EU biodiesel industry to launch antisubsidy case vs. Argentina

By The European Biodiesel Board | September 28, 2017

The European Biodiesel Board is preparing to launch an antisubsidy case against Argentinean biodiesel imports, following the recent decision by the European Union to significantly lower the antidumping duties for the country. The EBB is highly concerned about the impact that Implementing Regulation 2017/1578 is having on the EU market. A fast-track imposition of high-level countervailing duties will be necessary to prevent an influx of products from Argentina.

The revised antidumping duties on Argentinian biodiesel imports are now ranging from 43.18 to 79.56 euros per metric ton, a much lower level than those set previously. The move has led to a major increase in the volumes of subsidized biodiesel exports from Argentina into EU markets. The subsidies mean that Argentinian exporters are able to sell biodiesel at a price that is lower than the cost of the raw materials alone in the EU. This is resulting in severe damage to the EU biodiesel industry and related economic activities, which is expected to worsen over the next weeks and months.

Following feedback from the European Commission itself, the EU biodiesel industry is responding quickly by making an antisubsidy complaint against such unfair trade flows from Argentina. With damage occurring in the markets just a few days after the duties were lowered, the EBB is raising the attention of the delegates of member states and the European Commission to raise awareness of the absolute necessity of shortening all possible delays to starting the registration of all future imports, as well as beginning an investigation and quickly adopting a provisional countervailing duty against Argentinean imports. Such “fast-track” duty adoption against unfairly priced exports from Argentina was recently implemented by U.S. trade defense authorities and the EU biodiesel industry is hoping for a similar approach in the EU, if possible.

“This is a legitimate fight to protect the EU biodiesel market—and the 120,000 jobs it supports—from a heavily subsidized, export-oriented industry,” said Raffaello Garofalo, EBB’s Secretary General. “We are prepared to do whatever it takes to limit the recurring Argentinian biodiesel imports. An EBB antisubsidy complaint will be presented imminently. In our view, it is essential that the registration of all incoming imports from Argentina starts as soon as possible and that a provisional duty is urgently established by EU Trade Defence authorities.”

Argentina and Indonesia apply a tax on exports of the raw materials (soybean and palm oil), which largely exceeds the tax on exports of final processed biodiesel. This discourages exports of raw materials in favor of exports of biodiesel and allows the domestic biodiesel industry to benefit from raw materials at significantly and artificially reduced prices, reducing its costs of production and conferring its domestic industries of biodiesel with a substantial advantage in relation to their competitors abroad.

Following a legal complaint lodged by EBB in 2012, the definitive antidumping measures against unfair biodiesel imports from Argentina and Indonesia have been imposed for a period of five years via EU Regulation 1194/2013, published on Nov. 26, 2013. Argentina lodged a complaint at the WTO in December 2013. Following the WTO Appellate Body’s report that was published in October 2016, the European Commission had been given until Aug. 10, 2017, to ensure the EU duties conform with the WTO Appellate Body’s report. The EU and Argentina mutually agreed to postpone the deadline to Sept. 28. In the meantime, and despite the EU industry’s strong disagreement, the EU decided to substantially lower the antidumping duties against Argentina, in order to conform to the WTO Appellate Body decision. This decision by the EU Commission came into force last week. In June 2014, the Indonesian government lodged a similar complaint at WTO. The case is, however, still under litigation and the industry is awaiting the ruling of the panel.

 

 
 
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