EU's repeal of ADDs on US ethanol 'risks serious consequences for entire value chain'- trade body

Source: ICIS News

2019/05/15

LONDON (ICIS)--The EU’s repeal of anti-dumping duties (ADDs) on US fuel ethanol will subject Europe producers and associated industries to “unfair trade practices” as well as denting European climate change ambitions, trade body ePure said on Wednesday.

POET biorefinery in North Dakota (Photo credit: Design Pics Inc/REX/Shutterstock)POET biorefinery in North Dakota (Photo credit: Design Pics Inc/REX/Shutterstock)

The European Commission issued a notice on 14 May repealing a €62.30/tonne penalty on US ethanol imports, introduced in 2013.

The decision could encourage US exporters to direct more ethanol to Europe, warned ePure.

Import volumes could increase further if other US export markets introduce stricter control on US ethanol imports, it said.

“The decision comes at a time when other key US export markets, including Brazil, China, Peru and Colombia, have introduced or are considering measures to protect themselves from unfair US ethanol exports,” according to a statement issued by ePure.

“The negative impact of a surge in US fuel ethanol exports to the EU would be felt not only by the European renewable ethanol industry, but also by European agriculture.”

Secretary-General of ePure Emmanuel Desplechin also argued increased US ethanol import volumes could impact emission reductions in Europe.

“The EU’s 2050 climate goals require a massive uptake of conventional and advanced biofuels. To achieve them, policymakers must do a better job of creating an environment in which Europe’s ethanol industry can compete on a level playing field and valorise domestic biomass into food and non-food uses.”

European market participants have previously confirmed that US fuel ethanol imports have lower greenhouse (GHG) savings on average than material produced in Europe.

But buyers, traders and producers disagree over how much ADD-free US ethanol Europe's fuel markets could absorb, with increasingly strict targets for greenhouse gas savings.

Only two US producers are currently thought to hold European ethanol certifications that enable fuel ethanol exports into Europe, according to several sources.

Time will soon tell just how much demand exists for US fuel ethanol, said one fuel ethanol source today, adding that the arbitrage window is "definitely open."

There are also concerns that increased US imports at cheaper prices could put negative pressure on traditional ethanol prices, particularly 99% industrial ethanol.