28 March 2012 16:54 [Source: ICIS news]
SAO PAULO (ICIS)--A US ethanol trade group on Wednesday criticised a trade complaint filed by the EU against US ethanol, saying the complaint was flawed and unlikely to be upheld.
The EU initiated an investigation into whether the US dumped subsidised ethanol in Europe in November 2011, following a complaint from ePURE, a European ethanol trade group.
The complaint alleged that imports of US fuel ethanol had increased in absolute terms and market share, a claim rejected by Edward Hubbard, general counsel with the Renewable Fuels Association (RFA), a US trade group.
“This is not about increased volumes, only a different trade partner,” Hubbard told delegates at FO Licht’s eighth annual Sugar and Ethanol Brazil conference in Sao Paulo, Brazil.
The US only replaced Brazil as a supplier of ethanol to Europe, he said, adding that any decline in profitability in Europe was actually caused by increased wheat costs.
“The EU suffered no injury from increased exports or depressed prices… the EU market share also increased during the subject period,” the RFA official said.
The anti-dumping investigation will continue even though Europe has already closed a loophole that allowed US ethanol blends of 90% (E90) to flow into the region in 2011.
The US biofuel benefited from a loophole in the EU import tariff legislation, which classified E90 as a chemical by some member states, allowing it to enjoy a percentage-based import duty of 6.5%.
However, the EU industry complained that US imports were undercutting European producers and should be classified as denatured ethanol, which would subject E90 to a standard duty of €102/cubic metre (cbm).
The new duty will be enforced starting on 2 April.
Hubbard said the RFA was in favour of the EU changing the legislation, claiming the loophole on the European side was drawing the US material, rather than the 45 cent/gal tax break the US was giving on its side.
The US subsidy for ethanol expired at the end of 2011, a development the US will likely use to push for the dismissal of the EU anti-dumping complaint.
In case the complaint is upheld, it is possible that levies could be applied to US material for up to five years, which could pressure prices for European fuel ethanol.
ePURE earlier this month said it expects a ruling to be announced in July.
The 2012 Sugar and Ethanol Brazil conference opened on Tuesday. The two-day event was organised in partnership with IBC Brasil.
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