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EU slaps duties on U.S. biodiesel imports: sources

Date: 04-Mar-09
Country: BELGIUM
Author: Darren Ennis

EU slaps duties on U.S. biodiesel imports: sources Photo: Valentin Flauraud
A sample of rapeseed biodiesel is displayed atop rapeseeds at EcoEnergie's production plant in Etoy, near Geneva, August 13, 2008.
Photo: Valentin Flauraud

BRUSSELS - A key European Union trade panel approved on Tuesday temporary anti-dumping and anti-subsidy duties on imports of biodiesel from the United States, sources with knowledge of the decision said.

"It went through with no problem," one source told Reuters on condition of anonymity after a meeting of the EU's anti-dumping committee of 27 national trade diplomats.

From March 13, U.S. firms exporting biodiesel into the EU will have to pay additional tariffs for an initial six months, ranging from 26 euros ($32.88) to 41 euros per 100 kg.

Also per 100 kg, Archer Daniels Midland will face duties of 26 euros, Cargill 27 euros, Imperium Renewables 29 euros, Green Earth Energy Fuels 28 euros and World Energy Alternatives 29 euros.

Peter Cremer North America and most other U.S. biodiesel companies exporting to Europe will pay 41 euros per 100 kg.

The duties remain for up to six months. The executive European Commission must then decide whether to propose "definitive" duties, which normally last five years. Definitive duties must be approved by EU governments to enter into force.

The move is the latest in a series of transatlantic trade spats dogging EU-U.S. relations, with Brussels and Washington at loggerheads over an EU ban on imports of U.S. chlorinated chicken and hormone-treated beef.

The EU has expressed dissatisfaction with the inclusion of a so-called "Buy American" clause in a U.S. stimulus plan as the Group of 20 industrial and emerging economies pledged to avoid protectionist measures to deal with the global economic crisis.

Brussels began a probe into the imports last year following a complaint from EU producers of biodiesel -- by far the main biofuel produced in Europe -- who said they were being hammered by U.S. subsidies.

Such subsidies distort the growing international trade in plant-based fuels, the EU producers said.

"If ... these duties will be imposed, then this proves our complaint was well founded," Raffaello Garofalo, secretary general of the European Biodiesel Board, told Reuters.

"This will re-establish a level playing field and put an end to unacceptable and artificial prices created by U.S. biodiesel producers."

MARKET RESTRUCTURING

Traders said they expected biodiesel prices in Europe to firm on the news.

"The industry will certainly start restructuring itself in the short term to medium term with one eye on the possibility that the duties could be imposed permanently," one broker said.

Imports from the United States into Europe are larger than from any other country and increased from about 7,000 tons in 2005 to more than 1.5 million tons last year.

The U.S. government under then-president George W. Bush and U.S. biodiesel industry had called the European complaint a "protectionist ploy."

The United States Trade Representative's office said it had no immediate comment.

EU producers are particularly unhappy with subsidies for so-called B99 -- biodiesel with small amounts of mineral diesel -- that they said were distorting global trade rules.

The EU firms say exporters in the United States are involved in so-called "splash and dash," whereby they import cheaper biodiesel from countries such as Brazil and add less than 5 percent of U.S. mineral diesel so they can pick up the subsidy from Washington before exporting to Europe.

The EU has long encouraged the production of so-called "green" biofuels -- once hailed as a way of reducing the world's reliance on crude oil and slowing climate change.

Many scientists and environmental groups contend that their production has contributed to food price inflation, depleted rainforests and failed to save substantial greenhouse gas emissions.

(Editing by Dale Hudson)

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