EU takes further action to protect domestic industry

The European Commission initiated antisubsidy proceedings Nov. 10 on biodiesel imports coming from Argentina and Indonesia, following a complaint lodged by the European Biodiesel Board in September. The commission launched its antidumping investigation against Argentine and Indonesian biodiesel in late August.

The argument is that Argentine and Indonesian biodiesel benefit from governmental export policies that apply a higher export tax to the feedstock—soybeans or soybean oil in Argentina and refined or unrefined palm oil in Indonesia—than the export tax applied to the finished biodiesel fuel.

“This approach effectively obliges the input producers to sell on the domestic market, thus creating an excess of supply, depressing prices to a below-market level and artificially reducing the costs of the biodiesel producers,” stated the European Commission. “It is alleged that the above schemes are subsidies since they involve a financial contribution from the governments of Argentina and Indonesia (in the form of the entrustment and/or direction of the input producers to provide goods to the domestic biodiesel industry, or through income or price support) and confer a benefit to the recipients because the goods are provided for less than adequate remuneration.”  

It is no small amount of biodiesel fuel that has poured into Europe from Argentina and Indonesia over the past few years, either. According to the European Biodiesel Board, in 2011, these two countries alone represented more than 90 percent of the international market partners of the European territory, with 2.5 million metric tons (more than 750 million gallons) entering the market. The EBB estimates that this trend would have been very likely to increase in 2012.

To view documentation on this matter from the Official Journal of the European Union, click here.