NBB Fighting to Protect the Biodiesel Industry from Trade Decisions

National Biodiesel Board CEO Donnell Rehagen discusses the disconcerting circumstances surrounding the U.S. Department of Commerce's initiation of "changed circumstances" reviews of recently imposed tariffs on U.S. imports of Argentine biodiesel.
By Donnell Rehagen | December 26, 2018

It’s been a long battle this year for the biodiesel industry and the members we support. Late in 2018, the U.S. Department of Commerce granted the government of Argentina’s request and initiated “changed circumstances” reviews of U.S. antidumping and countervailing duty orders on Argentine biodiesel companies. NBB’s Fair Trade Coalition urged the commerce department to reject Argentina’s request and opposed initiation of the reviews, which could result in resetting the duty rates calculated only months ago.

Just last year, the U.S. International Trade Commission unanimously determined that U.S. biodiesel producers were injured by biodiesel imports from Argentina, and the commerce department confirmed that the harm directly resulted from massive subsidies provided by the government of Argentina and huge margins of dumping by its biodiesel industry. The commerce department’s subsequent orders established final countervailing duty rates ranging from 71.45 to 72.28 percent and antidumping duty rates ranging from 60.44 to 86.41 percent for Argentine biodiesel. These duties were calculated and applied by the commerce department to level the playing field for our domestic producers.

The NBB Fair Trade Coalition filed its original petitions back in March 2017 seeking relief to address a flood of subsidized and dumped imports from Argentina and Indonesia that resulted in market share losses and depressed prices for domestic producers. Biodiesel imports from Argentina and Indonesia surged by 464 percent from 2014-’16, taking over 18 percent of market share from U.S.

manufacturers. The key issue for us was not only the surging levels of imported biodiesel, but that these artificially low-priced imports prevented our domestic producers from earning adequate returns on their substantial investments. The limited returns also stifled the ability of U.S. producers to make further investments to build and serve a growing market.

Once the commerce department leveled the playing field, domestic biodiesel producers stepped up their efforts, put substantial underutilized production capacity back to work, and boosted homegrown biodiesel production. In these circumstances, it is a complete mystery why the commerce department would open a path to a resumption of unfairly traded imports. This action jeopardizes our industry’s progress and the American jobs our industry supports, and it places added pressure on our nation’s farmers, who are already suffering from low commodity prices and uncertain trade conditions.

With these things in mind, we believe the commerce department has no basis for initiating this unprecedented review and we have told them so. Changed circumstances reviews are extremely rare as the very nature of the duties applied in these circumstances are a recognition of the severe harm a domestic industry has incurred over a substantial period of time. These duties were set to remain in place for a period of five years to allow the domestic industry time to recover from the harm caused. Because these duties have been in place for just a few months, that anticipated recovery period has not been recognized. 

The commerce department’s changed circumstances review process typically takes up to 270 days, meaning a final determination could come as late as August. In the meantime, the duties as established remain in place. The commerce department has indicated it will publish preliminary findings from the review and solicit public comment before issuing a final determination.

President Trump has consistently stated support for the U.S. biofuels industry and strong enforcement of U.S. trade laws. The administration shouldn’t act contrary to the president’s commitments. Soybean growers have seen large global markets closed to them. The U.S. EPA has cut the domestic biodiesel industry market by more than 300 million gallons by handing out RFS exemptions to every refiner that asked. And now, the commerce department is considering undoing what it just did a few months ago.  The department shouldn’t put salt in the wound with actions that further threaten the viability of U.S. producers and farmers in favor of Argentina’s agricultural interests.

Our team, along with the American Soybean Association and National Renderers Association, wrote a letter to President Trump urging him to ensure that the commerce department undertake a rigorous, comprehensive and transparent review before considering any adjustments to the duty rates it established this year.

Together, we believe to do anything less would strike a devastating blow to U.S. biodiesel producers and soybean farmers. We will continue to work collectively to advocate for American biodiesel and soybean producers.

Donnell Rehagen
National Biodiesel Board

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