European Union imposes biodiesel tariffs

By Kris Bevill | April 15, 2009
Prompted by complaints from the European Biodiesel Board (EBB) that U.S. biodiesel was wreaking havoc on Europe's biodiesel industry, the European Commission has put in place temporary anti-dumping and anti-subsidy tariffs on all biodiesel produced in the United States. The tariffs became effective March 13 and will remain in place until July, at which time the Commission will determine whether to impose 'definitive' tariffs, which would last for the next five years.

U.S. biodiesel producers are now required to pay between 211.20 and 237 (approximately $270 to $300) per metric ton for the anti-subsidy duties. The anti-dumping measures pile on an additional charge of between 23.60 and 208.20 (approximately $30 to $265) per metric ton.

EU Trade spokesperson Lutz Guellner said the Commission determined there was a need for tariffs after a year-long investigation showing "clear evidence that unfair subsidization and dumping of U.S. biodiesel has taken place." Commission representatives visited a sampling of U.S. biodiesel facilities during its investigation, including Archer Daniels Midland Co. in Decatur, Ill., Cargill Inc. in Wayzata, Minn., and World Energy Alternatives LLC in Boston.

Gene Gebolys, president and CEO of World Energy Alternatives, said his company was vocal in its opposition to provisional duties from the start and now that they are in place, proof will soon be available that the duties will hurt Europe's biodiesel industry more than they will help. "As prices rise in Europe, Europeans will be paying more for less biodiesel, putting even more pressure on their already dwindling diesel stocks," he said. "I am confident that the Europeans will soon have all the evidence they need to conclude that their protectionist impulse must give way to more enlightened policies."

On the contrary, EBB Secretary General Raffaello Garofalo said he believes tariffs are a necessary means to "level the playing field" for European producers. "It's good if biodiesel is supported everywhere worldwide," he said. "But it should not be supported for exporting at dumping price to Europe. This [tariffs] will put an end to an unacceptable situation."

The National Biodiesel Board continues to support its case that U.S.-produced biodiesel has not harmed the European industry. "For those [European] companies that are faring poorly, it is factors not related to U.S. competition that are the cause," said NBB Vice President of Federal Affairs Manning Feraci. Rather, he said, bad business models, high feedstock costs and detrimental changes in European state policy are more to blame for the European biodiesel industry's problems than U.S. B99.

The Commission determined that from a period beginning April 2007 and ending March 2008, the United States held a 17 percent market share of Europe's biodiesel imports. Imports of U.S. biodiesel to Europe increased from 700 million metric tons in 2005 to more than 1 million metric tons by March 2008. While it is certain that some U.S. producers will continue to export their product to Europe during the temporary tariff timeframe, many will be unable to do so profitably anymore.
 
 
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