Major French biodiesel producer Saipol, a subsidiary of Avril, is cutting biodiesel production and rapeseed crushing activities in the wake of a recent decision by the EU to drastically lower antidumping duties on Argentine biodiesel imports after a World Trade Organization appellate decision found the tariffs were too high.

“If the EU does not adopt any effective countermeasures, about 1.75 million metric tons (525 million gallons) of soybean biodiesel could be imported each year into Europe, including (in a full year) 1 million tons (more than 300 million gallons) into France alone, to the detriment of European rapeseed biodiesel,” Saipol stated in a press release. “This will take effect Oct. 6, as the first Argentine cargo ships are already docking in European ports.”

With the U.S. having recently imposed preliminary countervailing duties on biodiesel imports from Argentina, the EU is once again a prime destination for Argentine product. 

“Saipol must adapt its production immediately to the marked drop in orders and the market destabilization already caused by reopening of the European market to Argentine biodiesel,” the company stated.

Saipol operates five biodiesel plants in France and even more rapeseed crushing facilities. The company stated its biodiesel production in 2018 could be reduced by nearly half, from 1.3 million tons (390 million gallons) of biodiesel in 2017 to 700,000 tons (210 million gallons) next year.

“These measures are necessary in order to preserve the competitiveness and future of crushing and esterification activities and the sale of biodiesel sourced from French agriculture, and the employment associated with them,” Saipol stated. According to figures from the European Biodiesel Board, the EU biodiesel industry supports 120,000 jobs.

As a result of Argentina’s differential export tax scheme, Argentine biodiesel is being sold on the European market at a price that is much lower than that of the soybean oil used to produce it, Saipol noted, adding that the price is equal to or less than the price of raw rapeseed oil used to produce biodiesel in France.

The company stated that if no effective countermeasures are implemented, the French sector will be unable to deal with this “unfair competition,” particularly since EU antidumping duties on Indonesian biodiesel may also be reduced; renewable diesel market growth in the EU based on palm imports; and the EU’s Renewable Energy Directive II is expected to decrease by half the share of first-generation biofuels required for on-road fuel between 2020 and 2030.

“In no case,” the company stated, “does this plan for recourse to part-time operation affect the determination of the Avril Group and its subsidiary Saipol to pursue the production of biodiesel, a renewable energy that contributes to energy transition and to preserving and developing this market for French oilseed production.”