EC Acts Against Alleged US Biodiesel Dumping

by Ulrika Lomas, Tax-News.com, Brussels

17 August 2010

The European Commission has initiated an anti-circumvention investigation concerning US biodiesel exports to the European Union, following a complaint lodged by the European Biodiesel Board (EBB) in June.

The EBB claims that the profitability of EU biodiesel producers had been "severely affected" by heavily subsidized and dumped biodiesel from the US (known as “B99”).

In March 2009, following an EBB legal action, EU trade authorities imposed extensive anti-dumping and countervailing measures on imports of US biodiesel. The anti-dumping duty rates range from EUR68.6 (USD95.4) per tonne to EUR198 per tonne net while the countervailing duty rates range from EUR 211.2 per tonne to EUR237 per tonne net. These measures are in place for five years.

"The EU duties positively contributed to reestablishing more favorable market conditions for EU biodiesel producers. Nevertheless, the EU biodiesel industry is still being injured by cheap biodiesel imports from the US that are circumventing the anti-dumping and countervailing measures in place," the board stated.

According to the EBB, new patterns in the transatlantic biodiesel trade emerged following the imposition of the anti-dumping duties, with US biodiesel being increasingly exported to the EU via third countries, in particular Canada and Singapore, in order to conceal its US origin. The EBB also suggests that important volumes of US biodiesel are still being exported directly to the EU in the form of blends not covered by the EU duties, practices, the board says, which "are a mere attempt to evade the anti-dumping and countervailing duties."

The Commission anti-circumvention action initiated on August 12 is being backed up by a parallel investigation of the EU Anti-Fraud Office. In case of established fraudulent practices, unpaid duties can be collected by EU authorities up to three years back and heavy financial penalties would be imposed.

“EBB is strongly committed to ensure that the EU duties are not undermined by unfair and artificial trade practices," said EBB Secretary General Raffaello Garofalo. "We are urging EU authorities to extend the scope of the established trade measures in order to remove the injury caused to European biodiesel producers by circumvented US biodiesel.”

EU Spokesperson for Trade Lutz Guellner has said that the decision to impose anti-dumping duties on US biodiesel imports was taken "on the basis of clear evidence that unfair subsidization and dumping of US biodiesel has taken place, and that this is harming otherwise competitive EU industry, with potentially dire long term effects."

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