US officials, ethanol advocates denounce EU tariff decision

20 February 2013 21:25  [Source: ICIS news]

HOUSTON (ICIS)--Two renewable fuels trade groups on Wednesday blasted a decision this week by the EU to place a 9.5% tariff on imports of US ethanol, calling it “blatant protectionism at its worst”.

The European Commission sought the duties amid accusations that US ethanol producers are dumping their product into the EU market.

The imposed five-year duty is €62.30/tonne ($82.75/tonne) of ethanol imported from the US.

It comes after the EU said their investigation found that European biofuel manufacturers suffered “material injury” from US ethanol being dumped into their markets in 2010-2011.

US trade officials and trade representatives dispute the EU’s findings and resulting action.

“The tariff is outrageous and based on absolutely no facts or evidence of harm,” the Renewable Fuels Association (RFA) and Growth Energy said in a joint statement.

An official with the US trade representative’s office expressed disappointment with the EU’s decision.

“We continue to have serious concerns about a number of procedural and methodological irregularities that took place during the final stages of the investigation,” the trade official said.

The imposed tariff comes amid talk of a proposed free-trade agreement between the US and EU, which President Barack Obama touched on in his state of the union speech earlier this month.

Whether through those negotiations or through other legal means, the RFA and Growth Energy say they intend to fight the tariff.

“Because of the unprecedented action taken by the EU, we are contemplating all avenues to overturn the recent unfounded decision,” said Tom Buis, CEO of Growth Energy. “We expect this overtly protectionist action to be front and centre in any US-EU trade discussions.”

In December, sources expressed concern to ICIS about the possible duties, saying US material has not been subject to a subsidy since the end of 2011.

“It’s a trade war on the US,” one source said. “Ethanol and corn are very important for the US. The whole investigation is bogus and has been carried out on fragile ground.”

The US is the world’s largest ethanol exporter, for whom the European market has been a key export destination.

The introduction of penalties on US product is encouraging news for European ethanol producers. Also, the opportunities to bring product from the US to Europe would become limited, and sources expect that the European market will import fuel ethanol from Brazil.

($1 = €0.75)

Additional reporting by Sarah Trinder

By: Jeremy Pafford
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