would make it more of a diesel export,” the broker said. “I could definitely see people looking into that.”

Most US biodiesel suppliers had expected the EU duties, which were the result of anti-dumping complaints that the European Biodiesel Board filed in June.

US biodiesel held a 17% share in the EU biodiesel marketplace, according to European Commission statistics. The duties are in place for six months, after which the EU is scheduled to vote whether to extend them for another five years.

While European biodiesel producers hailed the commission's decision, Manning Feraci, Vice President of Federal Affairs for the US National Biodiesel Board (NBB), called it “flawed”.

“The imposition of provisional duties is nothing more than a politically expedient effort to appease the protectionist whims of the European biodiesel industry and is inconsistent with the European Union’s World Trade Organization obligations. This sets a dangerous precedent for global commerce," he said.

($1 = €0.78)

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By: Ben Lefebvre
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