Bridges Trade BioRes • Volume 9 • Number 10 • 29th May 2009

EU Looks to Extend Import Duties on US Biodiesel

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The European Commission submitted a proposal on Thursday to extend for up to five years the temporary tariffs that it imposed on imports of US biodiesel in March. A decision on the matter should come next month.

The anti-dumping and anti-subsidy tariffs are meant to counteract the effects of the payments and other forms of support that Washington offers its domestic biodiesel producers. European makers of the biofuel argue that the US subsidies have triggered an influx of under-priced American imports that has pushed them out of their own market.

After a formal request from the European Biodiesel Board in 2008, the Commission launched an investigation into the US subsidies. The results of that study prompted the imposition of the temporary duties in March, a move that drew broad support from European governments (see Bridges Trade BioRes, 6 March 2009, http://ictsd.net/i/news/biores/42454/).

Since then, the Commission has conducted a second probe into Washington’s biodiesel subsidies. Those findings resulted in an increase in tariffs against some firms, but a decrease for the companies that cooperated with the investigation.

If European ministers endorse the extension of the duties next month, the measures would take effect as soon as they have been translated and published in the Official Journal of the EU. That process usually takes between four and six weeks.

The move was warmly welcomed by the European biodiesel producers, who have been struggling to cover their costs in an increasingly tough market.

“Without this, the situation for the sector would have been intolerable,” said Bernard Nicol, the director general of France’s Diester Industrie, in an interview with Reuters. “Still, very significant problems remain because biodiesel margins are very poor everywhere in the world.”

Under the proposed duties, biodiesel produced by US agricultural conglomerate Archer Daniels Midland would be slapped with a duty of €359 per metric ton, a jump from the €261 tariff that was imposed in March. Cargill products, on the other hand, would get a slight reprieve with tariffs on its biodiesel sliding to €214 per metric ton, €61 lower than the duty now in place. The 50-odd firms that cooperated with EU’s inquiry will face tariffs of €335 per metric ton, slightly less than the €409 duty that all other companies will encounter.

Whether Washington will respond with subsidy reforms remains to be seen. Earlier this month, US President Barack Obama, a former senator from the farm-heavy state of Illinois, introduced a Presidential Biofuels Directive that aims to “aggressively accelerate the investment in and production of biofuels,” according to a government statement. But Obama has also vowed to “end direct payments to large agribusinesses that don’t need them,” although at the time he made no specific reference to producers of biofuels.

Additional information

To learn more about Obama’s Biofuels Directive, please see http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2009/05/0145.xml

ICTSD reporting; “EU move on US biodiesel vital but not enough-Diester,” REUTERS, 28 May 2009; “EU states seen backing duties on US biodiesel,” REUTERS, 29 May 2009.