The National Biodiesel Board testified last week in a public hearing at the U.S. Department of Commerce on significant trade deficits with Indonesia, describing the harm caused by the increasing volumes of unfairly traded biodiesel imports. The hearing was held in response to executive order 13786, which called for an omnibus report on significant trade deficits. 

NBB testified on the growing trade deficit with Indonesia, which is the highest it has ever been—having reached $13.2 billion 2016. This is a 20 percent increase since 2014. NBB argued that this deficit is fueled in significant part by increasing volumes of unfairly traded biodiesel imports from Indonesia. 

“Between 2014 and 2016, the trade imbalance with respect to biodiesel has grown 95 percent,” testified Anne Steckel, vice president of federal affairs at NBB. “Unfair trade practices have caused this significant surge in biodiesel imports and growing trade deficit, such as massive subsidization by the Indonesian government and dumped pricing by Indonesian biodiesel producers and exporters. These practices have injured—and threaten to continue injuring—U.S. biodiesel producers.” 

The Indonesian government employs several tactics that promote exports and violate U.S. trade laws, including levying high export taxes on crude palm oil, preferential financing from the Indonesian Export-Import Bank, and providing subsidies and various tax incentives for biodiesel producers and supporters. By taking advantage of these various subsidies, Indonesian producers have become dominant exporters and taken an increasingly greater share of the U.S. market. In the meanwhile, U.S. producers do not have the same ability to export into Indonesia. 

Forced to compete with Indonesian producers’ dumped and subsidized prices, U.S. biodiesel producers’ financial condition has declined significantly. This has caused U.S. producers to pull back on investments to expand production capacity in what continues to be a growing market.

NBB is working to counter these dynamics by filing an antidumping and countervailing duty petition, making the case that Argentine and Indonesian companies are violating trade laws by flooding the U.S. market with dumped and subsidized biodiesel. The petition was filed with the U.S. Department of Commerce and the U.S. International Trade Commission on behalf of the NBB Fair Trade Coalition, which is made up of the NBB and U.S. biodiesel producers. Steckel and several NBB member companies testified at a staff conference before the ITC in April. On May 5, the ITC made a preliminary decision to proceed with a full investigation into these allegations.

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, biodiesel is a renewable, clean-burning diesel replacement that can be used in existing diesel engines without modification. It is the nation’s first domestically produced, commercially available advanced biofuel. The NBB is the U.S. trade association representing the biodiesel and renewable diesel industries, including producers, feedstock suppliers and fuel distributors.

Download Anne Steckel’s testimony here.