E.U. imposes retroactive duties on U.S. biodiesel

by World Grain Staff
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BRUSSELS, BELGIUM — The European Biodiesel Board (EBB) said on May 9 that it welcomed a recent announcement confirming the adoption by E.U. member states of regulations preventing the circumvention of the anti-dumping and countervailing duties on U.S. biodiesel in place since 2009.

EBB said this decision successfully concludes an investigation by European Commission services prompted by an EBB complaint last June and was backed up by member states last week. Since early 2007, the profitability of E.U. biodiesel producers had been severely affected by heavily subsidized and dumped biodiesel from the U.S. (known as B99), the EBB said.

In March 2009, following an EBB legal action, E.U. trade authorities imposed extensive anti-dumping and countervailing measures on imports of U.S. biodiesel. These measures are in place for five years. The E.U. duties partly contributed to reestablishing more favorable market conditions for E.U. biodiesel producers. Nevertheless, the E.U. biodiesel industry continued being injured by cheap biodiesel imports from the U.S., circumventing the anti-dumping and countervailing measures in place, the EBB said.

Soon after March 2009, the EBB said new patterns in the transatlantic biodiesel trade emerged, as follows:

• The trans-shipment of U.S. biodiesel in third countries (in particular Canada) to conceal its U.S. origin;

• The export of artificially designed blends containing less than 20% biodiesel and not covered by the E.U. measures adopted in 2009 (typically B19, B7, etc).

Following an EBB complaint, the commission opened an investigation in August 2010, which demonstrated that the remedial effects of the duties in place since March 2009 had been affected both in terms of quantity and prices by B19 and lower blends imports, as well as by imports of U.S. biodiesel trans-shipped in Canada. The commission investigation also did not bring to light any due cause or economic justification to these practices, except avoiding the payment of the existing EU anti-dumping and countervailing duties.

The anti-circumvention measures adopted by the council are:

• retroactively extending to Aug. 13, 2010, the definitive anti-dumping and countervailing duties to imports of biodiesel consigned from Canada. In this case, the maximum combined anti-dumping and countervailing duty calculated during the main investigation will apply (€409,2/ton).

• retroactively extending to Aug. 13, 2010, the definitive anti-dumping and countervailing duties to all imports of U.S. biodiesel blends below the 20% threshold (B19, B7…). For U.S. companies already investigated in 2009, the combined per-company duties will apply (ranging from €213,8 per tonne to €409,2 per tonne) while other U.S. companies will be subjected to the highest combined duty (€409,2 per tonne), in proportion to the biodiesel content in the blend.

Separately, the regulations adopted by the council last week terminate the investigation into circumvention via Singapore, also initiated in August 2010, given that the majority of biodiesel exports to the E.U. were found to be of limited volume and of genuine Singaporean origin.

Since the adoption of the definitive anti-dumping and countervailing duties on U.S. biodiesel in March 2009, EBB has been actively tracking all circumvention attempts and new trade patterns affecting their efficiency. It is therefore with great satisfaction that EBB sees its claims confirmed and its efforts recognized by the recent council decision.

EBB is aware that new trans-shipment destinations for U.S. biodiesel have surfaced recently. EBB is systematically investigating these new trade patterns and stands ready to address them in due course with commission services.

In parallel, the European biodiesel industry has been working with the E.U. Anti-Fraud Office (OLAF) to address fraudulent U.S. biodiesel imports into the E.U. In case of established fraudulent practices, unpaid duties can be collected by E.U. authorities up to three years back, which would also entail heavy financial penalties.

“The anti-circumvention measures adopted by the council represent a decisive move to ensure that the remedial effect of the E.U. duties on U.S. biodiesel is fully maintained over time. Operators should be aware that any future attempt to circumvent the existing duties can be investigated and remedied in the same way, with retroactive financial implications for the companies involved,” said EBB Secretary General Raffaello Garofalo.
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