LONDON (ICIS)--European makers of bioethanol have been cushioned for half a decade by an anti-dumping duty keeping out all but the cheapest of US ethanol - but this protective trade barrier is about to come down.
The US has been the world’s largest ethanol-producing nation since 2005, according to the Official Journal of the EU.
In 2010, the EU became an easy target, especially with rules demanding more biofuel blending in petrol (a target of 5.75% by 31 December 2010, up from 2% required in December 2005).
The US share of the European market rocketed from 1.9% in 2008 to 15.7% in an investigation period (IP) of 1 October 2010 to 30 September 2011, crowding the domestic market, according to the Journal.
Imports of US ethanol into the EU rose tenfold in four years from 2008 to the IP, according to data from the US International Trade Commission (ITC).
After complaints from European manufacturers, the European Commission applied a tariff of 9.5% on imports from the US.
Explaining its decision, the Commission’s 2013 analysis had judged there was “consistent price undercutting” of 5.6% on average.
As a defensive measure it has worked exceptionally well. US exports of fuel ethanol to EU nations plunged: the UK and the Netherlands, two key recipients, saw fuel ethanol volumes fall off after 2013.
On some rare occasions, ethanol has forced its way past the trade barrier when a price arbitrage made it profitable (when European prices soared sky-high in late 2015, Dutch imports ticked up briefly).
It was a win for five producers. But by this point, and with the expiry of the anti-dumping measure in sight, industry players at the time were of the view there was little point risking bringing product over – even if it was ostensibly suspended.
Now the 2018 deadline for the end of the original anti-dumping measures is on the horizon, there are subtle signals that some players are preparing to make the most of this transatlantic trade corridor.
Explore the interactive chart below for more information on this biofuel battle.
Focus article by Vicky Ellis
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